Rule 497(e)
Registration No. 33-8982
The Victory Portfolios
National Municipal Bond Fund (the "Fund")
Supplement Dated September 4, 1996
to the Prospectus Dated March 1, 1996
as Supplemented July, 30 1996
Effective September 5, 1996, the information set forth under the headings
"Annual Fund Operating Expenses" and "Example" in the section of the Prospectus
entitled "Summary of Fund Expenses" has been restated below in order to reflect
the operating expenses that the Fund expects to incur.
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FUND EXPENSES
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The table below summarizes the expenses associated with the Fund. This standard
format was developed for use by all mutual funds to help an investor make
investment decisions. You should consider this expense information along with
other important information in this Prospectus, including the Fund's investment
objective, policies and risk factors.
SHAREHOLDER TRANSACTION EXPENSES 1.
<TABLE>
<CAPTION>
CLASS A CLASS B
Maximum Sales Charge Imposed on Purchases (as a
<S> <C> <C>
percentage of the offering price)............................. 4.75% None
Maximum Sales Charge Imposed on Reinvested
Dividends..................................................... None None
Deferred Sales Charge......................................... None 5% in the first year,
declining to 1% in the
sixth year and eliminated
thereafter
Redemption Fees............................................... None None
Exchange Fees................................................. None None
ANNUAL FUND OPERATING EXPENSES AFTER EXPENSE WAIVERS AND REIMBURSEMENTS (as a
percentage of average daily net assets).
CLASS A CLASS B
Management Fees 2 0.00% 0.00%
Administration Fees 0.15% 0.15%
Rule 12b-1 Distribution Fees 0.00% 0.75%
Other Expenses3 0.75% 1.95%
Total Fund Operating Expenses(3) 0.90% 1.85%
</TABLE>
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1 Investors may be charged a fee if they effect transactions in Fund
shares through a broker or agent, including affiliated banks and
non-bank affiliates of Key Advisers and KeyCorp. (See "How to Invest,
Exchange and Redeem.")
2 The Adviser and the Administrator have agreed to reduce their fees for
the indefinite future and reimburse the Fund for these expenses. Absent
the voluntary reduction of investment advisory fees, "Management Fees"
as a percentage of average daily net assets would be .55%.
3 These amounts include an estimate of the shareholder servicing fees the
Fund expects to pay. (See "Fund Organization and Fees -- Shareholder
Servicing Plan.") Absent the voluntary reductions and reimbursements
referred to in footnote (2) above, "Total Fund Operating Expenses" as a
percentage of average daily net assets for Class A and Class B shares
would be 1.45% and 2.40%, respectively.
<PAGE>
EXAMPLE: You would pay the following expenses on a $1,000 investment, assuming
(1) a 5% annual return and (2) full redemption at the end of each time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
National Municipal Bond Fund - Class A Shares $56 $75 $95 $153
National Municipal Bond Fund - Class B Shares $69 $88 $120 $192
</TABLE>
The purpose of the table above is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. See "Fund Organization and Fees" for a more complete discussion of
annual operating expenses of the Fund. The foregoing example is based upon
expenses for the fiscal year ended October 31, 1995 and expenses that the Fund
is expected to incur during the current fiscal year.
THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.