CORNERCAP GROUP OF FUNDS /VA/, 485BPOS, 1998-07-28

CORNERCAP GROUP OF FUNDS /VA/
485BPOS, 1998-07-28

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Filed with the SEC on July 27, 1998
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File Numbers: 33-3149 and 811-4581
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Securities and Exchange Commission
Washington, D.C. 20549

Form N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Post-Effective Amendment No.:17 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No.:19 X
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(Check appropriate box or boxes)

THE CORNERCAP GROUP OF FUNDS
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(Exact Name of Registration as Specified in Charter)

The Peachtree, Suite 1700, 1355 Peachtree St, NE, Atlanta, GA 30309
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(Address of Principal Executive Offices)

(404)870-0700
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(Registrant's Telephone Number, including Area Code)
The Peachtree, Suite 1700, 1355 Peachtree St., NE, Atlanta, GA 30309
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Thomas E. Quinn

(Name and Address of Agent of Service)
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Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the registration statement.

It is proposed that this filing will become effective(check appropriate line).

immediately upon filing pursuant to paragraph (b)
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X on JULY 29, 1998 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)
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on pursuant to paragraph (a) of Rule 485.
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of rule 485
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Registrant hereby registers an indefinite number of securities
under the Securities Act of 1933 pursuant to rule 24f-2 under the
Investment Company Act of 1940.

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Please send copies of communications to:

Reinaldo Pascual, Esq.
Kilpatrick Stockton LLP
1100 Peachtree Street, Suite 2800
Atlanta, Georgia 30309-4530

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<PAGE>

THE CORNERCAP GROUP OF FUNDS
CROSS REFERENCE SHEET
FORM N-1A

ITEM SECTION IN PROSPECTUS

1................ Cover Page
2................ Summary of Fund Expenses
3................ Financial Highlights
4............... Investment Objectives and Policies: Balanced
Fund, Investment Objectives and Policies:
Growth Fund, Principal Investment
Restrictions, Management, The Administrator
and General Information
5................ Management
5A............... Financial Highlights
6................ Cover Page, Dividends and Tax Status, and
General Information
7................ Net Asset Value, The Distributor, How to
Purchase Shares Telephone Purchases, Exchanges
and Redemptions For Securities Firms
8................ How to Redeem Shares and Telephone Purchases,
Exchanges and Redemptions For Securities Firms
9................ None

ITEM SECTION IN STATEMENT OF ADDITIONAL INFORMATION

10............... Cover Page
11............... Table of Contents
12............... General
13............... Investment Objectives and Policies, Investment
Restrictions, and Management
14............... Management
15............... Management
16............... Advisory and Administrator Arrangements
17............... Portfolio Transactions and Brokerage
18............... General
19............... Net Asset Value
20............... Tax Status
21............... The Distributor
22............... Performance Information
23............... Financial Statements
<PAGE>
[LOGO]
CORNERCAP
GROUP OF FUNDS

A "Series" Investment Company

CORNERCAP BALANCED FUND CORNERCAP GROWTH FUND

Shareholder Services Questions Investment Objectives Questions

Toll-Free Voice: (888) 81-FUNDS Toll-Free Voice: (800) 728-0670
(888) 813-8637
Local Voice: (404) 892-9313 Local Voice: (404) 870-0700
Telecopier: (404) 892-9353 Telecopier: (404) 870-0770

The CornerCap Group of Funds ("CornerCap") is an open-end,
diversified management investment company currently consisting of
two separate series representing separate portfolios of
investments (the "Funds").

The investment objective of the CornerCap Balanced Fund (the
"Balanced Fund") is to obtain long-term capital appreciation and
current income. The Fund invests in a combination of equity and
fixed-income securities.

The investment objective of the CornerCap Growth Fund (the "Growth
Fund") is to obtain long term capital appreciation. Income from
dividends or interest on portfolio securities is a secondary
objective.

There is no assurance that either Fund will achieve its objective.

This Prospectus sets forth concisely the information about the
Funds that you should know before investing in the Funds. You
should read it and keep it for future reference. A Statement of
Additional Information ("SAI") dated July 29, 1998, containing
additional information about the Funds has been filed with the
Securities and Exchange Commission ("SEC") and is incorporated by
reference in this Prospectus in its entirety. You may obtain a
copy of the SAI without charge by calling (800) 728-0670 or
writing the Fund at the following address: CornerCap Investment
Counsel, The Peachtree, Suite 1700, 1355 Peachtree Street NE,
Atlanta GA, 30309.

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.

The date of this Prospectus is July 29, 1998.
<PAGE>
PROSPECTUS SUMMARY
FUND OBJECTIVES

THE BALANCED FUND'S INVESTMENT OBJECTIVE IS TO OBTAIN LONG-TERM
CAPITAL APPRECIATION AND CURRENT INCOME. THE FUND WILL ATTEMPT
TO ACHIEVE ITS OBJECTIVE BY INVESTING IN EQUITY AND FIXED-INCOME
SECURITIES OF DOMESTIC AND FOREIGN ISSUERS. UNDER NORMAL
CIRCUMSTANCES, THE FUND WILL INVEST 50-70% OF ITS ASSETS IN
EQUITY SECURITIES AND AT LEAST 30% IN FIXED-INCOME SECURITIES
INCLUDING CASH AND CASH EQUIVALENTS. THERE CAN BE NO ASSURANCE
THAT THE FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE (SEE PAGE 7).

THE GROWTH FUND'S INVESTMENT OBJECTIVE IS TO OBTAIN LONG-TERM
CAPITAL APPRECIATION. THE FUND WILL ATTEMPT TO ACHIEVE ITS
OBJECTIVE BY INVESTING IN EQUITY SECURITIES OF DOMESTIC AND
FOREIGN ISSUERS. INCOME FROM DIVIDENDS OR INTEREST ON PORTFOLIO
SECURITIES IS A SECONDARY OBJECTIVE. THERE CAN BE NO ASSURANCE
THAT THE FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE (SEE PAGE 9).

THE FUNDS. The CornerCap Group of Funds (the "Funds") is an
open-end, diversified management investment company currently
consisting of two separate series representing separate
portfolios of investments, the Balanced Fund (see page 7) and
the Growth Fund (see page 9). The shares of the Balanced Fund
and the Growth Fund are offered without sales or redemption
charges (see page 13).

INVESTMENT POLICIES. The Balanced Fund will invest in common
stocks, preferred stocks, and convertible securities selected by
the Fund's Advisor from among 1,500 issues ranked according to
fundamental factors, such as relative price/earnings ratio,
earnings growth rate, and cash flow. The Fund may hold fixed-
income securities of any maturity, dependent upon economic and
market conditions. The Fund also may hold cash and cash
equivalents (see page 7).

The Growth Fund will invest in common stocks, preferred stocks,
and convertible securities selected by the Fund's Advisor from
among 1,500 issues ranked according to fundamental factors, such
as relative price/earnings ratio, earnings growth rate, and cash
flow (see page 9).

INVESTMENT ADVISOR. CornerCap Investment Counsel, Inc. formerly
known as Cornerstone Capital Corp., acts as the investment
advisor (the "Advisor") to the Balanced Fund and the Growth Fund.
In that capacity, it selects the portfolio holdings (see page
11).

CUSTODIAN. The Trust Dept. of Wachovia Bank of N.C. (the
"Custodian") holds the assets of the Funds.

ADMINISTRATION. Fortune Fund Administration is the Transfer
Agent, Accounting Services Agent and Administrator of each Fund
(see page 12).

DIVIDENDS & DISTRIBUTIONS. The Balanced Fund currently intends to
make two distributions of any net income or capital gains during
each calendar year (see page 16).

The Growth Fund currently intends to make at least one
distribution of any net income or capital gains during each
calendar year (see page 16).

MINIMUM PURCHASE. The minimum initial investment for each Fund is
$2,000 and the minimum subsequent investment is $250 (see page
13).

REDEMPTIONS AND EXCHANGES. Shares of each Fund may be redeemed at
the next determined net asset value, without charge (see page
14). Shareholders of either Fund may also exchange shares of
their respective Fund for shares of the other Fund (see page 14).

INVESTMENT RISKS. The Funds are subject to market risk, interest
rate risk and credit risk. The market for equity securities
tends to be cyclical, with periods when prices generally rise and
periods when they generally decline. The fixed-income portion of
the portfolios is subject to interest rate and credit risk. For
example, as prevailing interest rates increase, bond prices will
generally decrease and vice-versa. Fluctuations in interest
rates will therefore affect the asset value per share of the
Funds. Fixed-income securities are also subject to credit risk
arising from the ability of the issuer to make timely payment of
interest and principal installments. The Funds are intended to
be long-term investment vehicles and are not designed to provide
investors with the means of speculating on short-term movements.
Investors should consider the Funds as vehicles with which to
balance their total investment program's risk (see pages 8, 10).
<PAGE>
SUMMARY OF FUND EXPENSES

The purpose of this table is to assist an investor in
understanding the various costs and expenses that a shareholder
will bear directly or indirectly in connection with an investment
in the Fund.

Balanced Fund Growth Fund
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<S> <C> <C>

Fund Operating Expenses
(as a percentage of average daily net assets)/1/
- ------------------------------------------------

Management Fee........................................................................... 1.00% 1.00%
Other Expenses........................................................................... .30% .50%
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Total Fund Operating Expenses............................................................ 1.30%<F1><F2>1.50% <F1><F2>
</TABLE>

CornerCap Investment Counsel, Inc. (formerly Cornerstone Capital Corp.)
(the "Advisor") has entered into an Investment Advisory Agreement with
each Fund to provide investment management services to the Fund (the
"Advisory Agreements"). In addition, the Advisor has entered into a
new Operating Services Agreement with each Fund for the current fiscal year
to provide virtually all day-to-day operational services to the Fund (the
"Services Agreements"). As is further explained under "Management --
Management Agreements" below, the combined effect for each Fund of its
Advisory Agreement and Services Agreement is to place a cap or ceiling
on each Fund's ordinary operating expenses, excepting brokerage, interest,
taxes, litigation, and other extraordinary expenses. Accordingly, the
expenses for each Fund set forth above have been restated to reflect the
Funds' new fee arrangements. For the Balanced Fund, expenses are capped
at 1.30% of the daily net asset value of the Fund and for the Growth Fund,
expenses are capped at 1.50% of the daily net asset value of the Fund.

During the fiscal year ended March 31, 1998, the Fund was responsible for
its own expenses. However, the Advisor voluntarily waived all or such portion
of its fee and reimbursed the applicable Fund to the extent necessary to
reduce expenses of the Growth Fund to 1.56% and expenses of the Balanced Fund
(on an annualized basis) to 1.53%. Absent such waiver and reimbursement, the
expenses for the Growth Fund and the Balanced Fund would have been 2.07% and
2.78%, respectively.

[FN]
<F1> If you purchase or sell shares of either Fund through a discount
brokerage firm or other financial institution, there may be fees or
commissions charged by them for shareholder transactions.

<F2> The Advisor's agreements with each Fund effectively limit Total
Operating Expenses of each Fund to ensure that the Fund's expenses
do not exceed the designated maximum amount shown above.
</FN>
<PAGE>
EXAMPLE OF FUND EXPENSES

You would pay the following expenses on a $1,000 investment, assuming (1)
a 5% annual return, and (2) redemption at the end of each time period.

1 Yr. 3 Yr. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------
BALANCED FUND $13 $41 $71 $157
GROWTH FUND $15 $47 $82 $179

The purpose of the foregoing example is to assist investors in
understanding the various costs and expenses which stockholders
of the Fund bear directly and indirectly. THE 5% RETURN IS
HYPOTHETICAL AND THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF THE FUND'S PAST OR FUTURE PERFORMANCE. THE
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
<PAGE>
FINANCIAL HIGHLIGHTS For one share outstanding throughout
each period indicated.

GROWTH FUND

The following selected per share data and ratios for each of the
last ten years in the period ended March 31, 1998, have been
examined by Tait, Weller and Baker, independent Certified Public
Accountants, whose report thereon appears in the Growth Fund's
1998 Annual Report to Shareholders, and is incorporated by
reference into this Prospectus. Total return amounts are not
covered by auditors' reports. The Fund's annual report to
shareholders contains further information about the performance
of the Fund, and is available separately and without charge.

Results for the Period Ending March 31, 1998:
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992<F2> 1991<F2> 1990<F1> 1989<F1>
==================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.68 $9.81 $8.61 $7.69 $7.58 $7.60 $6.45 $6.96 $7.37 $6.57

INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .21 0.02 0.04 0.05 0.02 0.23 (0.08) (0.27) 0.09 (0.06)
Net Gains (Losses) on Securities 5.05 1.93 1.22 0.89 0.11 (0.25) 1.23 (0.10) (0.50) 0.92
(both realized and unrealized) --------------------------------------------------------------------------------
Total From Investment Operations 5.26 1.95 1.26 0.94 0.13 (0.02) 1.15 (0.37) (0.41) 0.86
LESS DISTRIBUTIONS --------------------------------------------------------------------------------
Dividends (from net investment income) .22 (.01) (0.06) (0.02) (0.02) 0.00 0.00 (0.14) 0.00 (0.06)
Distribution (from capital gains) 1.87 (.07) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------------------------------------------------------------------------------
Total Distributions 2.09 (.08) (0.06) (0.02) (0.02) 0.00 0.00 (0.14) 0.00 (0.06)
---------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.85 $11.68 $9.81 $8.61 $7.69 $7.58 $7.60 $6.45 $6.96 $7.37
================================================================================
TOTAL RETURN 47.69% 19.94% 14.64% 12.25% 1.71% (0.26%) 15.33% (5.54%) (5.56%) 13.09%

RATIOS/SUPPLEMENTAL DATA

NET ASSETS, END OF PERIOD (X1,000) $17,942 $12,856 $8,371 $7,299 $4,229 $3,042 $1,088 $1,107 $ 1,814 $3,011
RATIO OF EXPENSES TO AVERAGE NET ASSETS
Before Expense Reimbursement 2.07% 2.15% 2.35% 2.69% 3.00% 6.49% 6.26% 8.77% 3.49% 4.44%
After Expense Reimbursement 1.56% 1.71% 1.75% 1.87% 2.00% 2.00% 2.14% 7.77% 2.49% 3.44%
RATIO OF NET INCOME TO AVERAGE NET ASSETS
Before Expense Reimbursement (.34%) (0.24%)(0.11%) (0.70%)(0.67%)(4.10%) (4.41%) (4.80%) (0.09%) (1.93%)
After Expense Reimbursement .17% 0.19% 0.49% 0.12% 0.13% 0.36% (0.29%) (3.80%) 0.91% (0.93%)

PORTFOLIO TURNOVER RATE 48.82% 37.13% 40.83% 55.12% 35.58% 83.40% 91.62% 125.24% 127.45% 145.70%
AVERAGE COMMISSION RATE $ .1201 0.11% N/A N/A N/A N/A N/A N/A N/A N/A

<FN>

<F1> The per share and capital change information represents performance
of Wealth Monitors, Inc., the Fund's Investment Advisor from March
1986 to August 1990.

<F2> The per share and capital change information represents performance
of Dorado/IDS Corporation, the Fund's Investment Advisor from
August 1990 to August 1992. Cornerstone Capital became the advisor
to the Fund in August 1992.
</FN>
<PAGE>
BALANCED FUND

The Balanced Fund began operations on May 24, 1997, following the
closing of a reorganization transaction with The Atlanta Growth
Fund, Inc., pursuant to which the Balanced Fund assumed certain assets
and liabilities of The Atlanta Growth Fund, Inc. The following selected
data and ratios are for the period from May 24, 1997, to May 31, 1997,
the period from commencement of operations to the close of its initial
fiscal year and for the new fiscal year ended March 31, 1998. The
data and ratios have been examined by Tait, Weller and Baker, independent
Certified Public Accountants, whose report thereon appears in the
Balanced Fund's 1998 Annual Report to Shareholders, and is
incorporated by reference into this Prospectus. Total return
amounts are not covered by auditors' reports. The Fund's annual
report to shareholders contains further information about the
performance of the Fund, and is available separately and without
charge. The Balanced Fund initially had a fiscal year ending on
May 31. The Balanced Fund's fiscal year was changed after the May 31,
1997 fiscal year to end March 31 to correspond to the fiscal year of
the Growth Fund.

RESULTS FOR A SHARE OUTSTANDING FOR THE PERIOD:

May 31, 1997 to May 24, 1997 to
March 31, 1997 May 31, 1997

Net asset value, Beginning of period $32.99 $33.20

Income From Investment Operations
Net Investment Income (Loss) 0.24 0.01
Net Gains (Losses) on Securities 2.20 (0.22)
(both realized and unrealized)
Total From Investment Operations 2.44 (0.21)

Less Distributions from
Net Investment Income 0.19 --
Realized Gains 23.03 --
Total Distributions 23.22 --

Net Asset Value, End of period $12.21 $32.99

Total Return 19.13% (0.60%)

Ratios/Supplemental Data

Net Assets, End of Period ($000) $ 2,294 $2,093

Ratios to Average Net Assets
Expenses 1.53%** 2.00% **
Net Investment Income 2.80%** 4.50% **

Portfolio Turnover Rate 13.38% 98.90%
Average Commissions per Share 0.1200 0.1118%

* Commencement of Operations
** Annualized

Per share amounts have been adjusted to reflect a one-for-four reverse
stock split effective June 30, 1997. On June 14, 1997, a capital gain
distribution of $22.91 per share ($5.73 per share on a pre-split basis)
was paid to shareholders. The net asset value per share on June 30,
1997, after the payment of the capital gain distribution and the effect
of the one-for-four reverse split, was $10.86 per share.

(A) The Fund has changed its year end from May 31 to March 31.
(B) Fee waivers reduced the expense ratio and increased the net
investment income ratio by 1.25% in 1998.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES:
BALANCED FUND

The CornerCap Balanced Fund (the "Balanced Fund") is a series of the
CornerCap Group of Funds, a diversified, open-end management investment
company registered with the SEC as required under the Investment Company
Act of 1940 (the "1940 Act"). Shares of the Balanced Fund may be
purchased at their net asset value, without sales load, as next
determined after an account application is received in proper form.

The Balanced Fund's investment objective is to obtain long-term capital
appreciation and current income. The Balanced Fund will attempt to
achieve its objective by normally investing 50% to 70% of its total
assets in equity securities of domestic and foreign issuers and at least
30% in fixed income securities including cash reserves.

The equity securities that the Balanced Fund may purchase consist of
common stocks, preferred stocks, or convertible securities that will
generally be publicly traded on a national securities exchange or over-
the-counter. In selecting portfolio securities for purchase by the
Balanced Fund, the Balanced Fund's investment advisor, CornerCap
Investment Counsel, Inc. (the "Advisor") ranks approximately 1,500
common stocks according to fundamental factors. The three key criteria
are relative price/earnings ratio, earnings growth rate, and cash flows
that are in excess of capital expenditures. Purchases are made from the
most attractive securities based on diversification and risk, and will
be made only if they can be made at prices which, in the judgment of the
Advisor, create the possibility of additional growth in capital. There
can be no assurance that the Balanced Fund will achieve its objective.

The fixed income securities that the Balanced Fund may purchase consist
of obligations of the United States government, its agencies and
instrumentalities; corporate securities including bonds and notes; and
sovereign government, municipal, mortgage-backed and other asset-backed
securities. Investments in U.S. government obligations will include
direct obligations of the U.S. Government, such as U.S. Treasury bills,
notes and bonds, and obligations of U.S. Government authorities,
agencies and instrumentalities, such as the Federal National Mortgage
Association, Federal Home Loan Bank, Federal Financing Bank and Federal
Farm Credit Bank obligations. Mortgage-backed and other asset-backed
securities typically carry a guarantee from an agency of the U.S.
Government or a private issuer of the timely payment of principal and
interest. The Fund may hold securities of any maturity, with the
average maturity varying depending upon economic and market conditions.

The Fund will only invest in those corporate obligations, including
convertible securities, which the Advisor considers to be of investment
grade quality. The Fund invests only in those corporate obligations
which in the Advisor's opinion have the investment characteristics
described by Moody's in rating corporate obligations within its four
highest ratings of Aaa, Aa, A and Baa and by S&P in rating corporate
obligations within its four highest ratings of AAA, AA, A and BBB. It
is possible that the ability of the portfolio to achieve its objective
of current income could be diminished by its restriction on the use of
non-investment grade corporate obligations. For a description of these
ratings, see Appendix A to the SAI. The Fund, however, does not require
that its investments in corporate obligations actually be rated by
Moody's or S&P, and may acquire such unrated obligations which in the
opinion of the Advisor are of a quality at least equal to a rating of
Baa by Moody's or BBB by S&P. Should the rating or quality of a
corporate obligation decline after purchase by the Fund, the Advisor
will reconsider the advisability of continuing to hold such obligations.

The Fund may also hold cash and cash equivalent securities as part of
the Advisor's asset allocation practice or, when market, business or
economic conditions warrant, in the judgment of the Advisor, that
temporary defensive measures be employed. Cash and cash equivalents
will include, among others, treasury bills, banker's acceptances,
certificates of deposits, time deposits and commercial paper. For a
description of these instruments, see Appendix A to the SAI. Cash
equivalents will generally be rated Prime-1 by Moody's or A or better by
S&P, or, if unrated, of comparable quality as determined by the Advisor.
For a description of these ratings, see Appendix A to the SAI.

INVESTMENT RISKS. As a fund investing in both equity and fixed income
securities, the Balanced Fund is subject to market risk, interest rate
risk and credit risk. The market for equity securities in the United
States tends to be cyclical, with periods when the prices of securities
generally rise and periods when they generally decline. All equity
securities are usually influenced to some extent by price movements in
the equities' market. Because of the risks associated with investments
in equity securities, the Balanced Fund is intended to be a long-term
investment vehicle and is not designed to provide investors with a means
of speculating on short-term stock market movements.

The fixed income portion of the Balanced Fund will be subject to risk
arising from fluctuating interest rate levels. For example, as
prevailing interest rates decrease, bond prices will generally increase.
Similarly, when prevailing interest rates increase, bond prices will
generally decrease. The level of price volatility of a bond is
generally dependent upon the length of time until maturity. Bonds with
longer maturities usually have higher yields and greater price
volatility than bonds with shorter maturities. A change in the level of
interest rates will affect the Net Asset Value per share of the Balanced
Fund as well as changing the yield of the Fund.

Fixed income securities are also subject to credit risk arising from the
ability of the issuer to make timely payment of interest and principal
installments. Credit ratings give an indication of the issuer's ability
to maintain these timely payments. Normally, bonds with lower credit
ratings will have higher yields than bonds with the highest credit
ratings. The Fund does not require that its investments in corporate
obligations actually be rated by Moody's of S&P, and it may acquire such
unrated obligations which in the opinion of the Advisor are of a quality
at least equal to a rating of Baa by Moody's or BBB by S&P. With
respect to investments in unrated obligations, the portfolio will be
more reliant on the Advisor's judgment and experience than would be the
case if the Fund invested solely in rated obligations. Obligations
rated Baa by Moody's or BBB by S&P have speculative characteristics. A
rating of Baa by Moody's indicates that the obligation is of "medium
grade," neither highly protected not 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. A rating of BBB by S&P
indicates that the obligation is in the lowest "investment grade"
security rating. Obligations rated BBB are regarded as having an
adequate capacity to pay principal and interest. Whereas such
obligations normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest than obligations in
the top three "investment grade" categories. Both credit and market
risks as described above are increased by investing in fixed-income
obligations rated Baa by Moody's and BBB by S&P. For a more detailed
description of these ratings, see Appendix A to the SAI.

Investors should consider the Balanced Fund as a vehicle with which to
balance their total investment program risks.

FOREIGN SECURITIES. The Balanced Fund may, using the criteria set forth
above, invest up to 25% of its assets in foreign equity or corporate
debt securities. The Advisor anticipates that such investments will be
made in U.S. dollar denominated securities in the form of (i) American
Depository Receipts (ADRs) issued against the securities of foreign
issuers, or (ii) other securities of foreign issuers that are traded on
U.S. national securities exchanges or in the U.S. over-the-counter
market.

There are risks associated with investments in securities of foreign
issuers. Such risks include changes in currency rates, greater
difficulty in commencing lawsuits, differences between U.S. and foreign
economies, and U.S. Government policy with respect to certain
investments abroad. Foreign companies are frequently not subject to the
accounting and financial reporting standards applicable to U.S.
companies, and there may be less information available about foreign
issuers. Securities of foreign issuers are generally less liquid and
more volatile than those of comparable U.S. issuers. There is often
less government regulation of issuers than in the U.S. There is also the
possibility of expropriation or confiscatory taxation, political or
social instability or diplomatic developments that could adversely
affect the value of those investments.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS. The Balanced Fund
may purchase and write options on securities and may invest in futures
contracts for the purchase and sale of foreign currencies, fixed income
securities and instruments based on financial indices, options on
futures contracts and forward contracts. Additional information about
futures, options and other derivative instruments is contained in the
SAI.

YEAR 2000 COMPLIANCE. The investment management, shareholder,
fund accounting and administrative services provided to the Fund
by the Balanced Fund's Advisor, Distributor, Transfer Agent,
Custodian and other third party service providers (collectively,
the "Service Providers") are largely dependent upon the smooth
functioning of their respective computer systems. Many computer
hardware and software systems in use today cannot recognize,
calculate or accurately process date-related information on or
after January 1, 2000, due to the manner in which such systems
encode the year 2000. Such a failure may negatively impact the
handling of securities investments, trades, pricing and account
services, as well as the processing of purchase and sales of
shares of the Balanced Fund. Although the Balanced Fund has
received or is seeking assurances from its Service Providers that
their computer systems are or will be Year 2000 compliant, there
can be no assurance that such systems or any third party computer
systems upon which the Service Providers' computer systems rely
will be Year 2000 compliant on and after January 1, 2000.
Failure by any of the Service Provider's computer systems to
identify and correct Year 2000 problems prior to January 1, 2000
may have significant adverse effects on the Fund.

INVESTMENT OBJECTIVES AND POLICIES:
GROWTH FUND

The CornerCap Growth Fund (the "Growth Fund") is another series of the
CornerCap Group of Funds. Shares of the Growth Fund may be purchased at
their net asset value, without sales load, as next determined after an
account application is received in proper form. The Growth Fund's
investment objective is to obtain long-term capital appreciation.
Income from dividends or interest on portfolio securities is a
secondary objective. The Growth Fund will attempt to achieve its
objective by investing in equity securities of domestic and foreign
issuers.

The equity securities that the Growth Fund may purchase consist of
common stocks, preferred stocks, or convertible securities that will
generally be publicly traded on a national securities exchange or over-
the-counter. In selecting portfolio securities for purchase by the
Growth Fund, the Advisor ranks approximately 1,500 common stocks
according to fundamental factors. The three key criteria are relative
price/earnings ratio, earnings growth rate, and cash flows that are in
excess of capital expenditures. Purchases are made from the most
attractive securities based on diversification and risk, and will be
made only if they can be made at prices which, in the judgment of the
Advisor, create the possibility of additional growth in capital. There
can be no assurance that the Growth Fund will achieve its objective.

The Growth Fund will invest at least 65% of its assets in equity
securities having the characteristics described above; however, it is
expected that under normal circumstances the Growth Fund will be over
90% invested in equity securities. The remainder of the portfolio may
be invested in short-term U.S. Government obligations such as U.S.
Treasury Bills or cash equivalent instruments. In addition, the Growth
Fund may invest part of its assets temporarily in debt obligations, cash
and cash equivalents pending the investment of the proceeds of sales of
shares of the Growth Fund or of portfolio securities, or if market,
economic or business conditions warrant it, for temporary defensive
purposes.

INVESTMENT RISKS. As a fund investing in equity securities, the Growth
Fund is subject to market risk---i.e., the possibility that stock prices
will decline over short or even extended periods when stock prices
generally rise and periods when prices generally decline. The market
for equity securities in the United States tends to be cyclical, with
periods when the prices of securities generally rise and periods when
they generally decline. All equity securities are usually influenced to
some extent by price movements in the equities' market. Because of the
risks associated with investments in equity securities, the Growth Fund
is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculating on short-term stock market
movements. As the Growth Fund will have a large percentage of its
assets invested in stocks, it is not suitable for investors who are
unable or unwilling to assume the risk of loss inherent in equity
investments. Investors should consider the Growth Fund as a vehicle
with which to balance their total investment program risks.

FOREIGN SECURITIES. The Growth Fund may, using the criteria set forth
above, invest up to 20% of its assets in securities of foreign issuers.
The Advisor anticipates that such investments will be made in U.S.
dollar denominated securities in the form of (i) American Depository
Receipts (ADRs) issued against the securities of foreign issuers, or
(ii) other securities of foreign issuers that are traded on U.S.
national securities exchanges or in the U.S. over-the counter market.

YEAR 2000 COMPLIANCE. The investment management, shareholder,
fund accounting and administrative services provided to the Fund
by the Growth Fund's Advisor, Distributor, Transfer Agent,
Custodian and other third party service providers (collectively,
the "Service Providers") are largely dependent upon the smooth
functioning of their respective computer systems. Many computer
hardware and software systems in use today cannot recognize,
calculate or accurately process date-related information on or
after January 1, 2000, due to the manner in which such systems
encode the year 2000. Such a failure may negatively impact the
handling of securities investments, trades, pricing and account
services, as well as the processing of purchase and sales of
shares of the Growth Fund. Although the Growth Fund has received
or is seeking assurances from its Service Providers that their
computer systems are or will be Year 2000 compliant, there can be
no assurance that such systems or any third party computer
systems upon which the Service Providers' computer systems rely
will be Year 2000 compliant on and after January 1, 2000.
Failure by any of the Service Provider's computer systems to
identify and correct Year 2000 problems prior to January 1, 2000
may have significant adverse effects on the Fund.

PRINCIPAL INVESTMENT RESTRICTIONS

The Balanced Fund is subject to certain investment restrictions which
are fundamental policies that cannot be changed without the approval of
the holders of a majority (as defined in the 1940 Act) of the Balanced
Fund's outstanding securities. The Balanced Fund's investment objective
is such a policy. Among its other fundamental policies, the Fund may
not (i) with respect to 75% of its assets, invest more than 5% of the value
of its total assets in securities of any one issuer (other than
securities of the U.S. Government, its agencies and instrumentalities);
or (ii) invest 25% or more of the value of its total assets in
securities of issuers in any one industry. Additional information about
the Balanced Fund's investment restrictions is contained in the SAI.

The Growth Fund is subject to certain investment restrictions which are
fundamental policies that cannot be changed without the approval of the
holders of a majority (as defined in the 1940 Act) of the Growth Fund's
outstanding securities. The Growth Fund's investment objective is such
a policy. Among its other fundamental policies, the Growth Fund may not
(i) invest more than 5% of the value of its total assets in securities
of any one issuer (other than securities of the U.S. Government, its
agencies and instrumentalities); or (ii) invest 25% or more of the value
of its total assets in securities of issuers in any one industry.
Additional information about the Growth Fund's investment restrictions
is contained in the SAI.

It is the position of the staff of the SEC (and an operating although
not a fundamental policy of the Funds) that open-end investment
companies, such as the Funds, should not make certain investments if
thereafter more than 15% of the value of their net assets would be
invested in illiquid assets. The investments included in this 15% limit
are (i) those which are illiquid, e.g., those which are subject to
restriction as to disposition under Federal securities laws (which the
Fund does not expect to own), (ii) fixed time deposits subject to
withdrawal penalties (other than overnight deposits), (iii) repurchase
agreements having a maturity of more than seven days, and (iv)
investments which are not readily marketable. This 15% limit does not
include obligations payable at principal amount plus accrued interest
within seven days after purchase.

MANAGEMENT

BOARD OF TRUSTEES. The Fund's Board of Trustees decides on matters of
general policy and reviews the activities of the Funds, the Funds'
Advisor and officers, and the business operations of the Funds.
For more information regarding the Trustees and the officers of the
CornerCap Group of Funds, please see "Management of the Fund" in the
SAI.

MANAGEMENT AGREEMENTS. CornerCap Investment Counsel, Inc. (formerly
Cornerstone Capital Corp.) (the "Advisor") has entered into an
Investment Advisory Agreement with each Fund to provide investment
management services to the Fund (the "Advisory Agreements"). In
addition, the Advisor has entered into an Operating Services Agreement
with each Fund to provide virtually all day-to-day operational services
to the Fund (the "Services Agreements"). As is further explained below,
the combined effect for each Fund of its Advisory Agreement and Services
Agreement is to place a cap or ceiling on each Fund's ordinary operating
expenses, excepting brokerage, interest, taxes, litigation, and other
extraordinary expenses. For the Balanced Fund, expenses are capped at
1.30% of the daily net asset value of the Fund and for the Growth Fund,
expenses are capped at 1.50% of the daily net asset value of the Fund.

The Advisor was organized as a Georgia corporation and registered with
the SEC as an investment advisor in 1989. The Advisor is controlled by
Thomas E. Quinn and Gene A. Hoots, who together own a controlling
interest of the Advisor's outstanding shares. The Advisor's offices are
located at The Peachtree, Suite 1700, 1355 Peachtree Street, Atlanta,
Georgia 30309.

INVESTMENT ADVISORY AGREEMENTS. Under the terms of each Fund's Advisory
Agreement, the Advisor, subject to the supervision of the Board of
Trustees, will manage the investment operations of the Fund in
accordance with the Fund's investment policies. In consideration of the
Advisor's investment advisory services under their respective Advisory
Agreements with the Advisor, the Balanced Fund and the Growth Fund will
each pay to the Advisor on the last day of each month an annualized fee
equal to 1.00% of average net asset value of the Fund, such fee to be
computed daily based upon the net asset value of the Fund. Each Fund's
Advisory Agreement remains in effect from year to year if approved
annually by the Board of Trustees.

Each Fund's Advisory Agreement contains provisions relating to the
selection of broker-dealers ("brokers") for the Funds' portfolio
transactions. Under each Fund's Advisory Agreement, the Advisor may
consider sales of shares of the Funds and/or of any other investment
companies for which the Advisor acts as investment advisor as a factor
in the selection of brokers to execute brokerage and principal
transactions, subject to the requirements of "best execution," as
defined in the respective Agreement. See the SAI for additional
information as to brokerage transactions for the Funds.

CORNERCAP GROWTH FUND. Mr. Quinn is the portfolio manager for the
Growth Fund. He has worked in investment management and financial
analysis for 24 years, the last seven years as a principal of CornerCap
Investment Counsel. His primary responsibilities are portfolio
management, investment strategy and research. Previously, Mr. Quinn was
Chief Investment Officer for RJR Investment Management, Inc., where he
managed over $600 million in primarily equity assets. He is a Chartered
Financial Analyst and a Certified Public Accountant. His graduate
degrees include an MBA from the University of North Carolina at
Greensboro and an MS in Operations Research from Ohio University.

CORNERCAP BALANCED FUND. Mr. Quinn and D. Ray Peebles are the portfolio
managers for the Balanced Fund. Mr. Peebles has worked with CornerCap
Investment Counsel for six years. He previously worked for Wachovia
Bank of North Carolina. Mr. Peebles is a Level III candidate in the
Chartered Financial Analyst program. He has an MBA from Wake Forest
University and a BS in accounting from North Carolina State University.

Mr. Hoots has worked in investment management and financial analysis
for over 26 years, the last six years as a principal of Cornercap
Investment Counsel. His primary responsibilities are portfolio
management, client service and investment policy. Previously, Mr. Hoots
was Vice President of Reich & Tang and President of RJR Investment
Management, Inc. He has an MBA from the University of North Carolina at
Chapel Hill and a BS in Engineering from N.C. State University.
</R.

Operating Services Agreements.
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Under the terms of each Fund's Services Agreement, the Advisor, subject
to the supervision of the Board of Trustees of the CornerCap Group of
Funds, will provide day-to-day operational services to the Fund
including, but not limited to, providing or arranging to provide
accounting, administrative, legal (except litigation), dividend
disbursing, transfer agent, registrar, custodial, distribution,
shareholder reporting, sub-accounting and recordkeeping services. Each
Services Agreement provides that the Advisor pays all fees and expenses
associated with these and other functions, including, but not limited to,
expenses of legal compliance, shareholder communications, and meetings of
the shareholders and the Board of Trustees.

1
In consideration of the Advisor's services under the Services Agreement
between the Balanced Fund and the Advisor, the Balanced Fund will pay to
the Advisor on the last day of each month an annualized fee equal to
0.30% of average net asset value of the Fund, such fee to be computed
daily based upon the net asset value of the Fund. In consideration of
the Advisor's services under the Services Agreement between the Growth
Fund and the Advisor, the Growth Fund will pay to the Advisor on the
last day of each month an annualized fee equal to 0.50% of average net
asset value of the Fund, such fee to be computed daily based upon the
net asset value of the Fund. The Advisor may also use its own resources,
which may include a portion of its fees under each Fund's respective
Advisory Agreement, to pay for distribution or other marketing related
expenses of the Funds. In regard to the Fund's operating expenses, it
should be noted that most investment companies pay their own operating
expenses directly, while the Funds' expenses (except those specified above)
are paid by the Advisor.

ADMINISTRATOR

Fortune Fund Administration, Inc. serves as the Funds' administrator
(the "Administrator") pursuant to an Administration Agreement. The
Administrator provides certain record-keeping and shareholder servicing
functions required of registered investment companies, and will assist
the Funds in preparing and filing certain financial and other reports,
and performs certain daily functions required for ongoing operations.

Pursuant to the Services Agreement, the Advisor will pay all of the
Administrator's fees under the Administration Agreement. The Administrator
is an affiliate of the Advisor. The Administrator's address is 1389
Peachtree St., N.E., Suite 180, Atlanta, GA 30309.

NET ASSET VALUE

The Funds' net asset values per share are determined as of 4:15 PM on
each day that the New York Stock Exchange is open for trading. The net
asset value per share is the value of the Fund's assets, less its
liabilities, divided by the number of shares of the Fund outstanding.
The value of the Fund's portfolio securities is, in general, the market
value of such securities. Common stocks and other securities that are
listed on a national securities exchange or the NASDAQ National Market
System are valued at the last sale price as of 4:15 PM, New York time,
on each day that the NYSE is open for trading, or, in the absence of
recorded sales, at the last closing price on such exchange or on such
System. Unlisted securities that are not included in such National
Market System are valued at the closing price in the over-the-counter
market. Valuations of fixed-income securities are supplied by
independent pricing services used by the Fund. Valuations of fixed-
income securities are based upon a consideration of yields or prices of
obligations of comparable quality, coupon, maturity and type,
indications as to value from recognized dealers, and general market
conditions. The pricing service may use electronic data processing
techniques and/or computerized matrix systems to determine valuations.
Fixed-income securities for which market quotations are readily
available are valued based upon those quotations. The procedures used by
the pricing service are reviewed by the Fund under the general
supervision of the Trustees. The Trustees may deviate from the
valuation provided by the pricing service whenever, in their judgment,
such valuation is not indicative of the fair value of the obligation.
Securities and other assets for which market quotations are not readily
available are valued by appraisal at their fair value as determined in
good faith by the Advisor under procedures established by and under the
general supervision and responsibility of the Board of Trustees. Debt
securities which mature in less than 60 days are valued at amortized
cost (unless the Board of Trustees determines that this method does not
represent the fair market value of such assets), if their original
maturity was 60 days or less.

THE DISTRIBUTOR

Each of the Funds has entered into a separate Distribution Agreement
with Attkisson, Carter & Akers, Inc. (the "Distributor") pursuant to
which the Distributor acts as each Fund's agent once orders are received
from investors. The Distributor's main office is located at One Buckhead
Plaza, Suite 1450, 3060 Peachtree Road, N.W., Atlanta, Georgia 30305.

For further information regarding the Distribution Agreement, see
"Distribution Agreement" in the Statement of Additional Information.

HOW TO PURCHASE SHARES

Shares of either Fund may be purchased at the Net Asset Value next
determined after receipt of an account application in proper form; see
"Net Asset Value." The minimum initial investment is $2,000 and the
minimum subsequent investment in either Fund is $250. The Funds reserve
the right to reject any account application.

INVESTING BY MAIL. You may purchase shares of a Fund by mailing a
completed account application with a check payable to the appropriate
fund (CornerCap Balanced Fund or CornerCap Growth Fund) to Fortune Fund
Administration, P.O. Box 101281, Atlanta GA 30392-1281. No certificates
will be issued unless specifically requested.

If the purchase being made is a subsequent investment, you should send a
stub from a confirmation previously sent by the Transfer Agent in lieu
of the account application. If no such stub is available, a brief letter
giving the registration of the account and the account number should
accompany the check. In addition, your account number should be written
on the check. Checks do not need to be certified but are accepted
subject to face value in U.S. dollars and must be drawn on a U.S. bank.

INVESTING BY WIRE. You may purchase shares by requesting your bank to
transmit "Federal Funds" by wire directly to the Transfer Agent. To
invest by wire please call the Transfer Agent at 1-888-813-8637 for
instructions, then notify the Distributor by calling 1-800-848-9555.
Your bank may charge you a small fee for this service. The Account
Application which accompanies this Prospectus should be completed and
promptly forwarded to the Transfer Agent. This application is required
to complete the Fund's records in order to allow you access to your
shares. Once your account is opened by mail or by wire, additional
investments may be made at any time through the wire procedure described
above. Be sure to include your name and account number in the wire
instructions you provide your bank.

EXCHANGE PRIVILEGE. You may exchange your shares in any CornerCap fund
for those in another CornerCap fund, on the basis of their respective
net asset values at the time of the exchange. Before making any
exchange, be sure to review the prospectus of the funds involved and
consider their differences.

An exchange is the redemption of shares from one fund followed by the
purchase of shares in another. Therefore, any gain or loss realized on
the exchange is recognizable for federal income tax purposes (unless
your account is tax deferred).

You may make four exchanges out of each fund during each calendar year.
The fund accounts must be identically registered.

The Fund reserves the right to reject any exchange request, or to modify
or terminate exchange privileges, in the best interests of the Fund and
its shareholders. Notice of all such modifications or termination will
be given at least 60 days prior to the effective date of the change in
privilege, except for unusual instances (such as when redemptions of the
exchange are suspended under Section 22(e) of the Investment Company Act
of 1940, or when sales of the fund into which you are exchanging are
temporarily stopped).

<PAGE>
HOW TO REDEEM SHARES

The Funds will redeem for cash all of their full and fractional shares
at the net asset value per share next determined after receipt of a
redemption request in proper form, as described below.

A shareholder wishing to redeem shares may do so at any time by writing
or calling CornerCap Group of Funds, Fortune Fund Administration, Inc.,
P.O. Box 101281, Atlanta, GA 30392-1281, (888) 813-8637. The
instructions should specify the appropriate fund and number of shares to
be redeemed and be signed by all registered owners exactly as the
account is registered. It will not be accepted unless it contains all
required documents in proper form, as described below. Redemption
requests under $25,000 may be made (1) via facsimile, if all required
documents are provided and appropriate signatures appear on the fax; or
(2) via telephone, if the shareholder has telephone redemption privileges.

Redemptions of $25,000 or more require a signature guarantee. A signature
guarantee is also required for any redemption that is to be mailed to an
address other than the address of record.

In addition to written instructions, if any shares being redeemed or
repurchased are represented by stock certificates, the certificates must
be surrendered. The certificates must either be endorsed or accompanied
by a stock power signed by the registered owners, exactly as the
certificates are registered. Additional documents may be required from
corporations or other organizations, fiduciaries or anyone other than
the shareholder of record.

The Funds do not issue share certificates unless specifically requested.
Maintaining shares in uncertificated form minimizes the risk of loss or
theft of a share certificate. A lost, stolen or destroyed certificate
can only be replaced upon obtaining a sufficient indemnity bond. The
cost of such a bond, which is borne by the shareholder, can be 2% or
more of the value of the missing certificate. To resolve questions
concerning documents, contact the Transfer Agent at 1-888-813-8637.

Payment for shares tendered will be made within three days after receipt
by the transfer agent of instructions, certificates, if any, and other
documents, all in proper form. However, payment may be delayed under
unusual circumstances, as specified in the 1940 Act or as determined by
the SEC. Payment may also be delayed for any shares purchased by check
for a reasonable time (not to exceed 15 days) necessary to determine
that the purchase check will be honored. Payment will be sent only to
shareholders at the address of record. A signature guarantee is
required if the shareholder requests that the check be mailed anywhere
other than to the shareholder's address of record.

If the Board of Trustees determines that it would be detrimental to the
best interests of the remaining shareholders of the Funds to make
payment wholly or partly in cash, the Funds may pay the redemption price
in whole or in part by a distribution in kind of securities from the
portfolio of the Funds, in lieu of cash, in conformity with applicable
rules of the SEC. The Funds, however, have elected to be governed by
Rule 18f-1 under the 1940 Act pursuant to which the Funds are obligated
to redeem shares solely in cash up to the lesser of $250,000 or one
percent of the net asset value of the Funds during any 90 day period for
any one shareholder. Should redemptions by any shareholder exceed such
limitation, the Funds will have the option of redeeming the excess in
cash or in kind. If shares are redeemed in kind, the redeeming
shareholder would incur brokerage costs in converting the assets into
cash.

The Board of Trustees may, in order to reduce the expenses of the Funds,
redeem all of the shares of any shareholder (other than a qualified
retirement plan) whose account has declined to a net asset value of less
than $2,000, as a result of a transfer or redemption, at the net asset
value determined as of the close of business on the business day
preceding the sending of notice of such redemption. The Funds would
give shareholders whose shares were being redeemed 60 days prior written
notice in which to purchase sufficient shares to avoid such redemption.

TELEPHONE PURCHASES, EXCHANGES, AND REDEMPTIONS FOR SECURITIES FIRMS

The following purchase and redemption telephone procedures have been
established by the Funds for investors who purchase Fund shares through
member firms of the National Association of Securities Dealers, Inc.
(the "NASD") who have accounts with the Funds for the benefit of their
clients. Telephone purchases and redemptions will be effected by the
Funds only through such NASD members, who in turn will be responsible
for crediting the investor's account at the NASD member with the amount
of any purchase or redemption pursuant to its account agreement with the
investor's instruction to purchase or redeem Fund shares.

NASD member firms may charge a reasonable handling fee for providing
this service. Such fees are established by each NASD member acting
independently from the Funds and neither the Funds nor the Distributor
receives any part of such fees. Such handling fees may be avoided by
investing directly with the Funds through the Distributor, but investors
doing so will not be able to avail themselves of the Funds' telephone
privileges.

Member firms of the NASD may telephone the Distributor at (800) 628-4077
and place purchase and redemption orders on behalf of investors who
carry their investments in a Fund through the member's account with the
appropriate Fund.

PURCHASE BY TELEPHONE. Shares shall be purchased at the next determined
net asset value. Payment for shares purchased must be received from the
NASD member firm by the appropriate Fund by wire no later than the third
business day following the purchase order. If payment for any purchase
order is not received on or before the third business day, the order is
subject to cancellation by Fund and the NASD member firm's account with
the Fund will immediately be charged for any loss.

REDEMPTION BY TELEPHONE. The redemption price is the net asset value
next determined after the receipt of the redemption request by the
applicable Fund. Payment for shares redeemed will be made or delayed as
provided above under "How to Redeem Shares."

By electing telephone purchase and redemption privileges, NASD member
firms, on behalf of themselves and their clients, agree that neither the
Funds, the Distributor nor the Transfer Agent shall be liable for
following instructions communicated by telephone and reasonably believed
to be genuine. Each Fund and its agents provide written confirmation of
transactions initiated by telephone as a procedure designed to confirm
that telephone instructions are genuine. In addition, all telephone
transactions are recorded. As a result of these and other policies, the
NASD member firm may bear the risk of any loss in the event of such a
transaction. If either Fund fails to employ this and other established
procedures, it may be liable. Each Fund reserves the right to modify or
terminate telephone privileges at any time.

DIVIDENDS AND TAX STATUS

The Balanced Fund currently intends to make two distributions of any net
income or capital gains during each calendar year. The first
distribution will be made following the Fund's fiscal year-end, March
31, and the second distribution, if any, will be declared by December 31
of each year with respect to any additional undistributed capital gains
earned during the one year period ended October 31 of such calendar year
and with respect to any undistributed income for such calendar year.
The amount and frequency of distributions by the Balanced Fund are not
guaranteed and are subject to the discretion of the Fund's Board of
Trustees.

The Growth Fund currently intends to make at least one distribution of
any net income or capital gains during each calendar year. The
distribution will be made following the Growth Fund's fiscal year-end,
March 31, and any additional distributions will be declared by December
31 of each year with respect to any additional undistributed capital
gains earned during the one year period ended October 31 of such
calendar year and with respect to any undistributed income for such
calendar year. The amount and frequency of distributions by the Growth
Fund are not guaranteed and are subject to the discretion of the Fund's
Board of Trustees.

Each Fund has qualified and elected to be treated as a "regulated
investment company" under Subchapter M of the Code during its previous
fiscal periods and intends to continue to do so in the future. Neither
Fund will be subject to Federal income or excise taxes because each Fund
will distribute all of its net investment income and net capital gains
to its shareholders for a fiscal year in accordance with the timing
requirements of the Code and by meeting other requirements of the Code
relating to the sources of income and diversification of its assets.

All dividends from net investment income together with those derived
from the excess of net short-term capital gain over net long-term
capital loss (collectively, "income dividends"), will be taxable as
ordinary income to shareholders whether or not paid in additional
shares. Any distributions derived from the excess of net long-term
capital gain over net short-term capital loss ("capital gains
distributions") are taxable as long-term capital gains to shareholders
regardless of the length of time a shareholder has owned his shares.
Any loss realized upon the redemption of shares within six months after
the date of their purchase will be treated as a long-term capital loss
to the extent of amounts treated as distributions of net long-term
capital gain during such six-month period.

Income dividends and capital gains distributions are taxed in the manner
described above, regardless of whether they are received in cash or
reinvested in additional shares. For the convenience of investors, each
Fund reinvests all income dividends and capital gains distributions in
full and fractional shares of the respective Fund based on the net asset
value per share at the close of business on the record date, unless the
shareholder has given prior written notice to the transfer agent that
the payment should be made in cash. Shareholders of each Fund will
receive information annually on Form 1099 with respect to the amount and
nature of income and gains to assist them in reporting the prior
calendar year's distributions on their Federal income tax return.

Distributions which are declared in October, November, or December but
which are not paid to shareholders until the following January will be
treated for tax purposes as if received on December 31 of the year in
which they were declared.

Under the Code, the Funds may be required to impose backup withholding
at a rate of 31% on income dividends and capital gains distributions,
and payment of redemption proceeds to individuals and other non-exempt
shareholders, if such shareholders have not provided a correct taxpayer
identification number and made the certifications required by the
Internal Revenue Service on the account application. A shareholder in
either Fund may also be subject to backup withholding if the Internal
Revenue Service or a broker notifies the applicable Fund that the
shareholder is subject to backup withholding.

Each Fund may liquidate the account of any of its shareholder who fails
to furnish its certificate of taxpayer identification number within 30
days after date the account was opened.

Shareholders should consult their tax advisors with respect to
applicable foreign, state and local taxes.

PERFORMANCE INFORMATION

From time to time, the Funds may publish their total return in
advertisements and communi-cations to investors. Total return
information will include the Funds' average annual compounded rate of
return over the most recent four calendar quarters and over the period
from the Funds' inception of operations. The Funds may also advertise
aggregate and average total return information over different periods of
time. The Funds' total return will be based upon the value of the
shares acquired through a hypothetical $1,000 investment at the
beginning of the specified period and the net asset value of such shares
at the end of the period, assuming reinvestment of all distributions at
net asset value. Total return figures will reflect all recurring
charges against the Funds' income.

Investors should note that the investment results of the Funds will
fluctuate over time, and any presentation of the Funds' total return for
any period should not be considered as a representation of what an
investor's total return may be in any future period. For further
information, including the formula and an example of the total return
calculation, see the SAI.

In reports or other communications to shareholders and in advertising
material, the Funds may compare performance with that of other mutual
funds as listed in the rankings prepared by Lipper Analytical Services,
Inc. and similar independent services that monitor the performance of
mutual funds, or unmanaged indices of securities of the type in which
the Fund invests.

GENERAL INFORMATION

The CornerCap Funds were organized on January 6, 1986, as a
Massachusetts business trust. Prior to August 13, 1990, the Growth Fund
was known as Wealth Monitors Fund. Between August 13, 1990, and
September 25, 1992, the Growth Fund was known as the Sunshine Growth
Trust. From September 25, 1992, until July 28, 1995, the Growth Fund
was known as the Cornerstone Growth Fund. The Balanced Fund is a new
series of the CornerCap Funds and has only recently begun operations on
May 24, 1997, following the closing of a reorganization transaction with
the Atlanta Growth Fund, Inc. pursuant to which the Balanced Fund
acquired the assets and assumed certain liabilities of the Atlanta
Growth Fund, Inc. The Declaration of Trust provides that the Trustees
will not be liable for errors of judgment or mistakes of fact or law,
but nothing in the Declaration of Trust protects a Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office. In addition, the
Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Funds.

Shareholders are entitled to one vote for each full share held (and
fractional votes for fractional shares) and may vote in the election of
Trustees and on other matters submitted to meetings of shareholders. It
is not contemplated that regular annual meetings of shareholders will be
held. The Board of Trustees may, at its own discretion, create
additional series of shares.

The Declaration of Trust provides that the Funds' shareholders have the
right, upon the declaration in writing or vote of more than two-thirds
of its outstanding shares, to remove a Trustee. The Trustees will call
a meeting of shareholders to vote on the removal of a trustee upon the
written request of the record holders of ten percent of its shares. In
addition, ten shareholders holding the lesser of $25,000 worth or one
percent of Fund shares may advise the Trustees in writing that they wish
to communicate with other shareholders for the purpose of requesting a
meeting to remove a Trustee. The Trustees will then, if requested by
the applicants, mail at the applicants' expense the applicants'
communications to all other shareholders. Except for a change in the
name of the Funds, no amendment may be made to the Declaration of Trust
without the affirmative vote of the holders of more than 50% of its
outstanding shares. The holders of shares have no pre-emptive or
conversion rights. Shares when issued are fully paid and non-assessable,
except as set forth above. The Funds may be terminated upon the sale of
its assets to another issuer, if such sale is approved by the vote of
the holders of more than 50% of the outstanding shares of each series,
or upon liquidation and distribution of its assets, if so approved. If
not so terminated, the Funds will continue indefinitely.

With respect to the purchase and sale of the Funds' shares, certain
broker/dealers other than the Distributor may charge a fee to the Funds
investors for executing transactions on the investor's behalf. Such
transactions may be executed on the investor's behalf directly through
the Funds Transfer Agent without payment of such a fee. See the section
entitled "How to Purchase Shares" in the Prospectus. The Advisor may
follow a policy of considering sales of shares of the Funds as a factor
in the selection of brokers to be used in portfolio transactions for the
Funds, subject to the requirement of best execution discussed in the SAI
under "Portfolio Transactions and Brokerage."

The Advisor will sell portfolio securities whenever it is appropriate,
regardless of how long the securities have been held by the Funds. The
Advisor will change each Fund's investments whenever it believes doing
so furthers the Fund's investment objective. Portfolio turnover
involves some expense to each Fund, including brokerage commissions and
other transaction costs and reinvestment in other securities. Portfolio
turnover may also result in the recognition of capital gains which may
be distributed to shareholders. Tax considerations may limit each Fund's
portfolio turnover. The annual rate on portfolio turnover for both
Funds is anticipated to be between 30% and 70%. For the year ended
March 31, 1998, the portfolio turnover rate for the Growth Fund was
48.82%. For the period May 27, 1997 to March 31, 1998, the portfolio
turnover rate for the Balanced Fund was 13.38%.

Tait, Weller & Baker serves as the certified public accountants of the
Funds. Fortune Fund Administration, Inc. serves as the Funds' Transfer
Agent and Accounting Services Agent pursuant to separate Transfer Agent
and Accounting Services Agreements. Fortune Fund Administration, Inc.
provides the daily pricing for the Fund. Pursuant to the Services
Agreement, the Advisor will pay all of Fortune Fund Administration,
Inc.'s fees under the Transfer Agency and Accounting Services Agreements.

The Trust Department of Wachovia Bank of N.C. is the custodian of the
Funds' assets. The legality of the securities offered by this
prospectus will be passed upon for the CornerCap Funds by Kilpatrick
Stockton LLP. Kilpatrick Stockton LLP also represents the Advisor and
Administrator and would represent them in any dispute with the Fund.
Shareholder inquiries related to the administration of shareholder
accounts should be directed to the Transfer Agent, and inquiries related
to the investment objectives of the Fund should be directed to the
Advisor.
<PAGE>
[LOGO]
CORNERCAP
GROUP OF FUNDS
A "Series" Investment Company

CORNERCAP BALANCED FUND CORNERCAP GROWTH FUND

STATEMENT OF ADDITIONAL INFORMATION

Shareholder Services Questions Investment Objectives Questions

Toll-Free Voice: (888) 81-FUNDS Toll-Free Voice: (800) 728-0670
(888) 813-8637
Local Voice: (404) 892-9313 Local Voice: (404) 870-0700
Telecopier: (404) 892-9353 Telecopier: (404) 870-0770

The CornerCap Balanced Fund (the "Balanced Fund") and the
CornerCap Growth Fund (the "Growth Fund") are series of the
CornerCap Group of Funds (collectively, the "Funds"), a
diversified open-end management investment company registered
with the Securities and Exchange Commission (the "SEC") as
required by the Investment Company Act of 1940 (the "1940
Act").

This Statement of Additional Information is not a prospectus,
and it should be read in conjunction with the Prospectus of
the Funds dated July 29, 1998, as may be amended from time to
time (the "Prospectus"); copies of the Prospectus may be
obtained from the Funds, c/o CornerCap Investment Counsel, Inc.
(formerly Cornerstone Capital Corp.), The Peachtree, 1355
Peachtree Street, Suite 1700, Atlanta, GA, 30309. CornerCap
Investment Counsel, Inc. (the "Advisor") is the Funds' investment
advisor.

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.

The date of this Statement of Additional Information is July 29,
1998.

<PAGE>
INVESTMENT OBJECTIVES AND POLICIES

The investment objective of the Balanced Fund is to obtain
long-term capital appreciation and current income. The
Balanced Fund will attempt to achieve its objective by
normally investing 50% to 70% of its total assets in equity
securities of domestic and foreign issuers and at least 30% in
fixed income securities including cash and cash equivalents.
The portfolio and investment strategies of the Balanced Fund
are described in the Prospectus. The following discussion
elaborates on the disclosure of the Balanced Fund's investment
policies contained in the Prospectus.

The investment objective of the Growth Fund is long-term
capital appreciation. Income from dividends or interest on
portfolio securities is a secondary objective in the
management of the Growth Fund's portfolio. The portfolio and
investment strategies of the Fund are described in the Fund's
Prospectus. Prior to August 13, 1990, the Growth Fund was
known as Wealth Monitors Fund. From August 13, 1990 to
September 25, 1992 the Growth Fund was known as the Sunshine
Growth Trust. From September 25, 1992 to June 30, 1995 the
Fund was known as the Cornerstone Growth Fund. The following
discussion elaborates on the disclosure of the Growth Fund's
investment policies contained in the Prospectus.

REPURCHASE AGREEMENTS. The Funds may engage in repurchase
agreements. A repurchase agreement, which may be considered a
"loan" under the Investment Company Act of 1940 as amended
(the "1940 Act"), is a transaction in which a fund purchases a
security and simultaneously commits to sell the security to
the seller at an agreed-upon price and date (usually not more
than seven days) after the date of purchase. The resale price
reflects the purchase price plus an agreed-upon market rate of
interest which is unrelated to the coupon rate or maturity of
the purchased security. The Fund's risk is limited to the
ability of the seller to pay the agreed-upon amount on the
delivery date. In the opinion of management, this risk is not
material; if the seller defaults, the underlying security
constitutes collateral for the seller's obligations to pay.
This collateral, equal to or in excess of 100% of the
repurchase agreement, will be held by the custodian for the
Fund's assets. However, in the absence of compelling legal
precedents in this area, there can be no assurance that the
Funds will be able to maintain its rights to such collateral
upon default of the issuer of the repurchase agreement. To
the extent that the proceeds from a sale upon a default in the
obligation to repurchase are less than the repurchase price,
the Funds would suffer a loss. It is intended (but not
required) that at no time will the market value of any of the
Fund's securities subject to repurchase agreements exceed 50%
of the total assets of entering into such agreement. It is
intended for the Funds to enter into repurchase agreements
with commercial banks and securities dealers. The Board of
Trustees will monitor the creditworthiness of such entities.

FOREIGN SECURITIES. The Funds may invest directly in foreign
equity securities traded on U.S. national exchanges or over-
the-counter and in foreign securities represented by ADRs, as
described below. The Fund may also invest in foreign
currency-denominated fixed-income securities. Investing in
securities issued by companies whose principal business
activities are outside the United States may involve
significant risks not present in domestic investments. For
example, there is generally less publicly available
information about foreign companies, particularly those not
subject to the disclosure and reporting requirements of the
U.S. securities laws. Foreign issuers are generally not bound
by uniform accounting, auditing, and financial reporting
requirements and standards of practice comparable to those
applicable to domestic issuers. Investments in foreign
securities also involve the risk of possible adverse changes
in investment or exchange control regulations, expropriation
or confiscatory taxation, limitation on the removal of cash or
other assets of the Fund, political or financial instability,
or diplomatic and other developments which could affect such
investments. Further, economies of particular countries or
areas of the world may differ favorably or unfavorably from
the economy of the United States. Foreign securities often
trade with less frequency and volume than domestic securities
and therefore may exhibit greater price volatility.
Additional costs associated with an investment in foreign
securities may include higher custodial fees than apply to
domestic custodial arrangements, and transaction costs of
foreign currency conversions.

ADRs provide a method whereby the Funds may invest in
securities issued by companies whose principal business
activities are outside the United States. These securities
will not be denominated in the same currency as the securities
into which they may be converted. Generally, ADRs, in
registered form, are designed for use in U.S. securities
markets.

ADRs are receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying securities, and
may be issued as sponsored or unsponsored programs. In
sponsored programs, an issuer has made arrangements to have
its securities trade in the form of ADRs. In unsponsored
programs, the issuer may not be directly involved in the
creation of the program. Although regulatory requirements
with respect to sponsored and unsponsored programs are
generally similar, in some cases it may be easier to obtain
financial information from an issuer that has participated in
the creation of a sponsored program.

OPTIONS. The Funds may purchase and write put and call
options on securities. The Fund may write a call or put
option only if the option is "covered" by the Funds holding a
position in the underlying securities or by other means which
would permit immediate satisfaction of the Fund's obligation
as writer of the option. The purchase and writing of options
involves certain risks. During the option period, the covered
call writer has, in return for the premium on the option,
given up the opportunity to profit from a price increase in
the underlying securities above the exercise price, but, as
long as its obligation as a writer continues, has retained the
risk of loss should the price of the underlying security
decline. The writer of an option has no control over the time
when it may be required to fulfill its obligation as a writer
of the option. Once an option writer has received an exercise
notice, it cannot effect a closing purchase transaction in
order to terminate its obligation under the option and must
deliver the underlying securities at the exercise price. If a
put or call option purchased by the Funds is not sold when it
has remaining value, and if the market prices of the
underlying security, in the case of a put, remains equal to or
greater than the exercise price or, in the case of a call,
remains less than or equal to the exercise price, the Funds
will lose its entire investment in the option. Also, where a
put or call option on a particular security is purchased to
hedge against price movements in a related security, the price
of the put or call option may move more or less than the price
of the related security. There can be no assurance that a
liquid market will exist when the Funds seeks to close out an
option position. Furthermore, if trading restrictions or
suspensions are imposed on the options market, a Fund may be
unable to close out a position.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds
may invest in interest rate futures contracts and options
thereon ("futures options"); the Funds may enter into foreign
currency futures contracts and options; and the Funds may
enter into stock index futures contracts and options thereon.
Such contracts may not be entered into for speculative
purposes. When a Fund purchases a futures contract, an amount
of cash, U.S. Government securities, or money market
instruments equal to the fair market value less initial and
variation margin of the futures contract will be deposited in
a segregated account to collateralize the position and thereby
ensure that such futures contract is "covered."

There are several risks associated with the use of futures and
futures options. The value of a futures contract may decline.
With respect to transactions for hedging, there can be no
guarantee that there will be a correlation between price
movements in the hedging vehicle and in the portfolio
securities being hedged. An incorrect correlation could
result in a loss on both the hedged securities in a Fund and
the hedging vehicle so that the Fund's return might have been
greater had hedging not been attempted. There can be no
assurance that a liquid market will exist at a time when a
Fund seeks to close out a futures contract or a futures option
position. Most futures exchanges and boards of trade limit
the amount of fluctuation permitted in futures contract prices
during a single day; once the daily limit has been reached on
a particular contract, no trades may be made that day at a
price beyond that limit. In addition, certain of these
instruments are relatively new and without a significant
trading history. As a result, there is no assurance that an
active secondary market will develop or continue to exist.
Lack of a liquid market for any reason may prevent a Fund from
liquidating an unfavorable position and the Fund would remain
obligated to meet margin requirements until the position is
closed.

Each Fund will only enter into futures contracts or futures
options which are standardized and traded on a U.S. or foreign
exchange or board of trade, or similar entity, or quoted on an
automated quotation system. Each Fund will use financial
futures contracts and related options only for "bona fide
hedging" purposes, as such term is defined in applicable
regulations of the Commodity Futures Trading Commission, or,
with respect to positions in financial futures and related
options that do not qualify as "bona fide hedging" positions,
will enter into such non-hedging positions only to the extent
that aggregate initial margin deposits plus premiums paid by
it for open futures option positions, less the amount by which
any such positions are "in-the-money," would not exceed 5% of
the Fund's total assets.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Balanced
Fund may enter into forward foreign currency exchange
contracts ("forward contracts") to attempt to minimize the
risk to the Fund from adverse changes in the relationship
between the U.S. dollar and foreign currencies. A forward
contract is an obligation to purchase or sell a specific
currency for an agreed price at a future date which is
individually negotiated and privately traded by currency
traders and their customers. Such contracts may not be
entered into for speculative purposes. The Balanced Fund will
not enter into forward contracts if, as a result, more than
10% of the value of its total assets would be committed to the
consummation of such contracts, and will segregate assets or
"cover" its positions consistent with requirements under the
1940 Act to avoid any potential leveraging of the Fund.

SWAP AGREEMENTS. The Balanced Fund may enter into interest
rate, index and currency exchange rate swap agreements for
purposes of attempting to obtain a particular desired return
at a lower cost to the Balanced Fund than if it had invested
directly in an instrument that yielded that desired return.
Swap agreements are two-party contracts entered into primarily
by institutional investors for periods ranging from a few
weeks to more than one year. In a standard "swap"
transaction, two parties agree to exchange the returns (or
differentials in rates of return) earned or realized on
particular predetermined investments or instruments. The
gross returns to be exchanged or "swapped" between the parties
are calculated with respect to a "notional amount," i.e., the
return on or increase in value of a particular dollar amount
invested at a particular interest rate, in a particular
foreign currency, or in a "basket" of securities representing
a particular index. Commonly used swap agreements include
interest rate caps, under which, in return for a premium, one
party agrees to make payments to the other to the extent that
interest rates exceed a specified rate, or "cap;" interest
rate floors, under which, in return for a premium, one party
agrees to make payments to the other to the extent that
interest rates fall below a specified level, or "floor;" and
interest rate collars, under which a party sells a cap and
purchases a floor or vice versa in an attempt to protect
itself against interest rate movements exceeding given minimum
or maximum levels.

The "notional amount" of the swap agreement is only a fictive
basis on which to calculate the obligations which the parties
to a swap agreement have agreed to exchange. Most swap
agreements entered into by the Balanced Fund would calculate
the obligations of the parties to the agreement on a "net
basis." Consequently, the Balanced Fund's obligations (or
rights) under a swap agreement will generally be equal only to
the net amount to be paid or received under the agreement
based on the relative values of the positions held by each
party to the agreement (the "net amount"). Obligations under
a swap agreement will be accrued daily (offset against amounts
owing to the Balanced Fund) and any accrued but unpaid net
amounts owed to a swap counterpart will be covered by the
maintenance of a segregated account consisting of cash, U.S.
Government securities, or high- grade debt obligations, to
avoid any potential leveraging of the Fund. The Balanced Fund
will not enter into a swap agreement with any single party if
the net amount owed or to be received under existing contracts
with that party would exceed 5% of the Fund's total assets.

MORTGAGE-RELATED SECURITIES. The Balanced Fund may invest in
mortgage-backed and other asset-backed securities. These
securities include mortgage pass-through certificates,
collaterized mortgage obligations, mortgage-backed bonds and
securities representing interests in other types of financial
bonds.

Mortgage pass-through securities representing interests in
"pools" of mortgage loans in which payments of both interest
and principal on the securities are generally made monthly, in
effect "passing through" monthly payments made by the
individual borrowers on the mortgage loans which underlie the
securities (net of fees paid to the issuer or guarantor of the
securities).

Payment of principal and interest on some mortgage pass-
through securities may be guaranteed by the full faith and
credit of the U.S. Government (in the case of securities
guaranteed by the Government National Mortgage Association
["GNMA"]); or guaranteed by agencies or instrumentalities of
the U.S. Government (in the case of securities guaranteed by
the Federal National Mortgage Association ["FNMA"] or the
Federal Home Loan Mortgage Corporation ["FHLMC"], which are
supported only by the discretionary authority of the U.S.
Government to purchase the agency's obligations).

CMOs are securities which are typically collateralized by
portfolios of mortgage pass-through securities guaranteed by
GNMA, FNMA, or FHLMC. Similar to a bond, interest and prepaid
principal on a CMO are paid, in most cases, semiannually.
CMOs are structured into multiple classes, with each class
bearing a different stated maturity. Monthly payments of
principal, including prepayments, are first returned to
investors holding the shortest maturity class; investors
holding the longer maturity classes will receive principal
only after the first class has been retired. CMOs that are
issued or guaranteed by the U.S. Government or by any of its
agencies or instrumentalities will be considered U.S.
Government securities by the Fund, while other CMOs, even if
collateralized by U.S. Government securities, will have the
same status as other privately issued securities for purposes
of applying the Fund's diversification tests.

In a typical CMO transaction, a corporation ("issuer") issues
multiple series (e.g., A, B, C, Z) of CMO bonds ("Bonds").
Proceeds of the Bond offering are used to purchase mortgages
or mortgage pass-through certificates ("Collateral"). The
Collateral is pledged to a third-party trustee as security for
the Bonds. Principal and interest payments from the
Collateral are used to pay principal on the Bonds in the order
A, B, C, Z. The Series A, B, and C Bonds all bear current
interest. Interest on the Series Z Bond is accrued and added
to principal and a like amount is paid as principal on the
Series A, B, or C Bond currently being paid off. When the
Series A, B, and C Bonds are paid in full, interest and
principal on the Series Z Bond begins to be paid currently.
With some CMOs, the issuer serves as a conduit to allow loan
originators (primarily builders or savings and loan
associations) to borrow against their loan portfolios.

Mortgage-backed bonds are general obligations of the issuer
fully collateralized directly or indirectly by a pool of
mortgages. The mortgages serve as collateral for the issuer's
payment obligations on the bonds but interest and principal
payments on the mortgages are not passed through either
directly (as with GNMA certificates and FNMA and FHLMC pass-
through securities) or on a modified basis (as with CMOs).
Accordingly, a change in the rate of prepayments on the pool
of mortgages could change the effective maturity of a CMO but
not that of a mortgage-backed bond (although, like many bonds,
mortgage-backed bonds can provide that they are callable by
the issuer prior to maturity).

Asset-backed securities are securities representing interests
in other types of financial assets, such as automobile-finance
receivables or credit-card receivables. Such securities are
subject to many of the same risks as are mortgage-backed
securities, including prepayment risks and risks of
foreclosure. They may or may not be secured by the
receivables themselves or may be unsecured obligations of
their issuers.

RISKS OF MORTGAGE-RELATED SECURITIES. Investment in mortgage-
backed securities poses several risks, including prepayment,
market, and credit risk. Prepayment risk reflects the risk
that borrowers may prepay their mortgages faster than
expected, thereby affecting the investment's average life and
perhaps its yield. Whether or not a mortgage loan is prepaid
is almost entirely controlled by the borrower. Borrowers are
most likely to exercise prepayment options at the time when it
is least advantageous to investors, generally prepaying
mortgages as interest rates fall, and slowing payments as
interest rates rise. Besides the effect of prevailing
interest rates, the rate of prepayment and refinancing of
mortgages may also be affected by home value appreciation,
ease of the refinancing process and local economic conditions.

Market risk reflects the risk that the price of the security
may fluctuate over time. The price of mortgage-backed
securities may be particularly sensitive to prevailing
interest rates, the length of time the security is expected to
be outstanding, and the liquidity of the issue. In a period
of unstable interest rates, there may be decreased demand for
certain types of mortgage-backed securities, and a fund
invested in such securities wishing to sell them may find it
difficult to find a buyer, which may in turn decrease the
price at which they may be sold.

Credit risk reflects the risk that a Fund may not receive all
or part of its principal because the issuer or credit enhancer
has defaulted on its obligations. Obligations issued by U.S.
Government-related entities are guaranteed as to the payment
of principal and interest, but are not backed by the full
faith and credit of the U.S. Government. The performance of
private label mortgage-backed securities, issued by private
institutions, is based on the financial health of those
institutions. With respect to GNMA certificates, although
GNMA guarantees timely payment even if homeowners delay or
default, tracking the "pass-through" payments may, at times,
be difficult.

CONVERTIBLE SECURITIES. Although the equity investments of
the Funds consist primarily of common and preferred stocks,
the Funds may buy securities convertible into common stock
if, for example, the Advisor believes that a company's
convertible securities are undervalued in the market.
Convertible securities eligible for purchase by the Funds
include convertible bonds, convertible preferred stocks, and
warrants. A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specific
amount of the corporation's capital stock at a set price for a
specified period of time. Warrants do not represent ownership
of the securities, but only the right to buy the securities.
The prices of warrants do not necessarily move parallel to the
prices of underlying securities. Warrants may be considered
speculative in that they have no voting rights, pay no
dividends, and have no rights with respect to the assets of a
corporation issuing them. Warrant positions will not be used
to increase the leverage of the Fund; consequently, warrant
positions are generally accompanied by cash positions
equivalent to the required exercise amount.

GENERAL. Notwithstanding the foregoing, the Funds do not
currently anticipate investing more than 5% of their
respective assets in repurchase agreements, foreign
securities, options, futures, currency contracts, swap
agreements or mortgage related securities.

PORTFOLIO TURNOVER

An annual portfolio turnover rate is, in general, the
percentage computed by taking the lesser of purchases or sales
of portfolio securities (excluding certain short-term
securities) for a year and dividing that amount by the monthly
average of the market value of such securities during the
year. The Growth Fund's portfolio turnover rate for the
fiscal year ended March 31, 1998 was 48.8%. The Growth Fund's
portfolio turnover rate in the future is expected to be in the
range of 30% to 70%. The Balanced Fund's portfolio turnover
rate for the fiscal year ended March 31, 1998 was 13.38%. The
Balanced Fund's portfolio turnover rate in the future is
expected to be in the range of 30% to 70%. Higher turnover
would involve correspondingly greater commissions and
transaction costs.

INVESTMENT RESTRICTIONS

Each of the Funds has adopted the following restrictions (in
addition to those indicated in its Prospectus) as fundamental
policies, which may not be changed without the favorable vote
of the holders of a "majority," as defined in the 1940 Act, of
the Fund's outstanding voting securities. Under the 1940 Act,
the vote of the holders of a "majority" of a Fund's
outstanding voting securities means the vote of the holders of
the lesser of (i) 67% of the shares of the applicable Fund
represented at a meeting at which the holders of more than 50%
of its outstanding shares are represented or (ii) more than
50% of the outstanding shares.

The Growth Fund may not:

1. Purchase securities on margin (but the Fund may obtain
such short-term credits as may be necessary for the clearance
of transactions);

2. Issue senior securities, borrow money or pledge its
assets except that the Fund may borrow from a bank for
temporary or emergency purposes in amounts not exceeding 33%
(taken at the lower of cost or current value) of its total
assets (not including the amount borrowed) and pledge its
assets to secure such borrowings; the Fund will not purchase
any additional portfolio securities while such borrowings are
outstanding;

3. Purchase any security if as a result the Fund would then
hold more than 10% of any class of securities of an issuer
(taking all common stock issues of an issuer as a single
class, all preferred stock issues as a single class, and all
debt issues as a single class) or more than 33.33% of the
outstanding voting securities of an issuer;

4. Purchase any security if as a result the Fund would then
have more than 5% of its total assets (taken at current value)
invested in securities of companies (including predecessors)
less than three years old;

5. Invest in securities of any issuer if, to the knowledge
of the Fund, any officer or Trustee of the Fund or officer or
director of the Advisor owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such Trustees,
officers and Trustees who own more than 1/2 of 1% own in the
aggregate more than 5% of the outstanding securities of such
issuer;

6. Act as underwriter except to the extent that, in
connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal
securities laws;

7. Make investments for the purpose of exercising control or
management;

8. Participate on a joint, or joint and several basis in any
trading account in securities;

9. Invest in securities of other registered investment
companies;

10. Invest in interests in oil, gas or other mineral
exploration or development programs, although it may invest in
the common stocks of companies which invest in or sponsor such
programs;

11. Make loans, except through repurchase agreements;

12. Purchase warrants if as a result the Fund would then
have more than 5% of its total net assets (taken at the lower
of cost or current value) invested in warrants, or if more
than 2% of the value of the Fund's total net assets would be
invested in warrants which are not listed on the New York or
American Stock Exchanges, except for warrants included in
units or attached to other securities;

13. Buy or sell commodities or commodity contracts, or
real estate or interests in real estate, although it may
purchase and sell securities which are secured by real estate
and securities of companies which invest or deal in real
estate. It may buy or sell futures contracts or options
thereon for hedging purposes as described in the Fund's
prospectus.

The Balanced Fund may not:

1. Purchase securities on margin (but the Fund may obtain
such short-term credits as may be necessary for the clearance
of transactions);

2. Issue senior securities, borrow money or pledge its
assets except as permitted by the 1940 Act.

6. Act as underwriter except to the extent that, in
connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal
securities laws;

7. Make investments for the purpose of exercising control or
management;

8. Participate on a joint, or joint and several basis in any
trading account in securities;

9. Invest in securities of other registered investment
companies except as permitted by Section 12 of the 1940 Act;

10. Invest in interests in oil, gas or other mineral
exploration or development programs, although it may invest in
the common stock of companies which invest in or sponsor such
programs;

11. Make loans, except through repurchase agreements;

MANAGEMENT

The Board of Trustees is responsible for the overall
management of the Funds, including general supervision and
review of its investment activities. The officers, who
administer the Funds' daily operations, are appointed by the
Board of Trustees. The current Trustees and principal
officers of the Funds, their addresses, and their principal
occupations for the past five years are set forth below.
"Interested" trustees, as defined by the 1940 Act, are
designated below by an asterisk.

NAME (Age)
Address

(a) Position With Trust
(b) Principal Occupations During Past Five Years

THOMAS E. QUINN (52)
The Peachtree, Suite 1700
1355 Peachtree St. NE
Atlanta, GA 30309
(a) Trustee, President, CFO, and Treasurer
(b) President, CornerCap Investment Counsel

GENE A. HOOTS (58)
3000 Big Oak Dr.
Charlotte, NC 28210
(a) Vice-President
(b) Chairman, CornerCap Investment Counsel

RICHARD T. BEAN (35)
The Peachtree, Suite 1700
1355 Peachtree St. NE
Atlanta, GA 30327
(a) Vice-President and Secretary
(a) Portfolio Manager, CornerCap Investment Counsel
Assistant Controller, Godwins Inc. (an
employee benefit plan administrator)

RICHARD L. BOGER (52)
303 Townsend Place, NW
Atlanta, GA 30327
(a) Trustee
(b) President, Export Insurance Services, Inc.

G. HARRY DURITY (50)
58 Close Road
Greenwich, CT 06831
(a) Trustee
(b) Sr. Vice President, Corporate Development,
Automatic Data Processing, Inc.

LAURIN M. MCSWAIN (46)
3000 Andrews Drive, NW, No. 5
Atlanta, GA 30305
(a) Trustee
(b) Attorney, Bloodworth & McSwain

The Growth Fund incurred aggregate Trustees' fees and expenses
for fiscal years ended March 31, 1997 and 1998, of $7,939 and $7,422,
respectively. The Balanced Fund incurred aggregate Trustees' fees and
expenses for fiscal year ended March 31, 1998, $1,250. Trustees who
are not affiliated with the Advisor receive $500 per regular meeting
and committee meeting attended, plus reimbursement of out of pocket
expenses for attending Board meetings. During the 1998 fiscal year,
each non-affiliated trustee of each Fund received $2,000 on account
of fees, plus reimbursement of expenses.

ADVISORY AND ADMINISTRATION ARRANGEMENTS

Reference is made to "Management -- Management Agreements" in
the Prospectus for certain information concerning the
management and advisory arrangements of the Funds.

ADVISORY AND OPERATIONAL SERVICE AGREEMENTS. CornerCap
Investment Counsel, Inc. (the "Advisor") has entered into an
Investment Advisory Agreement with each Fund to provide
investment management services to the Fund (the "Advisory
Agreements"). In addition to the Advisory Agreements, the
Advisor has entered into an Administrative Services Agreement
with each Fund to provide, or make arrangements for the
provision of, virtually all day-to-day operational services to
the Fund (the "Services Agreements").

The Advisor was organized as a Georgia corporation and
registered with the SEC as an investment advisor in 1989. The
Advisor is controlled by Thomas E. Quinn and Gene A. Hoots,
who together own a controlling interest of the Advisor's
outstanding shares. The Advisor's offices are located at The
Peachtree, Suite 1700, 1355 Peachtree Street, Atlanta, Georgia
30309.

As explained in the Prospectus, the terms of the Advisory
Agreements and the Services Agreements empower the Advisor,
subject to the Board of Trustees of the CornerCap Group of
Funds, to manage each respective Fund's assets and provide or
arrange for the provision of operational and other
administrative services for the day-to-day operation of each
respective Fund. The combined effect of each Fund's Advisory
Agreement and Services Agreement is to place a cap or ceiling
on the total expenses of the Fund, excepting brokerage
interest, taxes, litigation, and other extraordinary expenses.
For the Balanced Fund, the cap or ceiling on such expenses is
at an annual rate of 1.30% of the daily net asset value of the
Fund. For the Growth Fund, the cap of ceiling on such
expenses is at an annual rate of 1.50% of the daily net asset
value of the Fund.

ADVISORY AGREEMENTS. The Balanced Fund has entered into an
Investment Advisory Agreement dated November 6, 1996 with the
Advisor and the Growth Fund has entered into an Investment
Advisory Agreement dated September 9, 1992 with the Advisor.
Each Fund pays the Advisor for the services performed under
its respective Advisory Agreement a monthly fee at the annual
rate of 1% of each Fund's average daily net assets. Each
Advisory Agreement also provides that in the event the expenses
of the Fund (including the fees of the Advisor and amortization
of organization expenses but excluding interest, taxes, brokerage
commissions and extraordinary expenses) for any fiscal year exceed
the limit set by applicable regulations of a state securities
commission, the Advisor will reduce its fee to the each Fund by
the amount of such excess up to the full amount of the advisor's
annual fee. Any such reductions are accrued and paid in the same
manner as the Advisor's fee and are subject to readjustment during
the year. During the fiscal years ended March 31, 1996, 1997 and
1998, the Growth Fund paid the Advisor fees of $32,229, $62,000
and $75,000, respectively. During the period May 24, 1997 through
March 31, 1998, the Advisor subsidized the Balanced Fund in the amount
of $17,376.

Unless earlier terminated, each Advisory Agreement will remain
in effect from year to year if approved annually (a) by the
Board of Trustees of the CornerCap Group of Funds or by a
majority of the outstanding shares of the applicable Fund; and
(b) by a majority of the Trustees who are not parties to such
contract or interested persons (as defined in the Investment
Company Act of 1940) of any such party. Each Advisory
Agreement terminates automatically upon assignment and may be
terminated without penalty on 60 days written notice at the
option of either party thereto or by the vote of the
shareholders of the applicable Fund.

The Advisory Agreements also provide that the Advisor shall
not be liable to the Funds for any error of judgment by the
Advisor or for any loss sustained by the Funds except in the
case of a breach of fiduciary duty with respect to the receipt
of compensation for services (in which case any award of
damages will be limited as provided in the 1940 Act) or of
willful misfeasance, bad faith, gross negligence or reckless
disregard of duty.

SERVICES AGREEMENTS. Each Fund pays the Advisor for the
services performed under its respective Services Agreement.
The Balanced Fund pays the Advisor a monthly fee at the annual
rate of .30% of the Fund's average daily net assets. The
Growth Fund pays the Advisor a monthly fee at an annual rate
of .50% of the Fund's average daily net assets.

Under their respective Services Agreements, each Fund and the
Advisor have entered into several agreements with third party
providers to provide, among other services, accounting,
administrative, dividend disbursing, transfer agent,
registrar, custodial, shareholder reporting, sub-accounting
and recordkeeping services to the Fund. Neither Fund is
obligated to pay any expenses or fees under any of these
third party agreements.

PORTFOLIO TRANSACTIONS AND
BROKERAGE

The Advisory Agreement states that in connection with its
duties to arrange for the purchase and the sale of securities
held in the portfolio of the Funds by placing purchase and
sale orders for the Funds, the Advisor shall select such
broker-dealers ("brokers") as shall, in the Advisor's
judgment, implement the policy of the Funds to achieve "best
execution" i.e., prompt and efficient execution at the most
favorable securities price. In making such selection, the
Advisor is authorized in the Advisory Agreements to consider
the reliability, integrity and financial condition of the
broker.

The Advisor is also authorized by the Advisory Agreements to
consider whether the broker provides brokerage and/or research
services to the Funds and/or other accounts of the Advisor.
The Advisory Agreements state that the commissions paid to
brokers may be higher than another broker would have charged
if a good faith determination is made by the Advisor that the
commission is reasonable in relation to the services provided,
viewed in terms of either that particular transaction or the
Advisor's overall responsibilities as to the accounts as to
which it exercises investment discretion and that the Advisor
shall use its judgment in determining that the amount of
commissions paid are reasonable in relation to the value of
brokerage and research services provided and need not place or
attempt to place a specific dollar value on such services or
on the portion of commission rates reflecting such services.
The Advisory Agreements provide that to demonstrate that such
determinations were in good faith, and to show the overall
reasonableness of commissions paid, the Advisor shall be
prepared to show that commissions paid (i) were for purposes
contemplated by the Advisory Agreements; (ii) were for
products or services which provide lawful and appropriate
assistance to the Advisor's decision-making process; and (iii)
were within a reasonable range as compared to the rates
charged by brokers to other institutional investors as such
rates may become known from available information. The Funds
recognize in the Advisory Agreements that, on any particular
transaction, a higher than usual commission may be paid due to
the difficulty of the transaction in question.

The research services discussed above may be in written form
or through direct contact with individuals and may include
information as to particular companies and securities as well
as services assisting the Funds in the valuation of the Funds'
investments. The research which the Advisor receives for the
Fund's brokerage commissions, whether or not useful to the
Funds, may be useful to the Advisor in managing the accounts
of the Advisor's other advisory clients. Similarly, the
research received for the commissions of such accounts may be
useful to the Funds.

In the over-the-counter market, securities are frequently
traded on a "net" basis with dealers acting as principal for
their own accounts without a stated commission, although the
price of the security usually includes a profit to the dealer.
Money market instruments usually trade on a "net" basis as
well. On occasion, certain money market instruments may be
purchased by the Funds directly from an issuer in which case
no commissions or discounts are paid. In underwritten
offerings, securities are purchased at a fixed price which
includes an amount of compensation to the underwriter,
generally referred to as the underwriter's concession or
discount.

During the three fiscal years ended March 31, 1996, 1997 and
1998, the Growth Fund paid total brokerage commissions of
$46,000, $62,000 and $59,940, respectively. For the period
from May 24, 1997 (commencement of operations), through March
31, 1998, the Balanced Fund paid brokerage commissions of
$12,500.

THE DISTRIBUTOR

Reference is made to "The Distributor" in the Prospectus. Set
forth below is further information about the Distributor and
the Distribution Agreement.

The Balanced Fund entered into a Distribution Agreement effective
as of December 6, 1996, and the Growth Fund entered into a Distribution
Agreement effective as of March 31, 1995 with Atkisson, Carter & Akers, Inc.
a securities broker/dealer registered pursuant to the Securities
Exchange Act of 1934, and located in Atlanta, Georgia. No fees are
paid pursuant to this Agreement.

The Distribution Agreement will remain in effect from year to
year, but only so long as such continuance is approved at
least annually by a vote of the Board of Trustees of the
CornerCap Group of Funds or by vote of a majority of the
outstanding voting securities of the Fund and of the Trustees
who, except for their positions as Trustees, are not
"interested persons" (as defined in the Investment Company
Act) of the Funds. In addition either party to each Fund's
respective Distribution Agreement may terminate the
Distribution Agreement upon 60 days written notice to the
other party. The Distribution Agreements terminate
automatically if "assigned" (as defined in the Investment
Company Act).

<PAGE>
NET ASSET VALUE

As indicated in the Prospectus, the net asset value per share
of the Fund's shares will be determined as of 4:15 p.m. on
each day that the New York Stock Exchange ("NYSE") is open for
trading. The NYSE annually announces the days on which it
will not be open for trading; the most recent announcement
indicates that it will not be open on the following days: New
Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. However, it should be noted that the NYSE may close on
days not included in that announcement.

In determining the net asset value of the Funds' shares,
common stocks and other securities that are listed on a
national securities exchange or the NASDAQ National Market
System are valued at the last sale price as of 4:15 p.m., New
York time, on each day that the NYSE is open for trading, or,
in the absence of recorded sales, at the last closing price on
such exchange or on such System. Unlisted securities that are
not included in such National Market System are valued at the
closing price in the over-the-counter market. Valuations of
fixed-income securities are supplied by independent pricing
services used by each Fund. Valuations of fixed-income
securities are based upon a consideration of yields or prices
of obligations of comparable quality, coupon, maturity and
type, indications as to value from recognized dealers, and
general market conditions. The pricing service may use
electronic data processing techniques and/or computerized
matrix system to determine valuations. Fixed-income
securities for which market quotations are readily available
are value based upon those quotations. The procedures used by
the pricing service are reviewed by the applicable Fund under
the general supervision of the Trustees. The Trustees may
deviate from the valuation provided by the pricing service
whenever, in their judgment, such valuation is not indicative
of the fair value of the obligation.

Securities and other assets for which market quotations are
not readily available are valued by appraisal at their fair
value as determined in good faith by the Advisor under
procedures established by and under the general supervision
and responsibility of the Board of Trustees. Debt securities
which mature in less than 60 days are valued at amortized cost
(unless the Board of Trustees determines that this method does
not represent the fair market value of such assets), if their
original maturity was 60 days or less.

TAX STATUS

The following information supplements and should be read in
conjunction with the section in the Funds' Prospectus entitled
"Dividends and Tax Status."

When an income dividend or capital gains distribution is paid
by either Fund, net asset value per share of the appropriate
Fund is reduced automatically by the amount of the dividend or
distribution. If net asset value per share is reduced below a
shareholder's cost basis as a result, such a distribution
might still be taxable to the shareholder as ordinary income
or capital gain (as the case may be) although in effect it
represents a return of invested capital. For this reason,
investors should consider carefully the desirability of
purchasing shares immediately prior to a distribution date.

Neither Fund intends to invest in foreign issuers which meet
the definition in the Code of passive foreign investment
companies ("PFICs"). However, foreign corporations are not
required to certify their status as PFICs to potential U.S.
investors, and the Funds may unintentionally acquire stock in
a PFIC. Either Fund's income and gain, if any, from the
holding of PFIC stock may be subject to a non-deductible tax
at the Fund level.

A portion of each Fund's income dividends may be eligible for
the dividends-received deduction allowed to corporations
under the Code, if certain requirements are met. Investment
income received by either Fund from sources within foreign
countries may be subject to foreign income taxes withheld at
the source.

The treatment of income dividends and capital gains
distributions to shareholders of the Funds under the various
foreign, state, and local income tax laws may not parallel
that under the Federal law. Shareholders should consult their
tax adviser with respect to applicable foreign, state, and
local taxes.

GENERAL

The Funds are series of the CornerCap Group of Funds. The
Declaration of Trust of the CornerCap Group of Funds permits
its Trustees to issue an unlimited number of full and
fractional shares of beneficial interest and to divide or
combine the shares into a greater or lesser number of shares
without thereby changing the proportionate beneficial interest
in the Funds. Each share represents an interest in a Fund
proportionately equal to the interest of each other share.

Upon either Fund's liquidation, all shareholders of such Fund
would share pro rata in the net assets of the Fund in question
available for distribution to shareholders. If they deem it
advisable and in the best interest of shareholders, the Board
of Trustees may create additional classes of shares which
differ from each other only as to dividends. The Board of
Trustees has created two classes of shares (i.e., the
CornerCap Balanced Fund and the CornerCap Growth Fund), but
the Board may create additional classes in the future,
which have separate assets and liabilities; each of such
classes has or will have a designation including the word
"Series" or "Fund." Matters submitted to shareholders must be
approved by a majority of the outstanding securities of each
series, unless the matter does not affect a particular series,
in which case only the affected series' approval will be
required. Income, direct liabilities and direct operating
expenses of each series will be allocated directly to each
series, and general liabilities and expenses of the Funds will
be allocated among the series in proportion to the total net
assets of each series by the Board of Trustees.

Under Massachusetts law, a shareholder of a Massachusetts
business trust may be held liable as a partner under certain
circumstances. The Declaration of Trust, however, contains an
express disclaimer of shareholder liability for its acts or
obligations and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into
or executed by the Funds or its Trustees. The Declaration of
Trust provides for indemnification and reimbursement of
expenses out of the appropriate Fund's property for any
shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Funds shall, upon
request, assume the defense of any claim made against any
shareholder for any act or obligation of the Funds and satisfy
any judgment thereon. In addition, the operation of the Funds
as investment companies would not likely give rise to
liabilities in excess of its assets. Thus the risk of a
shareholder incurring financial loss on account of shareholder
liability is highly unlikely and is limited to the relatively
remote circumstances in which the Funds would be unable to
meet its obligations.

With respect to the purchase and sale of shares of either
Fund, certain broker/dealers other than the Distributor may
charge a fee to Fund investors for executing transactions on
the investor's behalf. Such transactions may be executed on
the investor's behalf directly through the Fund's Transfer
Agent without payment of such a fee. See the section
entitled "How to Purchase Shares" in the Prospectus. Fortune
Fund Administration, Inc., serves as the Transfer Agent and
accounting services agent. Fortune Fund Administration, Inc.,
in its function as Transfer Agent, disburses dividends,
processes new accounts, purchases, redemptions, transfers, and
issues certificates. Wachovia Bank acts as each Fund's
custodian to hold its assets in safekeeping and collect
income.

The Funds' independent public accountants, Tait, Weller &
Baker, perform an annual audit of the Funds' accounts, assist
in the preparation of certain reports to the SEC, and prepare
the Funds' tax returns.

PRINCIPAL SHAREHOLDERS

As of March 31, 1998, no shareholder owned beneficially more
than 5% of the outstanding shares of the Fund.

PERFORMANCE INFORMATION

Growth Fund. The average annual rates of return (unaudited)
as of March 31, 1998 for the Growth Fund for the periods
listed below are as follows:

1 year 47.69%
3 years 26.63%
5 years _____%
5.5 years 18.61%

(Since inception of Management by CornerCap Investment
Counsel)

Example:

Based on the average annual compound rates of return listed
above over these periods, you could have expected the
following values on a $10,000 investment assuming no
redemption at the end of each time period.

March 31, 1998

(Unaudited)

One Year 3 Years 5 years 5.5 Years

$14,769 $20,305 $23,189 $25,566

CornerCap Investment Counsel, Inc. (formerly Cornerstone
Capital Corp.) became the investment advisor to the Growth
Fund in August 1992. Prior to that time, the Growth Fund was
known by other names and was advised and managed by other
entities. The Growth Fund was organized originally on January 6,
1986. Per share income and capital changes for the last
ten years of the Growth Fund are included in the Prospectus
under "Financial Highlights" and performance information since
inception is available upon request.

The Balanced Fund. The average annualized rate of return
(unaudited) for the period May 27, 1997 to March 31, 1998
(since inception) for the Balanced Fund is as follows:

18.41%

Example:

Based on the average annual compound rates of return listed
above over the period May 27, 1997 to March 31, 1998 (since
inception), you could have expected the following values on a
$10,000 investment assuming no redemption at the end of the
period:

$11,841 (unaudited)

CornerCap Investment Counsel, Inc. (formerly Cornerstone
Capital Corp.) has been investment advisor to the Balanced
Fund since its inception following the closing of a
reorganization transaction with The Atlanta Growth Fund, Inc.
on May 24, 1997, pursuant to which the Balanced Fund assumed
certain assets and Liabilities of The Atlanta Growth Fund,
Inc.

PERFORMANCE CALCULATION. The following is a brief description
of how performance is calculated. Quotations of average
annual total return for the Funds will be expressed in terms of
the average annual compounded rate of return of a hypothetical
investment in the Fund over periods of 1 year, 5 years, and
since inception. These are the annual total
rates of return that would equate the initial amount invested
to the ending redeemable value. These rates of return are
calculated with the following formula:

P(1+T)n = ERV

(where T = average annual total return; ERV = ending
redeemable value of a hypothetical initial payment of $10,000;
and n = number of years). All total return figures reflect
the deduction of a proportional share of Fund expenses on an
annual basis, and assume that all dividends and distributions
are reinvested when paid.

<PAGE>
FINANCIAL STATEMENTS

The financial statements of the Growth Fund for the year ended
March 31, 1998 and the report of the Growth Fund's independent
accountants are included in the Growth Fund's Annual Report to
shareholders and are incorporated by reference into this SAI.
A copy of the Annual Report accompanies this SAI.

The Balanced Fund is a series of CornerCap that began operations
on May 24, 1997, following the closing of a reorganization transaction
with The Atlanta Growth Fund, Inc., pursuant to which the Balanced
Fund assumed certain assets and liabilities of The Atlanta Growth
Fund, Inc. The financial statements of the Balanced Fund for the
fiscal year ended March 31, 1998, and the Report of the Balanced
Fund's independent accountants are included in the Balanced Fund's
Annual Report to Shareholders and are incorporated by reference
into this SAI. A copy of the Annual Report accompanies this SAI.

<PAGE>
APPENDIX A

Some of the terms used in the Fund's Prospectus and this
Statement of Additional Information are described below.

The term "money market" refers to the marketplace composed of
the financial institutions which handle the purchase and sale
of liquid, short-term, high-grade debt instruments. The money
market is not a single entity, but consists of numerous
separate markets, each of which deals in a different type of
short-term debt instrument. These include U.S. Government
obligations, commercial paper, certificates of deposit and
bankers' acceptances, which are generally referred to as money
market instruments.

U.S. Government obligations are debt securities (including
bills, notes and bonds) issued by the U.S. Treasury or issued
by an agency or instrumentality of the U.S. Government which
is established under the authority of an Act of Congress.
Such agencies or instrumentalities include, but are not
limited to, the Federal National Mortgage Association,
Government National Mortgage Association, the Federal Farm
Credit Bank, and the Federal Home Loan Bank. Although all
obligations of agencies, authorities and instrumentalities are
not direct obligations of the U.S. Treasury, payment of the
interest and principal on these obligations is generally
backed directly or indirectly by the U.S. Government. This
support can range from the backing of the full faith and
credit of the United States to U.S. Treasury guarantees, or to
the backing solely of the issuing instrumentality itself. In
the case of securities not backed by the full faith and credit
of the United States, the investor must look principally to
the agency issuing or guaranteeing the obligation for ultimate
repayment, and may not be able to assert a claim against the
United States itself in the event the agency or
instrumentality does not meet its commitments.

Bank obligations include certificates of deposit which are
negotiable certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a
definite period of time (usually from 14 days to one year) at
a stated interest rate.

Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft which has been drawn on it
by a customer. These instruments reflect the obligation both
of the bank and of the drawer to pay the face amount of the
instrument upon maturity.

Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time at a stated
interest rate.

Commercial paper consists of short-term (usually one to 180
days) unsecured promissory notes issued by corporations in
order to finance their current operations.

Corporate debt obligations are bonds and notes issued by
corporations and other business organizations, including
business trusts, in order to finance their long-term credit
needs.

Certificates of deposit are negotiable certificates issued
against funds deposited in a commercial bank for a definite
period of time and earning a specified return.

Mortgage-backed securities are interests in a pool of mortgage
loans. Most mortgage securities are pass-through securities,
which means that they provide investors with payments
consisting of both principal and interest as mortgages in the
underlying mortgage pool are paid off by the borrowers. The
dominant issuers or guarantors of mortgage securities are the
Government National Mortgage Association ("GNMA"), the Federal
National Mortgage Association ("FNMA") and the Federal Home
Loan Mortgage Corporation ("FHLMC").

Collateralized mortgage obligations ("CMOs") are hybrid
instruments with characteristics of both mortgage-backed and
mortgage pass-through securities. Similar to a bond, interest
and prepaid principal on a CMO are paid, in most cases, semi-
annually. CMOs may be collateralized by whole mortgage loans
but are more typically collateralized by portfolios of
mortgage pass-through securities guaranteed by GNMA, FHLMC, or
FNMA. CMOs are structured into multiple classes, with each
class bearing a different stated maturity. Monthly payments of
principal, including prepayments, are first returned to
investors holding the shortest maturity class; investors
holding the longer maturity classes receive principal only
after the first class has been retired.

Municipal bonds are debt obligations which generally have a
maturity at the time of issue in excess of one year and are
issued to obtain funds for various public purposes. The two
principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit and
taxing power for the payment of principal and interest.
Revenue bonds are payable only from the revenues derived from
a particular facility or class of facilities, or, in some
cases, from the proceeds of a special excise or specific
revenue source. Industrial development bonds or private
activity bonds are issued by or on behalf of public
authorities to obtain funds for privately operated facilities
and are, in most cases, revenue bonds which do not generally
carry the pledge of the full faith and credit of the issuer of
such bonds, but depend for payment on the ability of the
industrial user to meet its obligations (or any property
pledged as security).

Zero coupon bonds are debt obligations issued without any
requirement for the periodic payment of interest. Zero coupon
bonds are issued at a significant discount from face value.
The discount approximates the total amount of interest the
bonds would accrue and compound over the period until maturity
at a rate of interest reflecting the market rate at the time
of issuance. A Fund, if it holds zero coupon bonds in its
portfolio, however, would recognize income currently for
Federal tax purposes in the amount of the unpaid, accrued
interest (determined under tax rules) and generally would be
required to distribute dividends representing such income to
shareholders currently, even though funds representing such
income would not have been received by the Fund. Cash to pay
dividends representing unpaid, accrued interest may be
obtained from sales proceeds of portfolio securities and Fund
shares and from loan proceeds. Because interest on zero
coupon obligations is not paid to the Fund on a current basis
but is in effect compounded, the value of the securities of
this type is subject to greater fluctuations in response to
changing interest rates than the value of debt obligations
which distribute income regularly.

RATINGS OF CORPORATE DEBT OBLIGATIONS. The characteristics of
corporate debt obligations rated by Moody's are generally as
follows:

Aaa - Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally
strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise
what are generally known as high grade bonds. They are rated
lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and
interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the
future.

Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative
elements. The future of such bonds cannot be considered as
well assured.

B - Bonds which are rated B generally lack characteristics of
a desirable investment.

Caa - Bonds rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with
respect to principal or interest.

Ca - Bonds rated Ca are speculative to a high degree.

C - Bonds rated C are the lowest rated class of bonds and are
regarded as having extremely poor prospects.

The characteristics of corporate debt obligations rated by S&P
are generally as follows:

AAA - This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to pay
principal and interest.

AA - Bonds rated AA also qualify as high quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA
issues only in small degree.

A - Debt rated A has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

BBB - Debt rated BBB is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely
to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated
categories.

BB - Debt rated BB is predominantly speculative with respect
to capacity to pay interest and repay principal in accordance
with terms of the obligation. BB indicates the lowest degree
of speculation; CC indicates the highest degree of
speculation.

BB,B,CCC,CC - Debt in these ratings is predominantly
speculative with respect to capacity to pay interest and repay
principal in accordance with terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest.

A bond rating is not a recommendation to purchase, sell or
hold a security, inasmuch as it does not comment as to market
price or suitability for a particular investor.

The ratings are based on current information furnished by the
issuer or obtained by the rating services from other sources
which they consider reliable. The ratings may be changed,
suspended or withdrawn as a result of changes in or
unavailability of, such information, or for other reasons.

RATINGS OF COMMERCIAL PAPER. Commercial paper rated A-1 by
Standard & Poor's has the following characteristics: liquidity
ratios are adequate to meet cash requirements; the issuer's
long-term debt is rated "A" or better; the issuer has access
to at least two additional channels of borrowing; and basic
earnings and cash flow have an upward trend with allowances
made for unusual circumstances. Typically, the issuer's
industry is well established and the issuer has a strong
position within the industry.

Commercial paper rated Prime 1 by Moody's is the highest
commercial paper assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in
certain areas; (3) evaluation of the issuer's products in
relation to competition and consumer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength
of a parent company and the relationships which exist with the
issuer; and (8) recognition by the management of obligations
which may be present or may arise as a result of public
interest questions and preparations to meet such obligations.
Relative strength or weakness of the above factors determine
how the issuer's commercial paper is rated within various
categories.

DETERMINATION OF CREDIT QUALITY OF UNRATED SECURITIES. In
determining whether an unrated debt security is - of
comparable quality to a rated security, the Adviser may
consider the following factors, among others:

(1) other securities of the issuer that are rated;

(2) the issuer's liquidity, debt structure, repayment
schedules, and external credit support facilities;

(3) the reliability and quality of the issuer's management;

(4) the length to maturity of the security and the percentage
of the portfolio represented by securities of that issuer;

(5) the issuer's earnings and cash flow trends;

(6) the issuer's industry, the issuer's position in its
industry, and an appraisal of speculative risks which may be
inherent in the industry;

(7) the financial strength of the issuer's parent and its
relationship with the issuer;

(8) the extent and reliability of credit support, including a
letter of credit or third party guarantee applicable to
payment of principal and interest;

(9) the issuer's ability to repay its debt from cash sources
or asset liquidation in the event that the issuer's backup
credit facilities are unavailable;

(10) other factors deemed relevant by the Advisor.

<PAGE>
FORM N-1A
PART C OTHER INFORMATION

ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements for the Growth Fund. Incorporated
by reference to the Fund's Annual Report to Shareholders for
the fiscal year ended March 31, 1998.

Financial Statements for the Balanced Fund. Incorporated by
reference to the Balanced Fund's Annual Report for the fiscal
year ended March 31, 1998.

(b) Exhibits:

(1) (a) Declaration of Trust, as supplemented. Incorporated
by Reference from PEA No. 13, filed November 26, 1996.

(2) By-Laws. Incorporated by Reference from PEA No. 13,
filed November 26, 1996.

(3) Not Applicable.

(4) Certificate Specimen. Incorporated by Reference from PEA
No. 7, filed September 23, 1992.

(5) (a) Investment Advisory Agreement for Growth Fund (dated
September 9, 1992). Incorporated by Reference from PEA No. 8,
filed July 29, 1993.

(b) Investment Advisory Agreement for Balanced Fund.
Incorporated by Reference from Form N-14, filed December 2,
1996.

(6) (a) Distribution Agreement (dated March 31, 1995).
Incorporated by Reference from PEA No. 10, filed July 31,1995.

(b) First Amendment to Distribution Agreement.
Incorporated by Reference from N-14, filed December 2, 1996.

(7) Not Applicable.

(8) (a)(1) Custody Agreement (dated October 30, 1992).
Incorporated by Reference from PEA No. 8, filed July 29, 1993.

(8) (a)(2) Form of First Amendment to Custody Agreement.

(b)(1) Accounting Services Agreement (dated October 1, 1992).
Incorporated by Reference from Amendment No. 1 to Form N-14,
filed February 28, 1997.

(b)(2) Form of First Amendment to Accounting Services Agreement.

(c)(2) Form of First Amendment to Transfer Agent Agreement.

(9) (a) Administrative Agreement. Incorporated by Reference from
Form N-14, filed December 2, 1996.

(b) Form of First Amendment to Administrative Agreement.
(c)(1) Form of Operating Services Agreement for the Balanced Fund,
incorporated by reference from PEA No. 16, filed May 29, 1998.
(c)(2) Form of First Amendment to Operating Services Agreement
for the Balanced Fund.
(d)(1) Form of Operating Services Agreement for the Growth Fund,
incorporated by reference from PEA No. 16, filed May 29, 1998.
(d)(2) Form of First Amendment to Operating Services Agreement
for the Growth Fund.

(10) Opinion of Counsel.

(11) (a) Consents of Independent Auditors.

(b) Power of Attorney. Incorporated by Reference from
PEA No. 7, filed September 23, 1992 and PEA No. 9, filed July
29, 1994.

(12) Not Applicable.

(13) Not Applicable.

(14) Individual Retirement Account. Incorporated by Reference
from PEA No. 8, filed July 29, 1993.

(15) Not Applicable.

(16) Performance Calculation. Incorporated by Reference from
PEA No. 10, filed July 31, 1995.

(17) (a) Financial Data Schedule for Growth Fund.
Incorporated by reference from PEA No. 14, filed June 2, 1997.

(b) Financial Data Schedule for Balanced Fund. Incorporated
by reference from PEA No. 15 filed August 1, 1997.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

On July 15, 1998, there were 488 record holders of the
Growth Fund's shares and 374 record holders of the Balanced
Fund's shares.

ITEM 27. INDEMNIFICATION.

Previously filed on and incorporated by reference from PEA No.
7, filed September 23, 1992.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT
ADVISOR.

CornerCap Investment Counsel (the "Advisor") is the investment
advisor of the Registrant. For information as to the business
profession, vocation or employment of a substantial nature of
the Advisor, its directors and officers, reference is made to
Part B of this Registration Statement and to Form ADV filed
under the Investment Advisers Act of 1940 by the Advisor.

ITEM 29. PRINCIPAL UNDERWRITER.

(a) Attkisson, Carter and Akers, Inc.

(b) Name & Principal Position with Position with
Business Address Underwriter Registrant
- -------------------------------------------------------------------

Ronald L. Attkisson President, Chief None
3060 Peachtree Rd. Executive Officer,
Suite 1475 Director
Atlanta, GA 30305

Belfield H. Carter, Jr. Chairman, None
3060 Peachtree Rd. Director
Suite 1475
Atlanta, GA 30305
<PAGE>
Kristin W. Montet Chief Financial None
3060 Peachtree Rd. Officer
Suite 1475
Atlanta, GA 30305

Mark D. Hill Senior Vice None
3060 Peachtree Rd. President
Suite 1475
Atlanta, GA 30305

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All shareholder account records including share ledgers,
duplicate confirmation, duplicate account statements, and
application forms are maintained by the Registrant's
Transfer Agent, Fortune Fund Administration, Inc., 1389
Peachtree St., NE Suite 180, Atlanta GA 30309. Certain
accounting records of the Registrant are maintained by
Fortune Fund Administration, Inc. in its capacity as
Accounting Services Agent.

Actual portfolio securities and other investment assets
(including cash) are maintained in the custody of the
Registrant's Custodian Bank, Wachovia Bank of North
Carolina, M/C 31013, 301 N. Main Street, Winston-Salem,
North Carolina 27150-3099.

Records relating to the investment of the CornerCap Group of
Funds, including research information, records relating to
the placement of brokerage transactions, memorandum
regarding investment recommendations for supporting and/or
authorizing the purchase or sale of assets, and all other
records of the Registrant required to be maintained pursuant
to Section 31(a) of the 1940 Act, and Rule 31a-1 thereunder
(such records include copies of the Declaration of Trust,
By-Laws, minute books, original copies of all agreements,
compliance records and reports, etc.) are maintained at
CornerCap Investment Counsel, The Peachtree, Suite 1700,
1355 Peachtree St, N.E., Atlanta, Georgia, 30309.

Blue Sky records are originated and maintained by
Commonwealth Shareholder Services, Inc., at 1500 Forest
Avenue, Suite 223, Richmond, Virginia, 23229. Duplicate
copies of Blue Sky records are also maintained at CornerCap
Investment Counsel (address noted above).

ITEM 31. MANAGEMENT SERVICES.

Not applicable.

ITEM 32. UNDERTAKINGS.

The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's
latest applicable annual report to Shareholders, upon
request and without charge.
<PAGE>
SIGNATURE PAGE

Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant
has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in
the City of Atlanta, and the State of Georgia on the 27th day
of July, 1998.

CornerCap Group of Funds, Registrant

BY: /s/ Thomas E. Quinn
Thomas E. Quinn, President

Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the date
indicated below.

/s/ Thomas E. Quinn July 27, 1998
Thomas E. Quinn, Principal Executive Officer,
Principal Accounting Officer, Trustee

Richard L. Boger**
Richard L. Boger, Trustee

G. Harry Durity**
G. Harry Durity, Trustee

Laurin M. McSwain**
Laurin M. McSwain, Trustee

** Made pursuant to a Power of Attorney previously filed.

/s/ Thomas E. Quinn July 27, 1998
Thomas E. Quinn, Attorney in Fact
<PAGE>
EXHIBIT INDEX

EXHIBITS

(1) (a) Declaration of Trust, as supplemented. Incorporated
by Reference from PEA No. 13, filed November 26, 1996.

(2) By-Laws. Incorporated by Reference from PEA No. 13,
filed November 26, 1996.

(3) Not Applicable.

(4) Certificate Specimen. Incorporated by Reference from PEA
No. 7, filed September 23, 1992.

(5) (a) Investment Advisory Agreement for Growth Fund (dated
September 9, 1992). Incorporated by Reference from PEA No. 8,
filed July 29, 1993.

(b) Investment Advisory Agreement for Balanced Fund.
Incorporated by Reference from Form N-14, filed December 2,
1996.

(6) (a) Distribution Agreement (dated March 31, 1995).
Incorporated by Reference from PEA No. 10, filed July 31,1995.

(b) First Amendment to Distribution Agreement.
Incorporated by Reference from N-14, filed December 2, 1996.

(7) Not Applicable.

(8) (a)(1) Custody Agreement (dated October 30, 1992).
Incorporated by Reference from PEA No. 8, filed July 29, 1993.

(8) (a)(2) Form of First Amendment to Custody Agreement.

(b)(1) Accounting Services Agreement (dated October 1, 1992).
Incorporated by Reference from Amendment No. 1 to Form N-14,
filed February 28, 1997.

(b)(2) Form of First Amendment to Accounting Services Agreement.

(c)(2) Form of First Amendment to Transfer Agent Agreement.

(9)(a) Administrative Agreement. Incorporated by Reference from
Form N-14, filed December 2, 1996.

(10) Opinion of Counsel.

(11) (a) Consents of Independent Auditors.

(b) Power of Attorney. Incorporated by Reference from
PEA No. 7, filed September 23, 1992 and PEA No. 9, filed July
29, 1994.

(12) Not Applicable.

(13) Not Applicable.

(14) Individual Retirement Account. Incorporated by Reference
from PEA No. 8, filed July 29, 1993.

(15) Not Applicable.

(16) Performance Calculation. Incorporated by Reference from
PEA No. 10, filed July 31, 1995.

(17) (a) Financial Data Schedule for Growth Fund.
Incorporated by reference from PEA No. 14, filed June 2, 1997.

(b) Financial Data Schedule for Balanced Fund. Incorporated
by reference from PEA No. 15 filed August 1, 1997.

</TABLE>

Exhibit 8(a)(2)

FORM OF
FIRST AMENDMENT TO
CUSTODY AGREEMENT

This First Amendment to the Custody Agreement by and between
The CornerCap Group of Funds (the "Trust") and Wachovia Bank of
North Carolina, N.A. (the "Custodian"), dated as of October 30,
1992 (the "Custody Agreement"), is made as of ______________,
1998.

W I T N E S S E T H:

WHEREAS, the Custodian acts as custodian of the assets of
the Trust pursuant to the Custody Agreement;

NOW, THEREFORE, in consideration of these premises, the
mutual covenants and agreements hereinafter contained and other
good and valuable consideration, the amount and sufficiency of
which are hereby acknowledged, the Trust and the Custodian agree
as follows:

1. FEES AND EXPENSES. Notwithstanding any contrary provision
in the Custody Agreement, CornerCap Investment Counsel, Inc. will
pay any and all fees and reimburse any and all expenses (the
"Fees and Expenses") due and payable to the Custodian by the
Trust under the terms of the Custody Agreement. The Trust is not
responsible for the Fees and Expenses after the date of this
amendment to the Custody Agreement.

2. NO FURTHER AMENDMENTS. Except as amended herein, the
Custody Agreement shall continue in full force and effect
pursuant to its terms.

IN WITNESS WHEREOF, the parties hereto have caused this
First Amendment to the Custody Agreement to be executed by their
duly authorized officers as of the day and year first above
written.

WACHOVIA BANK OF NORTH THE CORNERCAP GROUP OF FUNDS
CAROLINA, N.A.

By:_________________________ By:__________________________
Title:______________________ Title:_______________________

Attest: Attest:

By:_________________________ By:__________________________
Title:______________________ Title:_______________________

ACKNOWLEDGED AND ACCEPTED BY:

CORNERCAP INVESTMENT
COUNSEL, INC.

By:__________________________
Title:_______________________

Exhibit 8(b)(2)

FIRST AMENDMENT TO
ACCOUNTING SERVICES AGREEMENT

This First Amendment to the Accounting Services Agreement by
and between The CornerCap Group of Funds (the "Trust") and
Fortune Fund Administration, Inc. (the "Administrator"), dated as
of December 6, 1996 (the "Accounting Services Agreement"), is
made as of ______________, 1998.

W I T N E S S E T H:

WHEREAS, the Administrator acts as accounting services
provider for the Trust pursuant to the Accounting Services
Agreement;

1. FEES AND EXPENSES. Notwithstanding any contrary provision
in the Accounting Services Agreement, CornerCap Investment
Counsel, Inc. will pay any and all fees and reimburse any and all
expenses (the "Fees and Expenses") due and payable to the
Administrator by the Trust under Section 12 or any other terms of
the Accounting Services Agreement. The Trust is not responsible
for the Fees and Expenses after the date of this amendment to the
Accounting Services Agreement.

2. NO FURTHER AMENDMENTS. Except as amended herein, the
Accounting Services Agreement shall continue in full force and
effect pursuant to its terms.

IN WITNESS WHEREOF, the parties hereto have caused this
First Amendment to the Accounting Services Agreement to be
executed by their duly authorized officers as of the day and year
first above written.

FORTUNE FUND ADMINISTRATION, INC. THE CORNERCAP GROUP OF FUNDS

By:_________________________ By:__________________________
Title:______________________ Title:_______________________

Attest: Attest:

By:_________________________ By:__________________________
Title:______________________ Title:_______________________

ACKNOWLEDGED AND ACCEPTED BY:

CORNERCAP INVESTMENT
COUNSEL, INC.

Exhibit 8(c)(2)

FIRST AMENDMENT TO
TRANSFER AGENT AGREEMENT

This First Amendment to the Transfer Agent Agreement by and
between The CornerCap Group of Funds (the "Fund") and Fortune
Fund Administration, Inc. (the "Transfer Agent"), dated as of
_____________, 1996 (the "Transfer Agent Agreement"), is made as
of ______________, 1998.

W I T N E S S E T H:

WHEREAS, the Transfer Agent acts as transfer agent for the
Fund pursuant to the Transfer Agent Agreement;

1. FEES AND EXPENSES. Notwithstanding any contrary provision
in the Transfer Agent Agreement, CornerCap Investment Counsel,
Inc. will pay any and all fees and reimburse any and all expenses
(the "Fees and Expenses") due and payable to the Transfer Agent
by the Fund under Section 24 and any other terms of the Transfer
Agent Agreement. The Fund is not responsible for the Fees and
Expenses after the date of this amendment to the Transfer Agent
Agreement.

2. NO FURTHER AMENDMENTS. Except as amended herein, the
Transfer Agent Agreement shall continue in full force and effect
pursuant to its terms.

IN WITNESS WHEREOF, the parties hereto have caused this
First Amendment to the Transfer Agent Agreement to be executed by
their duly authorized officers as of the day and year first above
written.

FORTUNE FUND ADMINISTRATION, THE CORNERCAP GROUP OF FUNDS
INC.

By: ________________________ By:__________________________
Title:______________________ Title:_______________________

Attest: Attest:

By:_________________________ By:___________________________
Title:______________________ Title:________________________

ACKNOWLEDGED AND ACCEPTED BY:

CORNERCAP INVESTMENT
COUNSEL, INC.

By:_________________________
Title:______________________

FORM OF
FIRST AMENDMENT TO
ADMINISTRATIVE AGREEMENT

This First Amendment to the Administrative Agreement by and
between The CornerCap Group of Funds (the "Trust") and Fortune
Fund Administration, Inc. (the "Administrator"), dated as of
December 6, 1996 (the "Administrative Agreement"), is made as of
______________, 1998.

W I T N E S S E T H:

WHEREAS, the Administrator acts as distributor and principal
Administrator for the Trust pursuant to the Administrative
Agreement;

1. FEES AND EXPENSES. Notwithstanding any contrary provision
in the Administrative Agreement, CornerCap Investment Counsel,
Inc. will pay any and all fees and reimburse any and all expenses
(the "Fees and Expenses") due and payable to the Administrator by
the Trust under Section 9 and any other terms of the
Administrative Agreement. The Trust is not responsible for the
Fees and Expenses after the date of this amendment to the
Administrative Agreement.

2. NO FURTHER AMENDMENTS. Except as amended herein, the
Administrative Agreement shall continue in full force and effect
pursuant to its terms.

IN WITNESS WHEREOF, the parties hereto have caused this
First Amendment to the Administrative Agreement to be executed by
their duly authorized officers as of the day and year first above
written.

FORTUNE FUND ADMINISTRATION, INC. THE CORNERCAP GROUP OF FUNDS

By:_________________________ By:__________________________
Title:______________________ Title:_______________________

Attest: Attest:

By:_________________________ By:__________________________
Title:______________________ Title:_______________________

ACKNOWLEDGED AND ACCEPTED BY:

CORNERCAP INVESTMENT
COUNSEL, INC.

By:__________________________
Title:_______________________

FIRST AMENDMENT TO
OPERATING SERVICES AGREEMENT

This First Amendment to the Operating Services Agreement
dated April 1, 1998 (the "Agreement") by and between the CornerCap
Balanced Fund of the CornerCap Group of Funds, a Massachusetts
business trust (the "Fund"), and CornerCap Investment Counsel,
Inc., a Georgia corporation (hereinafter referred to as
"Manager") is made and entered into as of the 24th day of July,
1998.

In consideration of the premises and the mutual covenants
hereinafter contained, the Fund and Manager agree to amend the
Agreement as follows:

1. AMENDMENTS REGARDING DISTRIBUTION AND/OR UNDERWRITING
SERVICES

(a) Section 1(a) of the Agreement is hereby amended by
deleting provision 1(a)(5) in its entirety.

(b) Section 1(b) of the Agreement is hereby amended by
the addition of the following new Section 1(b)(5) and the
renumbering of the current Section 1(b)(5) as indicated:

(5) Distribution and/or underwriting services;

(6) Any other extraordinary expense of the Fund
or Portfolio.

2. IMPACT OF AMENDMENTS ON MANAGER. None of the
amendments of the Agreement herein are intended to restrict in
any manner the Manager's ability to use its own funds for the
purposes of distribution and or underwriting services for the
Fund.

IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.

CORNERCAP BALANCED FUND

ATTEST: ___________________ By:______________________
_____________,_____ _____________,________

CORNERCAP INVESTMENT COUNSEL

ATTEST: ____________________ By:______________________

_______,____________ ______________,_______

FIRST AMENDMENT TO
OPERATING SERVICES AGREEMENT

This First Amendment to the Operating Services Agreement
dated April 1, 1998 (the "Agreement") by and between the CornerCap
Growth Fund of the CornerCap Group of Funds, a Massachusetts
business trust (the "Fund"), and CornerCap Investment Counsel,
Inc., a Georgia corporation (hereinafter referred to as
"Manager") is made and entered into as of the 24th day of July,
1998.

In consideration of the premises and the mutual covenants
hereinafter contained, the Fund and Manager agree to amend the
Agreement as follows:

1. AMENDMENTS REGARDING DISTRIBUTION AND/OR UNDERWRITING
SERVICES

(a) Section 1(a) of the Agreement is hereby amended by
deleting provision 1(a)(5) in its entirety.

(b) Section 1(b) of the Agreement is hereby amended by
the addition of the following new Section 1(b)(5) and the
renumbering of the current Section 1(b)(5) to Section 1(b)(6) as
indicated:

(5) Distribution and/or underwriting services;

(6) Any other extraordinary expense of the Fund
or Portfolio.

IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.

CORNERCAP GROWTH FUND

ATTEST: ____________________ By:___________________________

_______,____________ _________________,_________

CORNERCAP INVESTMENT COUNSEL

ATTEST:_____________________ By:___________________________

________,____________ _________________,_________

Attorneys at Law
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555

REINALDO PASCUAL
July 24, 1998
E-mail: [email protected]
Direct Dial: 404.815.6132

Mr. Thomas E. Quinn
President
CornerCap Group of Funds
The Peachtree, Suite 1700
1355 Peachtree Street, N.E.
Atlanta, Georgia 30309

Re: Opinion and Consent Concerning the Balanced Fund and
the Growth Fund of the CornerCap Group of Funds
(Files Nos. 33-3149 and 811-4581)

Ladies and Gentlemen:

We have served as counsel of the CornerCap Group of Funds, a
Massachusetts business trust (the "Trust") registered as an
investment company under the Investment Company Act of 1940, as
amended (File No. 811-4581), with an indefinite number of shares of
beneficial interest designated as shares of the Balanced Fund and
Growth Fund registered for offer and sale (the "Registered Stock")
under the Securities Act of 1933, as amended, pursuant to the
Company's Registration Statement on Form N-1A (No. 33-3149) (the
"Registration Statement").

We have examined and are familiar with originals or copies
(certified or otherwise identified to our satisfaction) of such
documents, corporate records and other instruments relating to the
organization of the Trust and to the authorization and issuance of
the Registered Stock as we have deemed necessary and advisable. Our
opinion is limited to matters arising under the provisions of the
Trust's Declaration of Trust dated January 6, 1986, as supplemented
on April 10, 1986, September 23, 1992 and July 27, 1995, applicable
to the issuance of the Registered Stock by the Company.

In our examination we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals and the
conformity to original documents of all documents submitted to us as
certified or photostatic copies.

As to all factual matters relating to this opinion, we have relied
solely upon, and have assumed the accuracy, completeness and genuineness
of, oral and written representations made to us by officers of the Trust
without making any independent investigation with respect thereto.

Based upon the foregoing and having regard for such legal
considerations as we have deemed relevant, it is our opinion that
the Registered Stock will be, upon issuance thereof against payment
therefor as contemplated in the Registration Statement, legally
issued, fully paid and non-assessable.

This opinion is intended only for your use in connection with
the offering of the Stock and may not be relied upon by any other
person. We hereby consent to the filing of this opinion letter as
an exhibit to the Registration Statement and to the reference to our
firm and the opinions set forth herein in the Registration
Statement.

Very truly yours,

KILPATRICK STOCKTON LLP

By: /s/ Reinaldo Pascual
Reinaldo Pascual, Partner

RP:mr
cc: Mr. Richard T. Bean

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of our report dated May 1, 1998, on
the financial statements and financial highlights of CornerCap
Growth Fund and CornerCap Balanced Fund. Such financial statements
and financial highlights appear in the 1998 Annual Reports to
Shareholders which are incorporated by reference in the Post-Effective
Amendment to the Registration Statement on Form N-1A of CornerCap Group
of Funds. We also consent to the references to our Firm in the Registration
Statement and Prospectus.

/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
July 16, 1998