<PAGE>
Prospectus HSBC
--------------- MID-CAP FUND
June 30, 2000 A SERIES OF REPUBLIC FUNDS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
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REPUBLIC FUNDS TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
RISK/RETURN SUMMARY AND FUND EXPENSES
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Carefully review this 3 Risk/Return Summary and Fund Expenses
important section, which 3 HSBC Mid-Cap Fund
summarizes the Fund's
investments, risks, past
performance, and fees.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
----------------------------------------------------------------------------------------
Preview this section 10 Investment Objectives, Strategies and Risks
for information on
investment strategies
and risks.
FUND MANAGEMENT
----------------------------------------------------------------------------------------
Review this section 13 Fund Management
for details on 13 The Investment Adviser
the people and 13 Portfolio Managers
organizations who provide 13 The Distributor and Administrator
services to the Fund.
SHAREHOLDER INFORMATION
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Review this section for 14 Shareholder Information
details on how 14 Pricing of Fund Shares
shares are valued, 15 Purchasing and Adding to Your Shares
and how to purchase, 18 Selling Your Shares
sell and exchange shares. 22 Distribution Arrangements/Sales Charge
This section also describes 27 Exchanging Your Shares
related charges, and 28 Dividends, Distributions and Taxes
payments of dividends
and distributions.
</TABLE>
2
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
The following is a summary of certain key information about the HSBC Mid-Cap
Fund. You will find additional information about the Fund, including a detailed
description of the risks of an investment in the Fund, after this summary.
<TABLE>
<S> <C>
HSBC MID-CAP FUND
INVESTMENT OBJECTIVES The Fund's investment objective is to
achieve a higher rate of return than that
generated by the S&P 400.
PRINCIPAL The Fund seeks to achieve its objective by
INVESTMENT STRATEGIES investing in common or preferred stocks
and convertible securities. The Fund
normally invests at least 65% of its total
assets in equity securities of mid-sized
companies with market capitalization
falling within the range of the S&P 400
Index (currently between $173 million and
$11.737 billion as of May 31, 2000) at
the time of acquisition. Investments are
primarily in domestic common stocks but
also may include, to a limited degree,
preferred stocks, and convertible
securities. The Fund's Adviser selects
stocks that have attractive valuation, the
potential for future earnings growth and
in the Adviser's opinion are likely to
outperform the S&P 400. In selecting
securities the Adviser uses quantitative
research (e.g., analyzing analyst reports,
sales growth, earnings acceleration, debt
levels, and market capitalization) and
fundamental research (e.g., analyzing
factors such as whether a company is a
leader in its market, the sector outlook,
and the quality of the management) to
identify stocks meeting its criteria in an
effort to outperform the S&P 400.
Investments will be sold if they no longer
meet the Fund's criteria for investment.
</TABLE>
3
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
<TABLE>
<S> <C>
PRINCIPAL The principal risks of investing in the
INVESTMENT RISKS Fund are: capitalization risk; management
risk; market risk; and security-specific
risk.
Capitalization Risk: Investments in mid-
capitalization companies involve greater
risk than is customarily associated with
larger more established companies due to
the greater business risks of small size,
limited markets and financial resources,
narrow product lines and frequent lack of
depth of management.
Management Risk: Risk that the strategy
used by the investment management team may
fail to produce the desired results.
Market Risk: Risk that the value of the
Fund's investments will uctuate as the
stock market uctuates and that stock
prices overall may decline over short or
longer-term periods.
Security-Specific Risk: Risk that the
issuer will be unable to achieve its
earnings or growth expectations.
ADDITIONALLY, THERE IS THE RISK THAT
STOCKS SELECTED BECAUSE THEY REPRESENT
VALUE WILL REMAIN UNDERVALUED OR
OUT-OF-FAVOR. OTHER IMPORTANT THINGS FOR
YOU TO NOTE:
You may lose money by investing in the
Fund.
Because the value of the Fund's
investments will uctuate with market
conditions, so will the value of your
investment in the Fund.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT
OF HSBC BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
</TABLE>
4
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
<TABLE>
<S> <C>
WHO MAY WANT TO INVEST? Consider investing in the Fund if you are:
Seeking a long-term goal such as
retirement
Looking to add a mid-cap growth component
to your portfolio
Willing to accept higher risks of
investing in the stock market
This Fund will not be appropriate for
anyone:
Seeking monthly income
Pursuing a short-term goal or investing
emergency reserves
Seeking safety of principal
</TABLE>
5
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
The bar chart on this page shows the HSBC Mid-Cap Fund's annual returns for
Class A Shares and how its performance has varied from year to year. The bar
chart assumes reinvestment of dividends and distributions, but does not re ect
sale charges. If sale charges were re ected, returns would be less than those
shown.
The returns for Class B Shares and Class C Shares will typically be lower, and
the returns for the Trust Shares will typically be higher, than the returns for
the Class A Shares shown in the bar chart because of differences in expenses of
each class.
PERFORMANCE BAR
CHART AND TABLE
[CHART]
YEAR-BY-YEAR
TOTAL RETURNS
AS OF 12/31/99(1)
FOR CLASS A
SHARES
1994.................................... 18.04%
1995.................................... 23.50%
1996.................................... 21.82%
1997.................................... 24.34%
1998.................................... 21.77%
1999.................................... 37.06%
Of course, past performance does not indicate how the
Fund will perform in the future.
<TABLE>
<S> <C>
Best quarter: 4Q 1999 +21.90%
Worst quarter: 3Q 1998 -22.61%
</TABLE>
1. The Fund commenced operations on June 30, 2000 upon the transfer to the Fund
of assets held in a collective investment trust (the 'CTF') maintained by
HSBC Bank USA, for which HSBC Asset Management (Americas) Inc. (HSBC) has
provided day-to-day portfolio management. The CTF had substantially the same
investment objective, policies, and limitations as the Fund. Assets from the
CTF were transferred to the Fund.
The Fund calculates its performance for periods commencing prior to June 30,
2000 by including the CTF's total return, adjusted to re ect the deduction of
fees and expenses applicable to the Fund as stated in the Fee Table in this
Prospectus (that is, adjusted to re ect estimated expenses, including the
Fund's pro rata share of the aggregate annual operating expenses including
12b-1 fees).
The CTF was not registered with the SEC and thus was not subject to certain
investment restrictions that are imposed on the Fund. If the CTF had been
registered with the SEC, its performance might have been adversely affected.
6
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
The table below compares the Fund's performance(1) over time to that of the S&P
MidCap 400 Index. The Standard & Poor's MidCap 400 Index is a
capitalization-weighted index that measures the performance of the mid-range
sector of the US stock market.
The table assumes reinvestment of dividends and distributions, and includes
applicable sales charges.
---------------------------
<TABLE>
<CAPTION>
INCEPTION PAST FIVE SINCE
DATE(2) YEAR YEAR INCEPTION
<S> <C> <C> <C> <C>
CLASS A July 1, 1993 37.06% 23.50% 17.52%
CLASS B (WITH APPLICABLE CDSC) July 1, 1993 36.07% 22.59% 16.65%
CLASS C (WITH APPLICABLE CDSC) July 1, 1993 36.07% 22.59% 16.65%
TRUST SHARES July 1, 1993 37.33% 23.74% 17.75%
S&P MIDCAP 400 INDEX(3) 14.72% 23.05% 17.98%
</TABLE>
1. The Fund commenced operations on June 30, 2000 upon the transfer to the Fund
of assets held in a collective investment trust (the 'CTF') maintained by
HSBC Bank USA, for which HSBC Asset Management (Americas) Inc. (HSBC) has
provided day-to-day portfolio management. The CTF had substantially the same
investment objective, policies, and limitations as the Fund. Assets from the
CTF were transferred to the Fund.
The Fund calculates its performance for periods commencing prior to June 30,
2000 by including the CTF's total return, adjusted to re ect the deduction of
fees and expenses applicable to the Fund as stated in the Fee Table in this
Prospectus (that is, adjusted to re ect estimated expenses, including the
Fund's pro rata share of the aggregate annual operating expenses including
12b-1 fees).
The CTF was not registered with the SEC and thus was not subject to certain
investment restrictions that are imposed on the Fund. If the CTF had been
registered with the SEC, its performance might have been adversely affected.
2. Prior to July 1, 1993, the collective investment trust had a different
investment objective and, therefore the performance information for that time
period is not included.
3. The Standard & Poor's MidCap 400 Index is an unmanaged index containing
stocks of 400 industrial, transportation, utility, and financial companies,
regarded as generally representative of the mid-size company segment of the
U.S. market. The Index re ects income and distributions, if any, but does not
re ect brokerage commissions, or other expenses of investing.
7
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
FEES AND EXPENSES
As an investor in the Fund, you will pay the following fees and expenses.
Shareholder transactions fees are paid from your account. Annual operating
expenses are paid out of Fund assets, and are reflected in the share price.
Some share classes impose a back end sales charge (load) if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge.
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
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<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR TRUST
INVESTMENT) A SHARES B SHARES C SHARES SHARES
<S> <C> <C> <C> <C>
Maximum sales charge (load) on
purchases 5.00% None None None
Maximum deferred sales charge (load) None 4.00% 1.00% None
--------------------------------------------------------------------------------
<CAPTION>
ANNUAL FUND
OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED TRUST
FROM FUND ASSETS) A SHARES B SHARES C SHARES SHARES
<S> <C> <C> <C> <C>
Management fee 0.55% 0.55% 0.55% 0.55%
Distribution (12b-1) fee 0.00%+ 0.75% 0.75% 0.00%
Shareholder servicing fee 0.25% 0.25% 0.25% 0.00%
Other operating expenses 0.35% 0.35% 0.35% 0.35%
Total other expenses: 0.00% 0.00% 0.00% 0.00%
Total Fund operating expenses 1.15% 1.90% 1.90% 0.90%
</TABLE>
+ There is a 12b-1 plan for Class A shares, which authorizes payments up to .25%
of the Fund's asset. To date, no payments under the 12b-1 plan have been made.
8
<PAGE>
HSBC MID-CAP FUND
RISK/RETURN SUMMARY AND FUND EXPENSES [LOGO]
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumed that your investment has a 5% return each year the Fund's
operating expenses remain the same and the reinvestment of any dividends and
distributions. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
EXPENSE EXAMPLE
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C>
CLASS A SHARES $611 $847 $1,101 $1,828
CLASS B SHARES
ASSUMING
REDEMPTION $593 $797 $1,026 $1,848
ASSUMING NO
REDEMPTION $193 $597 $1,026 $1,848
CLASS C SHARES
ASSUMING
REDEMPTION $293 $597 $1,026 $2,222
ASSUMING NO
REDEMPTION $193 $597 $1,026 $2,222
TRUST SHARES $ 92 $287 $ 498 $1,108
</TABLE>
9
<PAGE>
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS [LOGO]
HSBC MID-CAP FUND
INVESTMENT OBJECTIVES, STRATEGIES AND RISK
This section of the Prospectus provides a more complete description of the
principal investment objectives and policies of the Fund. Of course, there can
be no assurance that the Fund will achieve its investment objective. Additional
descriptions of the Fund's risks, strategies, and investments, as well as other
strategies and investments not described below, may be found in the Fund's
Statement of Additional Information or SAI.
INVESTMENT OBJECTIVE, POLICIES AND STRATEGY
The Fund's investment objective is to achieve a higher rate of return than that
generated by the S&P 400. The Fund seeks to achieve its objectives by investing
in common stock, preferred stocks and convertible securities. Under normal
conditions the Fund will invest at least 65% of its total assets in equity
securities of mid-sized companies with market capitalizations falling within the
S&P 400 Index (currently between $173 million and $11.737 billion as of May 31,
2000) at the time of acquisition.
The Adviser uses quantitative and fundamental research to select stocks for the
Fund's portfolio that the Adviser believes offer attractive growth opportunities
and are selling at reasonable prices. The Adviser pursues this strategy by first
considering fundamental factors such as book value, cash ow, earnings, and
sales. The Adviser's quantitative analysis also includes in-depth analysis of a
company's financial statements. Once a company passes this quantitative
screening process, the Adviser utilizes a more traditional qualitative approach.
This analysis considers factors such as liquidity, use of leverage, management
strength, and the company's ability to execute its business plan. The Fund
expects to invest primarily in securities of U.S.-based companies, but it may
also invest, to a limited degree, in securities of non-U.S. companies, generally
through ADRs. The Adviser will consider selling those securities which no longer
meet the Fund's criteria for investing. The Fund has authority to invest up to
100% of its total assets in a variety of short-term debt securities (e.g., money
market instruments, certificates of deposit, bankers acceptance, commercial
paper) for temporary defensive purposes under unusual market conditions. While
the Fund is invested in these instruments, it will not be pursuing its
investment objective.
The Fund's criteria for selecting equity securities are the issuer's managerial
strength (e.g., the quality and experience of management), competitive position,
price to earnings ratio, profitability, prospects for growth, underlying asset
value and relative market value (e.g., relative to market and historical
levels). The Fund's Adviser uses quantitative and fundamental research to
identify stocks meeting either or both growth and income criteria and selects
securities for the
10
<PAGE>
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS [LOGO]
portfolio that appear to be undervalued. The Fund may invest in securities that
appear to be undervalued because the value or potential for growth has been
overlooked by many investors or because recent changes in the economy, industry
or the company have not yet been re ected in the price of the securities. In
order to increase the Fund's portfolio income, the Fund may invest in securities
that provide current dividends or, in the opinion of the Adviser, have a
potential for dividend growth in the future. Investments will be sold if they no
longer meet the Fund's criteria for investment.
RISK CONSIDERATIONS
The principal risks of investing in the Fund are capitalization risk, market
risk, security specific risk and management risk. Capitalization risk is the
risk customarily associated with investments in smaller capitalization companies
due to limited markets and financial resources, narrow product lines and
frequent lack of depth of management. Stocks of smaller companies may trade
infrequently or in lower volumes, making it difficult for the Fund to sell its
shares at the desired price. Smaller companies may be more sensitive to changes
in the economy overall. Historically, small company stocks have been more
volatile than those of larger companies. As a result, the Fund's net asset value
may be subject to rapid and substantial changes. Market risk is the possibility
that the Fund's net asset value will decline with changes in the market value of
the Fund's portfolio securities. The Fund's investments represent proportionate
interests in the issuing companies. Therefore, the Fund participates in the
success or failure of any company in which it holds stock. The market value of
common stock can uctuate significantly, re ecting the business performance of
the issuing company, investor perception and general economic or financial
market movements. There is also the risk that the issuer will be unable to
achieve its earnings or growth expectations or that the strategy used by the
investment management team may fail to produce the desired results.
OTHER CONSIDERATIONS
EXPOSURE TO TECHNOLOGY-RELATED RISK. The mid-cap sector of the stock market
includes a significant number of companies the securities of which may be
characterized as technology or technology-related investments. While the Fund
does not as matter of investment strategy seek to invest disproportionately in
such securities, the value of the Fund's investments may be impacted by
developments affecting technology and technology-related stocks generally.
PORTFOLIO TURNOVER. The Fund is actively managed and, in some cases the Fund's
portfolio turnover, may exceed 100%. A higher rate of portfolio turnover
increases brokerage and other expenses, which must be borne by the Fund and its
shareholders and may result in a lower net asset value. High portfolio turnover
(over 100%) also may result in the realization of substantial net short-term
capital gains, which when distributed are taxable to shareholders.
11
<PAGE>
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS [LOGO]
The trading costs and tax effects associated with turnover may adversely affect
the Fund's performance.
TEMPORARY DEFENSIVE POSITIONS. In order to meet liquidity needs or for temporary
defensive purposes, the Fund may invest up to 100% of its assets in fixed income
securities, money market securities, certificates of deposit, bankers'
acceptances, commercial paper or in equity securities which, in the Adviser's
opinion, are more conservative than the types of securities that the Fund
typically invests in. To the extent the Fund is engaged in temporary or
defensive investments, the Fund will not be pursuing its investment objective.
12
<PAGE>
FUND MANAGEMENT [LOGO]
THE INVESTMENT ADVISER
HSBC Asset Management (Americas) Inc. (HSBC or the 'Adviser'), 140 Broadway, New
York, NY 10005 is the adviser for the Fund. HSBC manages more than $6.1 billion
of assets of individuals, pension plans, corporations and institutions. Through
its portfolio management team, HSBC makes the day-to-day investment decisions
and continuously reviews, supervises and administers the Fund's investment
programs. For these advisory services, the Fund will pay the Adviser 0.55% based
on the Funds average net assets.
PORTFOLIO MANAGERS
The HSBC Asset Management (Americas) Inc. US Equities team is led by Mr. Fredric
Lutcher III, CFA, Chief Investment Officer, U.S. Equities. Mr. Thomas D'Auria,
CFA, Portfolio Manager is responsible for the day-to-day management of the
Mid-Cap Fund. Prior to joining the Adviser in late 1997, Mr. D'Auria worked as
Vice President and Senior Fund Analyst at Merrill Lynch Asset Management for
four years. The U.S. Equity team consists of 12 analysts, managers and dealers
who provide investment support for the fund.
THE DISTRIBUTOR AND ADMINISTRATOR
BISYS Fund Services ('BISYS'), whose address is 3435 Stelzer Road, Columbus,
Ohio 43219-3035, serves as the Fund's administrator. Management and
administrative services of BISYS include providing office space, equipment and
clerical personnel to the Funds and supervising custodial, auditing, valuation,
bookkeeping, legal and dividend dispersing services.
BISYS also serves as the distributor of Fund shares. BISYS may provide financial
assistance in connection with pre-approved seminars, conferences and advertising
to the extent permitted by applicable state or self-regulatory agencies, such as
the National Association of Securities Dealers.
The Statement of Additional Information has more detailed information about the
Investment Adviser and other service providers.
13
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
PRICING OF FUND SHARES
------------------------
HOW NAV IS CALCULATED
The NAV for each class of shares is calculated by dividing the total value of a
Fund's investments and other assets attributable to a class, less any
liabilities, by the total number of outstanding shares of that class:
------------------------
NAV =
Total Assets - Liabilities
Number of Shares
Outstanding
------------------------
The net asset value per share (NAV) is determined once each day at the close of
regular trading on the New York Stock Exchange, normally at 4 p.m. Eastern time
on days the Exchange is open.
The New York Stock Exchange is open every weekday except for the days on which
national holidays are observed.
Your order for purchase, sale or exchange of shares is priced at the next NAV
calculated after your order is accepted by the Fund plus any applicable sales
charge. If you sell Class B Shares or Class C Shares, a contingent deferred
sales load may apply, which would reduce the amount of money paid to you by the
Fund. For more information about sales charges, see the section on 'Distribution
Arrangements/Sales Charges.'
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PURCHASING AND ADDING TO YOUR SHARES
You may purchase the shares of the Fund through the Republic Funds Distributor
or through banks, brokers and other investment representatives, which may
charge additional fees and may require higher minimum investments or impose
other limitations on buying and selling shares. If you purchase shares through
an investment representative, that party is responsible for transmitting
orders by close of business and may have an earlier cut-off time for purchase
and sale requests. Consult your investment representative or institution for
specific information.
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14
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
PURCHASING AND ADDING TO YOUR SHARES
All purchases must be in
U.S. dollars. A fee will be
charged for any checks that
do not clear. Third-party
checks are not accepted.
The Fund may waive its
minimum purchase
requirement, and the
Distributor may reject a
purchase order if the
Distributor considers
it in the best
interest of the Fund and its
shareholders.
Class B Shares and Class C Shares of the Fund are not offered for sale but are
only offered as an exchange option for Class B and Class C Shareholders of the
Trust's other investment portfolios.
<TABLE>
--------------------------
MINIMUM
INITIAL MINIMUM
ACCOUNT TYPE INVESTMENT SUBSEQUENT
<S> <C> <C>
CLASS A
Regular
(non-retirement) $ 1,000 $ 100
Retirement (IRA) $ 250 $ 100
Automatic Investment Plan $ 250 $ 25
TRUST SHARES* $1,000,000 $ N/A
* HSBC clients that
maintain an investment
management account are
not subject to the
minimum initial
investment requirements.
</TABLE>
AVOID 31% TAX WITHHOLDING
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided the
Fund with their certified taxpayer identification number in compliance with IRS
rules, or if you have been notified by the IRS that you are subject to backup
withholding. Backup withholding is not an additional tax; rather, it is a way
in which the IRS ensures it will collect taxes otherwise due. Any amounts
withheld may be credited against your U.S. federal income tax liability. To
avoid tax withholding, make sure you provide your correct Tax Identification
Number (Social Security Number for most investors) on your account application.
-----------------------------------------------------------------------
15
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
PURCHASING AND ADDING TO YOUR SHARES
CONTINUED
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT
BY REGULAR MAIL OR BY OVERNIGHT SERVICE
Initial Investment:
If purchasing through your financial advisor or brokerage account, simply tell
your advisor or broker that you wish to purchase shares of the Fund and he or
she will take care of the necessary documentation. For all other purchases,
follow the instructions below.
1. Carefully read, complete, and sign the account application. Establishing your
account privileges now saves you the inconvenience of having to add them
later.
2. Make check, bank draft or money order payable to 'Republic Funds' and include
the name of the appropriate Fund(s) on the check.
Mail to: Republic Funds, PO Box 182845, Columbus, Ohio 43218-2845.
Subsequent:
1. Use the investment slip attached to your account statement.
Or, if unavailable,
2. Include the following information in writing:
Fund name
Share class
Amount invested
Account name
Account number
Include your account number on your check.
3. Mail investment slip and check to: Republic Funds, PO Box 182845, Columbus,
Ohio 43218-2845.
<TABLE>
<S> <C>
ELECTRONIC VS. WIRE TRANSFER
Wire transfers allow financial
institutions to send funds to
each other, almost
instantaneously. With an
electronic purchase or sale, the
transaction is made through the
Automated Clearing House (ACH)
and may take up to eight days to
clear. There is generally no fee
for ACH transactions.
</TABLE>
ELECTRONIC PURCHASES
Your bank must participate in the Automated Clearing House (ACH) and must be a
United States Bank. Your bank or broker may charge for this service.
Establish electronic purchase option on your account application or call
1-800-782-8183. Your account can generally be set up for electronic purchases
within 15 days.
Call 1-800-782-8183 to arrange a transfer from your bank account.
16
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
PURCHASING AND ADDING TO YOUR SHARES
CONTINUED
BY WIRE TRANSFER
For information on how to request a wire transfer, call 1-800-782-8183.
AUTOMATIC INVESTMENT PLAN
You can make automatic investments in the Fund from your bank account, through
payroll deduction or from your federal employment, Social Security or other
regular government checks. Automatic investments can be as little as $25, once
you've invested the $250 minimum required to open the account.
To invest regularly from your bank account:
Complete the Automatic Investment Plan portion on your Account Application.
Make sure you note:
[ ] Your bank name, address and account number
[ ] The amount you wish to invest automatically (minimum $25)
[ ] How often you want to invest (every month, 4 times a year, twice a year or
once a year)
[ ] Attach a voided personal check.
To invest regularly from your paycheck or government check:
Call 1-800-782-8183 for an enrollment form.
<TABLE>
<S> <C>
DIRECTED DIVIDEND OPTION
By selecting the appropriate box in
the Account Application, you can
elect to receive your distributions
in cash (check) or have
distributions (capital gains and
dividends) reinvested in another
Republic Fund without a sales
charge. You must maintain the
minimum balance in each Fund into
which you plan to reinvest dividends
or the reinvestment will be
suspended and your dividends paid to
you. The Fund may modify or
terminate this reinvestment option
without notice. You can change or
terminate your participation in the
reinvestment option at any time by
calling 1-800-782-8183.
</TABLE>
DIVIDENDS AND DISTRIBUTIONS
All dividends and distributions will be automatically reinvested unless you
request otherwise. There are no sales charges for reinvested distributions.
Dividends are higher for Class A Shares than for Class B and Class C Shares,
because Class A Shares have lower operating expenses. Trust Shares receive the
highest dividends because they have the lowest operating expenses. Capital gains
are distributed at least annually.
Distributions are made on a per share basis regardless of how long you've owned
your shares. Therefore, if you invest shortly before the distribution date, some
of your investment will be returned to you in the form of a distribution, which
may be taxable.
----------------------------------------------------------------------
17
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
SELLING YOUR SHARES
You may sell your shares at any
time. Your sales price will be
the next NAV after your sell
order is received by the Fund,
its transfer agent, or your
investment representative.
Normally you will receive your
proceeds within a week after
your request is received. See
section on 'Selling Your
Shares' below.
<TABLE>
<S> <C>
--------------------------------------
WITHDRAWING MONEY FROM YOUR FUND
INVESTMENT
As a mutual fund shareholder, you are
technically selling shares when you
request a withdrawal in cash. This is
also known as redeeming shares or a
redemption of shares.
CONTINGENT DEFERRED SALES CHARGE
When you sell Class B or C shares,
you will be charged a fee for any
shares that have not been held for a
sufficient length of time. These fees
will be deducted from the money paid
to you. See the sections on
'Distribution Arrangements/Sales
Charges' and 'Exchanging your Shares'
for details.
------------------------------------
</TABLE>
INSTRUCTIONS FOR SELLING YOUR SHARES
If selling your shares through your financial adviser or broker, ask him or her
for redemption procedures. Your adviser and/or broker may have transaction
minimums and/or transaction times that will affect your redemption. For all
other sales transactions, follow the instructions below.
BY TELEPHONE
(unless you have declined telephone sales privileges)
1. Call 1-800-782-8183 with instructions as to how you wish to receive your
funds (mail, wire, electronic transfer). (See 'Selling Your Shares --
Verifying Telephone Redemptions')
BY MAIL OR OVERNIGHT SERVICE
(See 'Selling Your Shares -- Redemptions in Writing Required')
1. Call 1-800-782-8183 to request redemption forms or write a letter of
instruction indicating:
your Fund and account number
amount you wish to redeem
address where your check should be sent
account owner signature
2. Mail to: Republic Funds, PO Box 182845, Columbus, Ohio 43218-2845.
18
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
SELLING YOUR SHARES
CONTINUED
WIRE TRANSFER
You must indicate this option on your account application.
Call 1-800-782-8183 to request a wire transfer.
If you call by 12:00 p.m. Eastern time, your payment will normally be wired to
your bank on the same business day. If you call by 4 p.m. Eastern time, your
payment will normally be wired to your bank on the next business day. Otherwise,
it will normally be wired on the second business day after your call.
The Fund may charge a wire transfer fee.
Note: Your financial institution may also charge a separate fee.
ELECTRONIC REDEMPTIONS
Call 1-800-782-8183 to request an electronic redemption.
Your bank must participate in the Automated Clearing House (ACH) and must be a
U.S. bank.
If you call by 12:00 p.m. Eastern time, the NAV of your shares will normally be
determined on the same day and the proceeds credited within 7 days.
Your bank may charge for this service.
SYSTEMATIC WITHDRAWAL PLAN
You can receive automatic payments from your account on a monthly, quarterly,
semi-annual or annual basis. The minimum withdrawal is $50. To activate this
feature:
Make sure you've checked the appropriate box on the Account Application,
or call 1-800-782-8183.
Include a voided personal check.
Your account must have a value of $10,000 or more to start withdrawals.
If the value of your account falls below $1,000, you may be asked to add
sufficient funds to bring the account back to $1,000, or the Fund may
close your account and mail the proceeds to you.
19
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
SELLING YOUR SHARES
CONTINUED
REDEMPTIONS IN WRITING REQUIRED
You must request redemption in writing in the following situations:
1. Redemptions from Individual Retirement Accounts ('IRAs').
2. Redemption requests requiring a signature guarantee, which include any of the
following:
Redemptions over $10,000;
Your account registration or the name(s) on your account has changed
within the last 15 days;
The check is not being mailed to the address on your account;
The check is not being made payable to the owner of the account; or
The redemption proceeds are being transferred to another Fund account with
a different registration.
You must obtain a signature guarantee from members of the STAMP (Securities
Transfer Agents Medallion Program), MSP (New York Stock Exchange Signature
Program) or SEMP (Stock Exchanges Medallion Program). Members are subject to
dollar limitations that must be considered when requesting their guarantee. The
Transfer Agent may reject any signature guarantee if it believes the transaction
would otherwise be improper.
VERIFYING TELEPHONE REDEMPTIONS
The Fund makes every effort to insure that telephone redemptions are only made
by authorized shareholders. All telephone calls are recorded for your protection
and you will be asked for information to verify your identity. Given these
precautions, unless you have specifically indicated on your application that you
do not want the telephone redemption feature, you may be responsible for any
fraudulent telephone orders. If appropriate precautions have not been taken, the
Transfer Agent may be liable for losses due to unauthorized transactions.
REDEMPTIONS WITHIN 15 DAYS OF INITIAL INVESTMENT
When you have made your initial investment by check, you cannot redeem any
portion of it until the Transfer Agent is satisfied that the check has cleared
(which may require up to 15 business days). You can avoid this delay by
purchasing shares with a certified check.
20
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
SELLING YOUR SHARES
CONTINUED
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the SEC in order to protect remaining shareholders.
CLOSING OF SMALL ACCOUNTS
If your account falls below $50 due to redemptions, the Fund may ask you to
increase your balance. If it is still below $50 after 30 days, the Fund may
close your account and send you the proceeds at the current NAV.
UNDELIVERABLE REDEMPTION CHECKS
For any shareholder who chooses to receive distributions in cash, if
distribution checks (1) are returned and marked as 'undeliverable' or (2) remain
uncashed for six months, your account will be changed automatically so that all
future distributions are reinvested in your account. Checks that remain uncashed
for six months will be canceled and the money reinvested in the Fund.
21
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DISTRIBUTION ARRANGEMENTS/SALES CHARGE
This section describes the sales charges and fees you will pay as an investor in
different share classes offered by the Fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C TRUST SHARES
<S> <C> <C> <C> <C> <C>
SALES CHARGE
(LOAD) Front-end sales charge; reduced No front-end No front-end No front-end
sales charges available. sales charge. A sales charge. A sales.
contingent contingent
deferred sales deferred sales
charge (CDSC) may charge (CDSC) may
be imposed on be imposed on
shares redeemed shares redeemed
within four years within one year
after purchase; after purchase.
shares
automatically
convert to
Class A shares
after 6 years.
<CAPTION>
SALES SALES
CHARGE AS CHARGE AS
A % OF A % OF
OFFERING YOUR
YOUR INVESTMENT PRICE INVESTMENT
--------------- ----- ----------
<S> <C> <C> <C> <C> <C>
Up to $49,999 5.00% 5.26%
$50,000 up to $99,999 4.50% 4.71%
$100,000 up to $249,999 3.75% 3.90%
$250,000 up to $499,999 2.50% 2.56%
$500,000 up to $999,999 2.00% 2.04%
$1,000,000 and above 1.00% 1.01%
DISTRIBUTION (12b-1) Subject to combined Subject to Subject to No distribution
FEE AND SERVICE FEES annual distribution and combined annual combined annual or services fees.
shareholder servicing distribution and distribution and
fees of up to .25% shareholder shareholder
annually of the Fund's servicing fees of servicing fees of
total average daily net up to 1.00% up to 1.00%
assets. annually of the annually of the
Fund's average Fund's average
daily net assets. daily net assets.
FUND EXPENSES Lower annual expenses Higher annual Higher annual Lower expenses
than Class B, Class C expenses than expenses than than Class A, B
or Trust shares Class A or Trust Class A or Trust or C shares.
shares. shares.
</TABLE>
CLASS B SHARES AND CLASS C SHARES
Although Class B Shares and Class C Shares are not subject to a sales charge
when a shareholder exchanges Class B Shares and Class C Shares of another Trust
portfolio, they may be subject to a contingent deferred sales charge (CDSC) when
redeemed. See 'Exchanging Your Shares.' In addition, Class B and Class C Shares
are subject to an aggregate annual distribution and shareholder servicing fees
of up to 1.00% of the Fund's assets. Shareholders of Class B Shares and Class
C Shares pay higher annual expenses than shareholders of Class A Shares and
Trust Shares.
22
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
DISTRIBUTION (12b-1) AND SHAREHOLDER SERVICE FEES
The Fund has adopted Distribution ('12b-1') plans for Class A, Class B, and
Class C Shares. 12b-1 fees compensate the Distributor and other dealers and
investment representatives for services and expenses relating to the sale and
distribution of the Funds' shares and/or for providing shareholder services.
12b-1 fees are paid from Fund assets on an ongoing basis, and will decrease the
return on your investment.
The 12b-1 fees vary by share class as follows:
Class A Shares may pay a 12b-1 fee of up to 0.25% of the average daily net
assets of the applicable Fund.
Class B and Class C Shares pay a 12b-1 fee of up to 0.75% of the average daily
net assets of the applicable Fund. This will cause expenses for Class B and
Class C Shares to be higher and dividends to be lower than for Class A Shares
and Trust Shares.
Trust Shares do not pay a 12b-1 fee.
The higher 12b-1 fees on Class B and Class C Shares, together with the CDSC,
help the Distributor sell Class B and Class C Shares without an 'up-front' sales
charge. In particular, these fees help to defray the Distributor's costs of
advancing brokerage commissions to investment representatives.
In addition to the 12b-1 fees, Class A Shares are subject to a shareholder
servicing fee of up to 0.25%. Class B and Class C Shares are subject to a
shareholder servicing fee of up to 1.00%.
The aggregate of the 12b-1 fees and shareholder servicing fees will not exceed
0.25% for the Class A Shares, and 1.00% for the Class B and Class C Shares.
Long-term Class B and Class C shareholders may pay indirectly more than the
equivalent of the maximum permitted front-end sales charge due to the recurring
nature of 12b-1 distribution and service fees.
23
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
CLASS A SHARES
WAIVER OF SALES CHARGES FOR CLASS A SHARES
The following qualify for waivers of sales charges:
Shares purchased by investment representatives through fee-based investment
products or accounts.
Proceeds from redemptions from another mutual fund complex within 60 days
after redemption, if you paid a front-end sales charge for those shares.
Reinvestment of distributions from a deferred compensation plan, agency,
trust, or custody account that was maintained by the investment advisers or
their affiliates or invested in any of the Funds.
Shares purchased for trust or other advisory accounts established with the
investment advisers or their affiliates.
Shares purchased by directors, trustees, employees, and family members of the
investment advisers and their affiliates and any organization that provides
services to the Funds; retired Fund trustees; dealers who have an agreement
with the Distributor; and any trade organization to which the investment
advisers or the Administrator belongs.
SALES CHARGE REDUCTIONS
Reduced sales charges for Class A shares are available to shareholders with
investments of $50,000 or more. In addition, you may qualify for reduced sales
charges under the following circumstances.
Letter of Intent. You inform the Fund in writing that you intend to purchase
enough shares over a 13-month period to qualify for a reduced sales charge.
You must include a minimum of 5% of the total amount you intend to purchase
with your letter of intent.
Rights of Accumulation. When the value of shares you already own plus the
amount you intend to invest reaches the amount needed to qualify for reduced
sales charges, your added investment will qualify for the reduced sales
charge.
Combination Privilege. You can combine accounts of multiple Funds (excluding
the Money Market Funds) or accounts of immediate family household members
(spouse and children under 21) to achieve reduced sales charges.
24
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
CLASS B SHARES
Class B Shares of the Fund may be purchased for individual accounts only in
amounts of less than $500,000. There is no sales charge imposed upon purchases
of Class B Shares, but investors may be subject to a contingent deferred sales
charge ('CDSC').
The Fund's Class B Shares will be subject to a declining CDSC if they are
redeemed within four years after purchase. In such cases, the CDSC will be as
illustrated in the chart below.
<TABLE>
<CAPTION>
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
-------------------- ------------------------
<S> <C>
0-1...................................... 4.00%
1-2...................................... 3.00%
2-3...................................... 2.00%
3-4...................................... 1.00%
MORE THAN 4.............................. NONE
</TABLE>
The CDSC will be based upon the lower of the NAV at the time of purchase or the
NAV at the time of redemption. There is no CDSC on reinvested dividends or
distributions.
If you sell some but not all of your Class B Shares, shares not subject to the
CDSC (i.e., shares purchased with reinvested dividends) will be redeemed first,
followed by shares subject to the lowest CDSC (typically shares held for the
longest time).
25
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
CONTINUED
CONVERSION FEATURE -- CLASS B SHARES
Class B Shares will convert automatically to Class A Shares of the same Fund six
years from the beginning of the calendar month in which the Class B Shares were
originally purchased.
After conversion, your shares will be subject to the lower distribution and
shareholder servicing fees charged on Class A Shares which will increase your
investment return compared to the Class B Shares.
You will not pay any sales charge or fees when your shares convert, nor will the
transaction be subject to any tax.
If you purchased Class B Shares of one Fund which you exchanged for Class B
Shares of another Fund, your holding period will be calculated from the time of
your original purchase of Class B Shares. The dollar value of Class A Shares you
receive will equal the dollar value of the Class B shares converted.
CLASS C SHARES
Class C Shares of the Fund may be purchased for individual accounts normally in
amounts of less than $500,000. There is no sales charge imposed upon purchases
of Class C Shares, but investors may be subject to a CDSC. Specifically, if you
redeem Class C Shares of the Fund, your redemption may be subject to a 1.00%
CDSC if the shares are redeemed less than one year after the original purchase
of the Class C Shares. The CDSC will be assessed on an amount equal to the
lesser of the current market value or the cost of the shares being redeemed.
Unlike Class B Shares, Class C Shares have no conversion feature.
WAIVER OF SALES CHARGES -- CLASS B SHARES AND CLASS C SHARES
The following qualify for waivers of sales charges:
Distributions following the death or disability of a shareholder.
Redemptions representing the minimum distribution from an IRA or a
Custodial Account to a shareholder who has reached age 70 1/2.
Redemptions representing the minimum distribution from 401(k) retirement
plans where such redemptions are necessary to make distributions to plan
participants.
26
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
EXCHANGING YOUR SHARES
You can exchange your shares in one Fund for shares of the same class of another
Republic Fund, usually without paying additional sales charges (see 'Notes on
Exchanges' below). No transaction fees are charged for exchanges.
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one Fund to another are taxable.
Exchanges may be made by sending a written request to Republic Funds, P.O. Box
182845, Columbus, Ohio 43218-2845 or by calling 1-800-782-8183.
Please provide the following information:
Your name and telephone number
The exact name on your account and account number
Taxpayer identification number (usually your social security number)
Dollar value or number of shares to be exchanged
The name of the Fund from which the exchange is to be made
The name of the Fund into which the exchange is being made.
See 'Selling your Shares' for important information about telephone
transactions.
To prevent disruption in the management of the Funds, due to market timing
strategies, exchange activity may be limited.
NOTES ON EXCHANGES
When exchanging from a Fund that has no sales charge or a lower sales charge to
a Fund with a higher sales charge, you will pay the difference.
The registration and tax identification numbers of the two accounts must be
identical.
The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time upon a 60-day notice to shareholders.
Be sure to read carefully the Prospectus of any Fund into which you wish to
exchange shares.
27
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information is meant as a general summary for U.S. taxpayers.
Please see the Fund's Statement of Additional Information for more
information. Because everyone's tax situation is unique, you should rely on
your own tax advisor for advice about the particular federal, state and local
tax consequences to you of investing in a Fund.
The Fund generally will not have to pay income tax on amounts it distributes
to shareholders, although shareholders will be taxed on distributions they
receive.
Any income the Fund receives in the form of interest and dividends is paid
out, less expenses, to its shareholders. Shares begin accruing interest and
dividends on the day they are purchased.
Dividends are paid monthly. Capital gains are distributed at least annually.
Unless a shareholder elects to receive dividends in cash, dividends will be
automatically invested in additional shares of the Fund.
Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.
Dividends are generally taxable as ordinary income.
If the Fund designates a dividend as a capital gain distribution (e.g., when
the Fund has a gain from the sale of an asset the Fund held for more than 12
months), you will pay tax on that dividend at the long-term capital gains tax
rate, no matter how long you have held your Fund shares.
Dividends are taxable in the year in which they are paid or deemed paid, even
if they appear on your account statement the following year. If the Fund
declares a dividend in October, November, or December of a year and
distributes the dividend in January of the next year, you may be taxed as if
you received it in the year declared rather than the year received.
There may be tax consequences to you if you dispose of your shares in the
Fund, for example, through redemption, exchange or sale. The amount of any
gain or loss and the rate of tax will depend mainly upon how much you pay for
the shares, how much you sell them for, and how long you held them.
You will be notified before February 1 of each year about the federal tax
status of distributions made by the Fund. The notice will tell you which
dividends and redemptions must be treated as taxable ordinary income and
which (if any) are short-term or long-term capital gain. Depending on your
residence for tax purposes, distributions also may be subject to state and
local taxes, including withholding taxes.
28
<PAGE>
SHAREHOLDER INFORMATION [LOGO]
DIVIDENDS, DISTRIBUTIONS AND TAXES
CONTINUED
As with all mutual funds, the Fund may be required to withhold U.S. federal
income tax at the rate of 31% of all taxable distributions payable to you if
you fail to provide the Fund with your correct taxpayer identification number
or to make required certifications, or if you have been notified by the IRS
that you are subject to backup withholding. Backup withholding is not an
additional tax, but is a method in which the IRS ensures that it will collect
taxes otherwise due. Any amounts withheld may be credited against your U.S.
federal income tax liability.
Foreign shareholders may be subject to special withholding requirements.
If you invest through a tax-deferred retirement account, such as an IRA, you
generally will not have to pay tax on dividends or capital gains until they
are distributed from the account. These accounts are subject to complex tax
rules, and you should consult your tax adviser about investment through a
tax-deferred account.
There is a penalty on certain pre-retirement distributions from retirement
accounts.
29
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
For more information about the Fund, the following documents are available free
upon request:
ANNUAL/SEMI-ANNUAL REPORTS (REPORTS):
The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Fund, including its
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.
YOU CAN GET FREE COPIES OF THE FUNDS REPORTS AND THE SAI, PROSPECTUSES OF OTHER
FUNDS IN THE REPUBLIC FAMILY OF FUNDS, OR REQUEST OTHER INFORMATION AND DISCUSS
YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING A BROKER OR BANK THAT SELLS THE
FUNDS. OR CONTACT THE FUNDS AT:
REPUBLIC FUNDS
P.O. BOX 182845
COLUMBUS, OHIO 43218-2845
TELEPHONE: 1-800-782-8183
You can review and copy the Fund's reports and SAI at the Public Reference Room
of the Securities and Exchange Commission. You can get text-only copies:
For a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-0102 or by electronic request at
[email protected]. Information on the operation of the Public Reference Room
may be obtained by calling the Commission at 202-942-8090.
Free from the Commission's Website at http://www.sec.gov.
Investment Company Act file no. 811-4782.
