ONE GROUP, 497, 1999-09-08

ONE GROUP
497, 1999-09-08

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<PAGE> 1

ONE GROUP(R) MUTUAL FUNDS

ONE GROUP(R) BOND FUND

CLASS I SHARES

MARCH 18, 1999

AS AMENDED SEPTEMBER 8, 1999

This prospectus describes one fund and is for use in a 401(k) plan. 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 FUNDS: - 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.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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
One Group(R)Bond Fund.................................... 2
MORE ABOUT THE FUND......................................... 4
HOW TO DO BUSINESS WITH ONE GROUP MUTUAL FUNDS.............. 6
Purchasing Fund Shares................................... 6
Redeeming Fund Shares.................................... 6
Shareholder Information.................................. 7
Voting Rights............................................ 7
Dividend Policies........................................ 7
Tax Treatment of the Fund................................ 7
Tax Treatment of Shareholders............................ 7
Shareholder Inquiries.................................... 7
ORGANIZATION AND MANAGEMENT OF THE FUND..................... 8
The Fund................................................. 8
The Board of Trustees.................................... 8
The Advisor.............................................. 8
The Distributor.......................................... 8
The Administrator and Sub-Administrator.................. 8
The Transfer Agent, Custodian and Sub-Custodian.......... 8
Year 2000................................................ 8
DETAILS ABOUT THE FUND'S INVESTMENT PRACTICES AND POLICIES.. 10
Investment Practices..................................... 10
Investment Risks......................................... 13
Investment Policies...................................... 14
APPENDIX: DESCRIPTION OF RATINGS............................ 15
</TABLE>
<PAGE> 3

A BRIEF PREVIEW OF THE FUND
1

WHAT IS THE GOAL OF THE FUND?
The Bond Fund's investment objective is to seek to maximize
total return by investing primarily in a diversified portfolio
of intermediate and long-term debt securities.

Please read about the Fund before investing.

WHAT IS THE FUND'S INVESTMENT STRATEGY?
The Bond Fund invests in high and medium grade debt securities
of all types with average maturities ranging from one to
twenty years. The Fund may invest in preferred stock. The Fund
also may lend its portfolio securities.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
The Bond Fund invests in fixed income investments that are
subject to market fluctuations as a result of changes in
interest rates. As a result, the value of investments in the
Fund may decrease during periods of rising interest rates and
increase during periods of declining interest rates. In
addition, the Fund invests in mortgage-related securities
which have significantly greater price and yield volatility
than traditional fixed income securities. Fixed income
securities also are subject to the risk that the issuer of the
security will be unable to meet its payment obligation. 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."

WHAT CLASSES OF SHARES ARE AVAILABLE?
The Bond Fund currently offers four classes of Shares: Class
A, Class B, Class C and Class I. Only Class I shares are
offered in this Prospectus. Class I shares are offered to
institutional investors, including affiliates of Bank One
Corporation and any bank, depository institution, insurance
company, pension plan or other organization authorized to act
in fiduciary, advisory, agency, custodial or similar
capacities. Class I shares are not available to Individual
Retirement Accounts ("IRAs"). The section entitled "How To Do
Business With One Group Mutual Funds" will provide more
information.

HOW DO I PURCHASE AND REDEEM SHARES?
Contact your Plan Administrator.

HOW ARE DIVIDENDS PAID?
Generally, dividends are declared on each business day and are
distributed on the first business day of each month. Any
capital gains are distributed at least annually. Distributions
are paid in additional shares of the same class unless 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 "Shareholder Expenses".
<PAGE> 4

One Group(R)

Bond Fund
[LOGO] INVESTMENT OBJECTIVE
The Fund seeks to maximize total
return by investing primarily in a
diversified portfolio of
intermediate and long-term debt
securities.
[LOGO] INVESTMENT STRATEGY
The Fund invests in all types of
debt securities rated as investment
grade, as well as convertible
securities, preferred stock, and
loan participations. The Fund's
average weighted maturity will
normally range between four and
twelve years, although the Fund may
shorten its weighted average if
deemed appropriate for temporary
defensive purposes.
[LOGO] PORTFOLIO SECURITIES
The Fund invests at least 65% of its
total assets in debt securities of
all types with intermediate to long
maturities. As a matter of
fundamental policy, at least 65% of
the Fund's total assets will consist
of bonds. The Fund may purchase
taxable or tax-exempt municipal
securities. For a list of all the
securities in which the Fund may
invest, please read "Investment
Practices."
[LOGO] RISK CONSIDERATIONS
The Fund may invest in debt
securities that are rated in the
lowest investment grade category.
Such investments are considered to
have speculative characteristics.
The value of fixed income securities
will change in response to interest
rate changes and other factors. This
is especially true to the extent the
Fund invests in debt securities in
the lowest investment grade
category. The Fund also invests in
mortgage-related securities which
may have greater price and yield
volatility than traditional fixed
income securities. Before you
invest, please read "More About the
Fund" and "Investment Risks."

[LOGO] FUND MANAGEMENT
The Fund is managed by a team of
portfolio managers, research
analysts and fixed income traders.
The team works together to establish
general duration and sector
strategies for the Fund. Each team
member makes recommendations about
securities in the Fund. The research
analysts and trading personnel
provide individual security and
sector recommendations, while the
portfolio managers select and
allocate individual securities in a
manner designed to meet the
investment objectives of the Fund.

SHAREHOLDER EXPENSES

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS I
<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 EXPENSES (as a
percentage of average daily
net assets)
Investment Advisory Fees (after
fee waiver) (1) .40%
12b-1 Fees (after fee waiver) none
Other Expenses (after fee
waivers) (2) .20%
Total Fund Operating Expenses
(after fee waivers) (3) .60%
</TABLE>

(1) Without the fee waiver, Investment Advisory Fees would be .60% for all
classes of shares.

(2) Without a fee waiver, Other Expenses would be .21%.

(3) Without the voluntary reduction of Investment Advisory and 12b-1 fees
and reimbursement of Other Expenses, Total Operating Expenses would be
.81%.

EXAMPLE An investor would pay the following expenses on a $1,000 investment in
the Fund, assuming: (1) 5% annual return; and (2) redemption at the end of each
time period.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class I $ 6 $ 19 $ 33 $ 75
Class I (without
fee waiver) $ 8 $ 26 $ 45 $100
</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.
<PAGE> 5

One Group(R) Bond Fund Financial Highlights

The Financial Highlights are intended to help you understand the Fund's
financial performance for the past 10 years or since inception, if less than 10
years. The total returns in the table represent the rate a shareholder would
have earned on an investment in the Fund (assuming reinvestment of all dividends
and distributions). This information has been derived from financial statements
audited by Arthur Andersen, LLP, whose report, along with the Fund's financial
statements, is incorporated by reference in the Statement of Additional
Information, which is available upon request.

<TABLE>
<CAPTION>
================================================================================================================================
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
CLASS I 1998 1997 1996 1995 1994 1993 1992 1991(a)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 10.59 $ 10.27 $ 10.45 $ 9.01 $ 10.32 $ 10.25 $ 10.55 $ 10.00
- --------------------------------------------------------------------------------------------------------------------------------
Investment Activities:
Net investment income 0.65 0.66 0.68 0.63 0.61 0.76 0.83 0.51
Net realized and unrealized
gains (losses) from
investments and futures 0.19 0.32 (0.18) 1.45 (1.31) 0.38 (0.17) 0.57
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment
Activities 0.84 0.98 0.50 2.08 (0.70) 1.14 0.66 1.08
- --------------------------------------------------------------------------------------------------------------------------------
Distributions:
Net investment income (0.65) (0.66) (0.68) (0.64) (0.59) (0.76) (0.83) (0.51)
From net realized gain -- -- -- -- (0.02) (0.31) (0.13) (0.02)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.65) (0.66) (0.68) (0.64) (0.61) (1.07) (0.96) (0.53)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.78 $ 10.59 $ 10.27 $ 10.45 $ 9.01 $ 10.32 $ 10.25 $ 10.55
- --------------------------------------------------------------------------------------------------------------------------------
Total Return (Excludes sales
charge) 8.17% 9.97% 5.08% 23.75% (6.99)% 11.39% 6.56% 18.45%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period
(000) $1,277,246 $1,101,894 $757,627 $485,851 $395,116 $455,786 $312,366 $237,673
Ratio of expenses to average
net assets 0.64% 0.61% 0.66% 0.74% 0.74% 0.73% 0.73% 0.75%(b)
Ratio of net investment
income to average net
assets 6.10% 6.41% 6.71% 6.39% 6.36% 7.20% 8.08% 8.44%(b)
Portfolio Turnover 34.69% 17.60% 24.92% 41.91% 75.67% 111.52% 90.45% 8.19%
</TABLE>

(a) For the period June 1, 1991 (commencement of operations) to December 31,
1991. (b) Annualized.
<PAGE> 6
4 MORE ABOUT THE FUND

WHEN THE PROSPECTUS REFERS TO "BONDS," WHAT TYPES OF INVESTMENTS ARE INCLUDED?

"Bonds" include debt instruments with maturities of 90 days or more issued by
the U.S. Treasury, U.S. government agencies, corporations, municipalities,
securities issued or guaranteed by foreign governments, their agencies or
instrumentalities, securities issued by domestic and supranational banks,
mortgage-related securities, asset-backed securities, stripped government
securities and zero coupon obligations.

Portfolio Quality
- ----------------------------------------------------

The Bond Fund only purchases securities that meet the following criteria:

DEBT SECURITIES

- - The Fund may invest in debt securities rated in any of the four investment
grade rating categories.

PREFERRED STOCK

- - The Fund may only invest in preferred stock rated in any of the four highest
rating categories.

MUNICIPAL SECURITIES

- - The Fund may only invest in municipal bonds rated in any of the four highest
rating categories.

- - The Fund may only invest in other municipal securities, such as tax-exempt
commercial paper, notes, and variable rate demand obligations which are rated
in the highest or second highest rating categories.

COMMERCIAL PAPER

- - The Fund may invest in commercial paper rated in the highest or second highest
rating category.

If the securities are unrated, Banc One Investment Advisors must determine that
they are of comparable quality to rated securities. 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 Bond Fund may invest up to 15% 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 One Group Board of Trustees in determining whether an
investment is illiquid.

Special Risk
Considerations
- ----------------------------------------------------

FIXED INCOME SECURITIES: Investments in fixed income securities (for example,
bonds) will increase or decrease in value based on changes in interest rates. If
rates increase, the value of the Bond 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 the Fund will increase and 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 also are 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 Bond Fund may invest in securities that are considered to be
derivatives. "Derivatives" are securities or contracts that derive their value
from the performance of underlying assets or securities. These include:

- - options, futures contracts, and options on futures contracts

- - mortgage-backed securities, including collateralized mortgage obligations and
Real Estate Mortgage Investment Conduits (CMOs and REMICs) and stripped
mortgage-backed (Interest Only (IOs) and Principal Only (POs))

- - asset-backed securities

- - swap, cap and floor transactions

- - new financial products

- - structured instruments

- - inverse floating rate instruments

These securities may be more volatile than other investments. Derivatives
present, to varying degrees, market, credit, leverage, liquidity, and management
risks. For a more detailed discussion of these risks, please read "Investment
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.

LOWER RATED SECURITIES: The Bond Fund may invest in debt securities rated in the
lowest investment grade category. Securities in this rating category are
considered to have speculative characteristics. Changes in economic conditions
or other circumstances may have a greater effect on the ability of issuers of
these securities to make

<PAGE> 7

principal and interest payments than they do on issuers of higher grade
securities.

FOREIGN SECURITIES: Investments in foreign securities involve risks different
from investments in U.S. securities. This includes the risk that fluctuations in
exchange rates between the U.S. dollar and foreign currencies may negatively
affect an investment. For more details, see "Investment Practices" and
"Investment Risks." Because of these risk factors, the share price of a Fund
investing in foreign securities is expected to be volatile, and you should be
able to sustain sudden, and sometimes substantial, fluctuations in the value of
your investment. On January 1, 1999, the European Economic and Monetary Union
introduced the "euro." The euro will serve as a common currency for
participating European nations. All stocks issued by corporations located in
those nations will be denominated in euros. In addition, outstanding shares will
be redenominated in euros. All government bonds issued by participating nations
will be in euros, and outstanding government bonds will be redenominated in
euros. The introduction of the euro presents some uncertainties, such as the
adequacy of newly created accounting, clearing, settlement and payment systems
for the new currency. These uncertainties surrounding the introduction of the
euro could adversely affect the value of the securities held by a Fund.

<PAGE> 8
how to do business with One Group Mutual Funds

Purchasing Fund Shares
- ----------------------------------------------------

WHERE CAN I BUY SHARES?

For retirement plans, Fund shares generally are purchased through payroll
deduction or qualified rollovers. Please contact your Plan Administrator for
more information.

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 Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving, and Christmas.

- - It is the responsibility of your Plan Administrator to send your purchase or
redemption order to the Fund. Please contact your Plan Administrator for
information regarding cut-off times 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 a Fund and/or its shareholders to
accept the order.

- - Shares are electronically recorded. Therefore, certificates will not be
issued.

WHAT KIND OF SHARES CAN I BUY?

One Group offers the following classes of shares:

- - Class I shares are available to institutional investors and any organization
authorized to act in a fiduciary, advisory, custodial or agency capacity. We
will refer to these entities as "Intermediaries."

- - Class A, Class B and Class C shares are available to the general public. Class
A, Class B and Class C shares are not offered in this Prospectus.

HOW MUCH DO CLASS I SHARES COST?
- - Class I shares are sold at net asset value ("NAV").

- - Each class of shares in the Fund has a different NAV. This is primarily
because each class has different distribution expenses.

- - NAV per share is calculated by dividing the total market value of the Fund's
investments and other assets allocable to a class (minus class expenses) by
the number of outstanding shares in that class.

- - The Fund's NAV changes every day. NAV is calculated each business day
following the close of the NYSE at 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?

Please see your Plan Administrator for information on participating in your
company's plan.

Redeeming Fund Shares
- ----------------------------------------------------

HOW DO I REDEEM SHARES?

Please contact your Plan Administrator for redemption information.

WHAT WILL MY SHARES BE WORTH?

- - You will receive the NAV in effect on the day your redemption request is
received by the Fund.

ADDITIONAL INFORMATION REGARDING REDEMPTIONS

- - All redemptions will be for cash.

- - It is the responsibility of your Plan Administrator to send your redemption
request to the Fund.

- - One Group may suspend your ability to redeem when:

1. Trading on the New York Stock Exchange ("NYSE") is restricted.

2. The NYSE is closed (other then 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 should talk to your tax advisor before making a redemption.

6
<PAGE> 9
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.

The Fund, and each Class of shares within the Fund, vote separately on matters
relating solely to the Fund or class, or which affect that Fund or Class
differently. However, all shareholders will have equal voting rights on matters
that affect all shareholders equally.

Bank One Corporation (One First National Plaza, Chicago Illinois, 60670),
through its affiliates, may be deemed for purposes of the Investment Company Act
of 1940 to control the Fund. This is because as of December 1, 1998, Bank One
Corporation or its affiliates possessed the power to vote substantially all of
the Class I shares of the Fund.

On that same date, no shareholders beneficially owned more than 25% of Class A,
Class B or Class C shares of the Fund.

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.

Dividends payable on Class I shares will be more than those payable on other
classes of shares. This is because Class A, Class B and Class C shares have
higher distribution expenses.

The Fund pays dividends and distributions on a per-share basis. This means that
the value of your shares will be reduced by the amount of the payment.

DIVIDEND REINVESTMENT

You automatically will receive all income dividends and capital gain
distributions in additional shares of the same Fund and class. The value of the
shares distributed 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.
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 for treatment as a regulated
investment company, as it has in the past, it will pay no federal income tax on
the earnings it distributes to shareholders.

Tax Treatment of Shareholders
- ----------------------------------------------------

TAXATION OF DISTRIBUTIONS

The Fund will distribute substantially all of its net investment income
(including, for this purpose, the excess of net short-term capital gains over
net long-term capital losses) and net capital gains (i.e., the excess of net
long-term capital gains over net short-term capital losses) on at least an
annual basis.

TAXATION OF RETIREMENT PLANS

Distributions by the Fund to qualified retirement plans generally will not be
taxable. However, if shares are held by a plan that ceases to qualify for
tax-exempt treatment or by an individual who has received the shares as a
distribution from a retirement plan, the distributions will be taxable to the
plan or individual. If you are considering purchasing shares with qualified
retirement plan assets, you should consult your tax advisor for a more complete
explanation of the Federal, state, local and (if applicable) foreign tax
consequences of making such an investment.

TAXATION OF ZERO-COUPON BONDS

The Fund's investments in certain debt obligations may cause the Fund to
recognize taxable income in excess of the cash generated by such obligation.
Thus, the Fund could be required at times to liquidate other investments in
order to satisfy its distribution requirements.

Shareholder Inquiries
- ----------------------------------------------------

If you have any questions or need additional information, please contact your
Plan Administrator.
REPORTING

In March and September your Plan Administrator will receive a financial
report from One Group. In addition, One Group will periodically send your
Plan Administrator proxy statements and other reports.

7
<PAGE> 10

organization and management of the fund
FUND NAME

THE FUND

The Bond Fund is one in a series of One Group Mutual Funds, an open-end
management investment company. One Group currently offers 49 separate Funds. The
Fund described in this prospectus is diversified. The other Funds are described
in separate prospectuses. 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
Bond Fund and continuously reviews, supervises and administers the Fund's
investment programs. 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.

For the fiscal year ended June 30, 1998, the Fund paid investment advisory fees
at the following rate:

Annual Rate As Percentage
of Average Daily Net Assets
<S> <C> <C> <C>
One Group(R) Bond Fund .40%*
</TABLE>

* The predecessors to these Funds had December 31 year ends. The advisory fees
shown are as of December 31, 1998.

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 reporting and
compliance. For these services, The One Group Services Company receives a fee
based on the total assets of One Group. For the first $1.5 billion in One Group
assets, The One Group Services Company receives an annual fee of .20% of the
Fund's average daily net assets. The annual rate declines to .18% on assets up
to $2 billion, and to .16% when assets exceed $2 billion. The fee is calculated
daily and paid monthly. Some Funds are not included in the calculations.

Banc One Investment Advisors, the Sub-Administrator, provides office space,
equipment and facilities, as well as legal and regulatory support.

THE TRANSFER AGENT, CUSTODIAN AND 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 paid by the Fund
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

8
<PAGE> 11

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" was
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.
<PAGE> 12

10 DETAILS ABOUT THE FUND'S INVESTMENT PRACTICES AND POLICIES

INVESTMENT PRACTICES

The Bond 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.

TREASURY RECEIPTS: TRS, TIGRs, and CATS. Market

U.S. GOVERNMENT AGENCY SECURITIES: Securities issued by agencies and Market
instrumentalities of the U.S. Government. These include Ginnie Mae, Fannie Mae, and Credit
Freddie Mac.

CERTIFICATES OF DEPOSIT: Negotiable instruments with a stated maturity. Market
Credit
Liquidity

TIME DEPOSITS: Non-negotiable receipts issued by a bank in exchange for the deposit Market
of funds. Liquidity
Credit

REPURCHASE AGREEMENTS: The purchase of a security and the simultaneous commitment Credit
to return the security to the seller at an agreed upon price on an agreed upon Market
date. This is treated as a loan. Liquidity

REVERSE REPURCHASE AGREEMENT: The sale of a security and the simultaneous Market
commitment to buy the security back at an agreed upon price on an agreed upon date. Leverage
This is treated as a borrowing by a Fund.

SECURITIES LENDING: The lending of up to 33 1/3% of the Fund's total assets. In Credit
return the Fund will receive cash, other securities, and/or letters of credit as Market
collateral. Leverage

WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS: Purchase or contract to purchase Market
securities at a fixed price for delivery at a future date. Leverage
Liquidity
Credit

INVESTMENT COMPANY SECURITIES: Shares of other mutual funds, including One Group Market
money market funds and shares of other investment companies for which Banc One
Investment Advisors serves as investment advisor or administrator. The Treasury &
Agency Fund and the Government Bond Fund will only purchase shares of investment
companies which invest exclusively in U.S. Treasury and other U.S agency
obligations. Banc One Investment Advisors will waive certain fees when investing in
funds for which it serves as investment advisor.

CONVERTIBLE SECURITIES: Bonds or preferred stock that convert to common stock. Market
Credit

CALL AND PUT OPTIONS: A call option gives the buyer the right to buy, and obligates Management
the seller of the option to sell, a security at a specified price. A put option Liquidity
gives the buyer the right to sell, and obligates the seller of the option to buy, a Credit
security at a specified price. The Fund will sell covered call and secured put Market
options. Leverage

FUTURES AND RELATED OPTIONS: A contract providing for the future sale and purchase Management
of a specified amount of a specified security, class of securities, or an index at Credit
a specified time in the future and at a specified price. Liquidity
Leverage
Market

BANKERS' ACCEPTANCES: Bills of exchange or time drafts drawn on and accepted by a Credit
commercial bank. Maturities are generally six months or less. Liquidity
Market

COMMERCIAL PAPER: Secured and unsecured short-term promissory notes issued by Credit
corporations and other entities. Maturities generally vary from a few days to nine Liquidity
months. Market
</TABLE>
<PAGE> 13

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
INSTRUMENT RISK TYPE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN SECURITIES: Debt issued by foreign governments, foreign corporations, Market
domestic subsidiaries of foreign corporations, and foreign banks, as well as Political
commercial paper of foreign issuers and obligations of foreign banks and overseas Liquidity
branches of U.S. foreign banks and of foreign issuers and supranational entities. Investment
The High Yield Bond Fund also may purchase equity securities issued by the entities
listed above.

RESTRICTED SECURITIES: Securities not registered under the Securities Act of 1933, Liquidity
such as privately placed commercial paper and Rule 144A securities Market
Credit

VARIABLE AND FLOATING RATE INSTRUMENTS: Obligations with interest rates which are Market
reset daily, weekly, quarterly or some other period and which may be payable to the Credit
Fund on demand. The Treasury & Agency Fund will invest in these securities only if Liquidity
they are issued by the U.S. Treasury or another U.S. Government Agency.

PREFERRED STOCK: A class of stock that generally pays a dividend at a specified Market
rate and has preference over common stock in the payment of dividends and in
liquidation.

MORTGAGE-BACKED SECURITIES: Debt obligations secured by real estate loans and pools Pre-payment
of loans. These include collateralized mortgage obligations ("CMOs"), Real Estate Market
Mortgage Investment Conduits ("REMICs"). Credit
Regulatory

CORPORATE DEBT SECURITIES: Corporate bonds and non-convertible debt securities. Market
Credit

DEMAND FEATURES: Securities that are subject to puts and standby commitments to Market
purchase the securities at a fixed price (usually with accrued interest) within a Liquidity
fixed period of time following demand by a Fund. Management

ASSET-BACKED SECURITIES: Securities secured by company receivables, home equity Pre-payment
loans, truck and auto loans, leases, credit card receivables and other securities Market
backed by other types of receivables or other assets. Credit
Regulatory

MORTGAGE DOLLAR ROLLS: A transaction in which a Fund sells securities for delivery Pre-payment
in a current month and simultaneously contracts with the same party to repurchase Market
similar but not identical securities on a specified future date. Regulatory

ADJUSTABLE RATE MORTGAGE LOANS ("ARMS"): Loans in a mortgage pool which provide for Pre-payment
a fixed initial mortgage interest rate for a specified period of time, after which Market
the rate may be subject to periodic adjustments. The Treasury & Agency Fund will Credit
only buy ARMs issued by U.S. government entities. Regulatory

SWAPS, CAPS AND FLOORS: A Fund may enter into these transactions to manage its Management
exposure to changing interest rates and other factors. Swaps involve an exchange of Credit
obligations by two parties. Caps and floors entitle a purchaser to a principal Liquidity
amount from the seller of the cap or floor to the extent that a specified index Market
exceeds or falls below a predetermined interest rate or amount.

NEW FINANCIAL PRODUCTS: New options and futures contracts and other financial Management
products continue to be developed and the Fund may invest in such options, Credit
contracts and products. Market
Liquidity

STRUCTURED INSTRUMENTS: Debt securities issued by agencies and instrumentalities of Market
the U.S. government, banks, municipalities, corporations and other businesses whose Liquidity
interest and/or principal payments are indexed to foreign interest rates, or one or Management
more other referenced indices. Credit
Foreign Investment

MUNICIPAL SECURITIES: Securities issued by a state or political subdivision to Credit
obtain funds for various public purposes. Municipal securities include private Political
activity bonds and industrial development bonds, as well as General Obligation Tax
Notes, Anticipation Notes, Bond Tax Anticipation Notes, Revenue Anticipation Notes, Market
Project Notes, other short-term tax-exempt obligations, municipal leases, and Regulatory
obligations of municipal housing authorities and single family revenue bonds.

ZERO COUPON DEBT SECURITIES: Bonds and other debt that pay no interest, but are Credit
issued at a discount from their value at maturity. When held to maturity, their Market
entire return equals the difference between their issue price and their maturity Zero Coupon
value.

ZERO-FIXED-COUPON DEBT SECURITIES: Zero coupon debt securities which convert on a Credit
specified date to interest bearing debt securities. Market
Zero Coupon

STRIPPED MORTGAGE-BACKED SECURITIES: Derivative multi-class mortgage securities Pre-payment
usually structured with two classes of shares that receive different proportions of Market
the interest and principal from a pool of mortgage-backed obligations. These Credit
include only invests in Stripped Mortgage-Backed Securities issued or guaranteed by Regulatory
the U.S. government, its agencies or instrumentalities.
</TABLE>
<PAGE> 14

LOAN PARTICIPATIONS AND ASSIGNMENTS: Participations in, or assignments of all or a Credit
portion of loans to corporations or to governments, including governments of the Political
less developed countries ("LDC's"). Liquidity
Foreign Investment
Market

FIXED RATE MORTGAGE LOANS: Investments in fixed rate mortgage loans or mortgage Credit
pools which bear simple interest at fixed annual rates and have short to long term Pre-payment
final maturities. Regulatory
Market

SHORT-TERM FUNDING AGREEMENTS: Investments in short-term funding agreements issued Credit
by banks and highly rated U.S insurance companies such as Guaranteed Investment Liquidity
Contracts ("GIC's") and Bank Investment Contracts ("BIC's"). Market
</TABLE>
<PAGE> 15

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
risk 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 and liquidity 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 would normally prevail 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 is also 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. This is particularly relevant to investments in
foreign securities.

- - 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. The risk associated with higher transaction costs,
delayed settlements, currency controls and adverse economic developments. This
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. When mortgage and other obligations are pre-paid, a Fund may have
to reinvest in securities with a lower yield. Further, with early prepayment,
a Fund may fail to recover any premium paid, resulting in an unexpected
capital loss.

- - 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 lender has when a borrower defaults on 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.

- - ZERO COUPON RISK. The risk associated with changes in interest rates. The
market prices of securities structured as zero coupon or pay-in-kind
securities are generally affected to a greater extent by interest rate
changes. These securities tend to be more volatile than securities which pay
interest periodically. This risk is similar to Market Risk, which is described
above.

<PAGE> 16

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 may not:

1. Purchase the securities of an issuer 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, securities of registered investment companies,
and repurchase agreements involving these securities. This restriction
applies with respect to 75% of a Fund's total assets.

2. Concentrate their investment in the securities of one or more issuers
conducting their principal business in a particular industry or group of
industries. This does not include obligations issued or guaranteed by the
U.S. Government or its agencies and instrumentalities and repurchase
agreements involving such securities.

3. Make loans, except that a Fund may:
(i) purchase or hold debt instruments in accordance with its investment
objective and policies;
(ii) enter into repurchase agreements; and
(iii) engage in securities lending.

Additional investment policies are set forth in the Statement of Additional
Information.

TEMPORARY DEFENSIVE POSITION

For temporary defensive purposes as determined by Banc One Investment Advisors,
the Fund may invest up to 100% of its assets in money market instruments, and
may hold a portion of its assets in cash for liquidity purposes. While the Fund
is engaged in a temporary defensive position, it will not be pursuing its
investment objective. Therefore, the Fund will pursue a temporary defensive
position only when market conditions warrant.

PORTFOLIO TURNOVER

Portfolio turnover may vary greatly from year to year, as well as within a
particular year. Higher portfolio turnover rates will likely result in higher
transaction costs to the Fund. The portfolio turnover rate for the Fund is for
the fiscal year ended December 31, 1998.

<PAGE> 17

APPENDIX 15

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.

D-2 Good certainty of timely payment. Liquidity facts and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good. Risk
factors are small.

D-3 Satisfactory liquidity and other protection factors qualify issues as
to investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.

D-4 Speculative investment characteristics. Liquidity is not sufficient to
insure against disruption in debt service. Operating factors and market
access may be subject to a high degree of variation.

D-5 Issuer failed to meet scheduled principal and/interest payments.

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.

A-3 Exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on
the obligation.

B Regarded as having significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitment on the
obligation; however, it faces major ongoing uncertainties which could
lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C Currently vulnerable to nonpayment and is dependent upon favorable
business, financial, and economic conditions for the obligor to meet
its financial commitment on the obligation.

D In payment default. The D rating category is used when payments on an
obligation are not made on the date due even if the applicable grace
period has not expired, unless Standard & Poor's believes that such
payments will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.

FITCH'S IBCA INC. ("FITCH")

F1 Highest capacity for timely repayment. Those issues rated F1+ possess a
particularly strong credit feature.

F2 Satisfactory capacity for timely repayment although such capacity may
be susceptible to adverse changes in business, economic or financial
conditions.

F3 Adequate capacity for timely repayment, but more susceptible to adverse
changes in business, economic or financial conditions than for
obligations in higher categories.

<PAGE> 18

B Capacity for timely repayment is susceptible to adverse changes in
business, economic or financial conditions.

C High risk of default or which are currently in default.

MOODY'S INVESTORS SERVICE ("MOODY'S")

PRIME-1 Superior ability for repayment.

PRIME-2 Strong ability for repayment.

PRIME-3 Acceptable ability for repayment. The effect of industry
characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the
level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained.

NOT PRIME Does not fall within any of the Prime rating categories.

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.

D These banks possess adequate financial strength, but may be limited by
one or more of the following factors: a vulnerable or developing
business franchise; weak financial fundamentals; or an unstable
operating environment.

E These banks possess very weak intrinsic financial strength, require
periodic outside support or suggest an eventual need for outside
assistance. Such institutions may be limited by one or more of the
following factors: a business franchise of questionable value;
financial fundamentals that are seriously deficient in one or more
respects; or a highly unstable operating environment.

DESCRIPTION OF TAXABLE BOND RATINGS

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.

BBB Exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB Less vulnerable to nonpayment than other speculative issues. However,
such issues face major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B More vulnerable to nonpayment than obligations rated BB, but the
obligor currently has the capacity to meet its financial commitment on
the obligation. Adverse business, financial, or economic conditions
will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

CC Currently vulnerable to nonpayment, and dependent upon favorable
business, financial, and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the
obligation.

CC Currently highly vulnerable to nonpayment.

<PAGE> 19

C 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 In payment default. Used when payments on an obligation are not made on
the date due even if the applicable grace period has not expired,
unless Standard & Poor's believes that such payments will be made
during such grace period. Also used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation
are jeopardized.

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.

Aa High quality by all standards. Margins of protection may not be as
large as in Aaa securities, 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.

FITCH

Investment Grade

AAA Highest rating category. The obligor's capacity for timely repayment of
principal and interest is extremely strong.

AA The obligor's capacity for timely repayment is very strong.

A Bonds and preferred stock considered to be investment grade and of high
credit quality. The obligor's ability for timely repayment is strong.
However, adverse changes in business, economic, or financial conditions
are more likely to affect the capacity for timely repayment than
obligations in higher rated categories.

BBB The obligor's capacity for timely repayment of principal and interest is
adequate. However, adverse changes in business, economic or financial
conditions and circumstances, are more likely to affect the capacity for
timely repayment than for obligations in higher rated categories.

Non-Investment Grade

BB Obligations for which capacity for timely repayment of principal and
interest is uncertain. These obligations are speculative to some degree
and capacity for repayment remains susceptible over time to adverse
changes in business, financial or economic conditions.

B The Obligor's capacity for timely repayment of principal and interest
is uncertain. Timely repayment of principal and interest is not
sufficiently protected against adverse changes in business, economic or
financial conditions and these obligations are far more speculative
than those in higher rated categories.

CCC Obligations for which there is a current perceived possibility of
default. Timely repayment of principal and interest is dependent on
favorable business, economic, or financial conditions and these
obligations are far more speculative than those in higher rated
categories.

CC Obligations which are highly speculative or which have a high risk of
default.

C Obligations which are currently in default.

<PAGE> 20

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.

Baa Insurance companies rated in this category offer adequate financial
security. However, certain protective elements may be lacking or may be
characteristically unreliable over any great length of time.

Ba Insurance companies rated in this category offer questionable financial
security. Often the ability of these companies to meet policyholder
obligations may be very moderate and thereby not well safeguarded in
the future.

B Insurance companies rated in this company offer poor financial
security. Assurance of punctual payment of policyholder obligations
over any long period of time is small.

Caa Insurance companies rated in this category offer very poor financial
security. They may be in default on their policyholder obligations or
there may be present elements of danger with respect to punctual
payment of policyholder obligations and claims.

Ca Insurance companies rated in this category offer extremely poor
financial security. Such companies are often in default on their
policyholder obligations or have other marked shortcomings.

C Insurance companies rated in this category are the lowest rated class
of insurance company and can be regarded as having extremely poor
prospects of ever offering financial security.

S&P

An insurer rated "BBB" or higher is regarded as having financial security
characteristics that outweigh any vulnerabilities, and is highly likely to have
the ability to meet financial commitments.

AAA Extremely strong financial security characteristics. "AAA" is the
highest Insurer Financial Strength Rating assigned by Standard & Poor's.

AA Very strong financial security characteristics, differing only slightly
from those rated higher.

A Strong financial security characteristics, but is somewhat more likely
to be affected by adverse business conditions than are insurers with
higher ratings.

BBB Good financial security characteristics, but is more likely to be
affected by adverse business conditions than are higher rated insurers.

An insurer rated "BB" or lower is regarded as having vulnerable characteristics
that may outweigh its strength. "BB" indicates the least degree of vulnerability
within the range; "CC" the highest.

BB Marginal financial security characteristics. Positive attributes exist,
but adverse business conditions could lead to insufficient ability to
meet financial commitments.

B Weak financial security characteristics. Adverse business conditions
will likely impair its ability to meet financial commitments.

CCC Very weak financial security characteristics, and is dependent on
favorable business conditions to meet financial commitments.

CC Extremely weak financial security characteristics and is likely not to
meet some of its financial commitments.

R An insurer rated "R" has experienced a Regulatory Action regarding
solvency. The rating does not apply to insurers subject only to
nonfinancial actions such as market conduct violations.

NR Not Rated, which implies no opinion about the insurer's financial
security.

Plus (+) or minus (-) Following ratings from "AA" to "CCC" show relative
standing within the major rating categories.

DESCRIPTION OF MUNICIPAL NOTE RATINGS

MOODY'S

MIG1 & Short-term municipal securities rated MIG1 or VMIG1 are of the best
VMIG1 quality. They have strong protection from established cash flows,
superior liquidity support or demonstrated broad-based access to the
market for refinancing.

MIG2 & These short-term municipal securities rated MIG2 & VMIG2 are of high
VMIG2 quality. Margins of protection are ample although not so large as in
the preceding group.

<PAGE> 21

MIG3 & Favorable quality. All security elements are accounted for, but the
VMIG3 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.

MIG4 & This denotes adequate quality protection commonly regarded as
VMIG4 required of an investment security is present and although not
distinctly or predominantly speculative, there is a specific risk.

SG This denotes speculative quality.

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.

DESCRIPTION OF PREFERRED STOCK RATINGS

MOODY'S

aaa Top-quality preferred stock. This rating indicates good asset
protection and the least risk of dividend impairment within the
universe of preferred stocks.

aa High-grade preferred stock. This rating indicates that there is a
reasonable assurance the earnings and asset protection will remain
relatively well maintained in the foreseeable future.

a Upper-medium grade preferred stock. While risks are judged to be
somewhat greater than in the "aaa" and "aa" classification, earnings
and asset protection are, nevertheless, expected to be maintained at
adequate levels.

baa Medium-grade preferred stock, neither highly protected nor poorly
secured. Earnings and asset protection appear adequate at present but
may be questionable over any great length of time.

ba Considered to have speculative elements and its future cannot be
considered well assured. Earnings and asset protection may be very
moderate and not well safeguarded during adverse periods. Uncertainty
of position characterizes preferred stocks in this class.

b Lacks the characteristics of a desirable investment. Assurance of
dividend payments and maintenance of other terms of the issue over any
long period of time may be small.

caa Likely to be in arrears on dividend payments. This rating designation
does not purport to indicate the future status of payments.

ca Speculative in a high degree and is likely to be in arrears on
dividends with little likelihood of eventual payments.

c Lowest rated class of preferred or preference stock. Issues so rated
can thus be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each rating
classification; the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.

S&P

S&P's preferred stock rating is an assessment of the capacity and willingness of
an issuer to pay preferred stock dividends and any applicable sinking fund
obligations.

AAA Highest rating. This rating indicates an extremely strong capacity to
pay the preferred stock obligations.

AA High-quality, fixed income security. The capacity to pay preferred stock
obligations is very strong, although not as overwhelming as for issues
rated "AAA."

A Backed by a sound capacity to pay the preferred stock obligations,
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.

BBB Backed by an adequate capacity to pay the preferred stock obligations.
Whereas the issuer normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to make payments for a preferred stock in
this category than for issues in the "A" category.

BB, B, Regarded, on balance, as predominantly speculative with respect
CCC to the issuer's capacity to pay preferred stock obligations.
BB indicates the lowest degree of speculation and CCC the highest.
While such issues will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.

CC In arrears on dividends or sinking fund payments, but that is currently
paying.

C Nonpaying issue.

19
<PAGE> 22

D Nonpaying issue with the issuer in default on debt instruments.

NR No rating has been requested, insufficient information on which to base
a rating, or Standard & Poor's does not rate a particular type of
obligation as a matter of policy.

Plus (+) or minus (-)

To provide more detailed indications of preferred stock quality, ratings from AA
to CCC may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.

SHORT-TERM DEBT RATINGS

Thompson Bank Watch, Inc. ("TBW") ratings apply only to the unsecured commercial
paper and other senior short-term and deposit obligations of entities to which
the ratings have been assigned. 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.

DESCRIPTION OF MUNICIPAL BOND RATINGS
(Including Foreign, Mortgage and Asset-Backed Securities)

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 obligation 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.

Non-Investment 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 obligations.

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

<PAGE> 23

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.

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. Ca is the lowest rating.

<PAGE> 24

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 8528
Boston, MA 02266-8528

LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20003

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Broad Street
Columbus, OH 43215

THE STATEMENT OF ADDITIONAL INFORMATION CONTAINS MORE DETAILED INFORMATION ABOUT
THE FUND. 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.gov) THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION, MATERIALS
INCORPORATED BY REFERENCE AND OTHER INFORMATION REGARDING ONE GROUP(R).

TOG-F-228 9/99