Rule 497(e)
Registration No. 33-8982
Dear Shareholder:
The Victory Funds Institutional Money Market Fund Prospectus is being revised.
Effective October 1, 1997, Key Asset Management Inc. will assume the duties of
sub-administrator to the Funds. Shareholders will not pay additional fees
because of this change. This Supplement also provides additional information
related to securities lending. This information is important and should be kept
with a copy of your Prospectus.
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The Victory Funds
Institutional Money Market Fund
Supplement Dated September 1, 1997
to the Prospectus Dated March 1, 1997
The Prospectus of the Institutional Money Market Fund is supplemented as
follows:
1. The table on page 3 titled "General Information About the
Institutional Money Market Fund" is replaced with the following:
<TABLE>
<CAPTION>
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Investor Shares Select Shares
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<S> <C> <C>
Inception Date 1/10/83 6/5/95
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Estimated Annual Expenses
(as a percentage of net assets) .27% .52%
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Newspaper Abbreviation* VictoryInst VictoryInstS
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</TABLE>
*All newspapers do not carry the same abbreviation.
2. Effective October 1, 1997, under "Organization and Management of the Funds,"
the first paragraph on page 15 in the subtopic "The Administrator, Distributor,
and Fund Accountant" should be replaced with the following:
BISYS Fund Services is the Administrator and the Distributor. BISYS is paid a
fee at the following annual rate based on the Fund's average daily net assets as
the Administrator: .15% for portfolio assets of $300 million and less, .12% for
the next $300 million through $600 million of portfolio assets; and .10% for
portfolio assets greater than $600 million. Under a Sub-Administration
Agreement, BISYS pays Key Asset Management Inc. to perform some of the
administrative duties for the Fund. BISYS pays Key Asset Management Inc. a
sub-administration fee at an annual rate of up to .05% of the Fund's average
daily net assets. BISYS does not charge a fee for its services as Distributor.
BISYS Fund Services Ohio, Inc. receives a fee as the Fund's Accountant.
3. On the bottom of page 19 under the heading, "Other Securities and
Investment Practices," the information in the table under "Securities Lending"
should be revised by adding the following sentence at the end of the paragraph,
and a new category, "Investment Company Securities," should also be added to the
table:
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List of Allowable Investments Institutional Money
and Investment Practices (continued) Market
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<S> <C>
SECURITIES LENDING. In order to generate additional income, the Fund 33
1/3% may lend its portfolios securities. The Fund will receive
collateral for the value of the security plus any interest due. The Fund
only will enter into loan arrangements with entities that the Adviser
has determined are creditworthy. Subject to the receipt of exemptive
relief from the SEC, Key Trust Company of Ohio, N.A., the lending agent,
may earn a fee based on the amount of income earned on the investment of
collateral.
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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List of Allowable Investments Institutional Money
and Investment Practices (continued) Market
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<S> <C>
INVESTMENT COMPANY SECURITIES. Shares of other mutual funds with similar
investment objectives. The following limitations apply: (1) No more than 5% 5%
of the Fund's total assets may be invested in one mutual fund, (2) the Fund and 3%
its affiliates may not own more than 3% of the securities of any one mutual 10%
fund, and (3) no more than 10% of the Fund's total assets may be
invested in combined mutual fund holdings.
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</TABLE>
Please insert this Supplement in the front of your Prospectus. Investors wishing
to obtain more information should call the Fund at 800-KEY-FUND(R).
VF-IMMF-SUP1
