Rule 497(e)
Registration No. 33-8982
Dear Shareholder:
The Victory Funds Prospectuses are 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. Effective
September 1, 1997, the sales charge for the funds indicated has been changed.
This Supplement also provides additional information related to securities
lending. This information is important and should be kept with a copy of your
Prospectus.
- --------------------------------------------------------------------------------
The Victory Funds
Balanced Fund
Diversified Stock Fund
Value Fund
Stock Index Fund
Ohio Regional Stock Fund
Growth Fund
Special Value Fund
Special Growth Fund
International Growth Fund
Supplement Dated September 1, 1997
to the Prospectus Dated March 1, 1997
The Prospectus of the above named funds is supplemented as follows:
1. The paragraph under "Fees and Expenses" on page 2 is revised as
follows:
The Value Fund, Stock Index Fund, Growth Fund, and Special Growth Fund offer
only Class A Shares, while the Balanced Fund, Diversified Stock Fund, Ohio
Regional Stock Fund, Special Value Fund, and International Growth Fund offer
both Class A and Class B Shares. If you purchase Class A shares of a Fund, you
may pay a sales charge of up to 5.75% of the offering price, depending on the
Fund in which you invest and the amount you invest. If you purchase Class B
shares of a Fund, you will not pay an initial sales charge; however, you may pay
a deferred sales charge if you sell (redeem) your shares within six years of
purchase, and you will pay additional distribution expenses. In either case, you
also will incur expenses for investment advisory, administrative, and
shareholder services, all of which are included in a Fund's expense ratio. See
"Choosing a Share Class."
2. The table on page 3 titled "General Information about each of the
Funds" is replaced as follows:
<TABLE>
<CAPTION>
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Estimated Annual
Inception Expenses Maximum Newspaper
Victory Fund Date After Waivers Sales Charge Abbreviation*
(as a % of net assets)
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
<S> <C> <C> <C> <C>
Balanced Fund--Class A 12/10/93 1.25% 5.75% Victory BalncdA
Balanced Fund--Class B 3/1/96 2.62% 5.00% Victory BalncdB
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Diversified Stock Fund--Class A 10/20/89 1.05% 5.75% Victory DvsStkA
Diversified Stock Fund--Class B 3/1/96 2.02% 5.00% Victory DvsStkB
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Value Fund--Class A 12/3/93 1.40% 5.75% Victory Value
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Stock Index Fund--Class A 12/3/93 0.56% 5.75% Victory StkIdx
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Ohio Regional Stock Fund--Class A 10/20/89 1.40% 5.75% Victory OHRegA
Ohio Regional Stock Fund--Class B 3/1/96 2.77% 5.00% Victory OHRegB
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Growth Fund --Class A 12/3/93 1.40% 5.75% Victory Growth
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Special Value Fund--Class A 12/3/93 1.40% 5.75% Victory SplValA
Special Value Fund--Class B 3/1/96 2.79% 5.00% Victory SplValB
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
Special Growth Fund--Class A 1/11/94 1.53% 5.75% Victory SplGwth
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
International Growth Fund--Class A 5/18/90 1.75% 5.75% Victory IntlGrA
International Growth Fund--Class B 3/1/96 3.10% 5.00% Victory IntlGrB
- -------------------------------------- ------------- ----------------------- -------------- -----------------------
</TABLE>
<PAGE>
*All newspapers do not use the same abbreviation.
3. On page 4 for the BALANCED FUND, page 6 for the DIVERSIFIED STOCK
FUND, page 12 for the OHIO REGIONAL STOCK FUND, page 16 for the SPECIAL VALUE
FUND, and page 20 for the INTERNATIONAL GROWTH FUND, the first table under "Fund
Expenses" is replaced as follows:
<TABLE>
<CAPTION>
---------------------------------------------------- ---------------------- ----------------------
Shareholder Transaction Expenses* Class A Shares Class B Shares
---------------------------------------------------- ---------------------- ----------------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases 5.75% NONE
(as a percentage of offering price)
---------------------------------------------------- ---------------------- ----------------------
Sales Charge Imposed on Reinvested Dividends NONE NONE
---------------------------------------------------- ---------------------- ----------------------
Deferred Sales Charge NONE 5.00%**
---------------------------------------------------- ---------------------- ----------------------
Redemption Fees NONE NONE
---------------------------------------------------- ---------------------- ----------------------
Exchange Fees NONE NONE
---------------------------------------------------- ---------------------- ----------------------
</TABLE>
*You may be charged additional fees if you purchase, exchange, or
redeem shares through a broker or agent.
**5% in the first year, declining to 1% in the sixth year, with no
charge after the sixth year.
4. On page 8 for the VALUE FUND, page 10 for the STOCK INDEX FUND, page 14
for the GROWTH FUND, page 18 for the SPECIAL GROWTH FUND, the first table under
"Fund Expenses" is replaced as follows:
<TABLE>
<CAPTION>
---------------------------------------------------- -----------------------------------------
Shareholder Transaction Expenses* Class A Shares
---------------------------------------------------- -----------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases 5.75%
(as a percentage of offering price)
---------------------------------------------------- -----------------------------------------
Sales Charge Imposed on Reinvested Dividends NONE
---------------------------------------------------- -----------------------------------------
Deferred Sales Charge NONE
---------------------------------------------------- -----------------------------------------
Redemption Fees NONE
---------------------------------------------------- -----------------------------------------
Exchange Fees NONE
---------------------------------------------------- -----------------------------------------
</TABLE>
*You may be charged additional fees if you purchase, exchange, or
redeem shares through a broker or agent.
5. The last paragraphs and tables on the pages indicated are replaced with the
following:
EXAMPLE: You would pay the following expenses on a $1,000 investment in
the Fund, assuming: (1) a 5% annual return and (2) redemption at the end of each
time period.
On page 4 for the BALANCED FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $70 $95 $122 $200
--------------------- ---------------- ----------------- ------------------- -----------------
Class B Shares $77 $111 $159 $262
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 6 for the DIVERSIFIED STOCK FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $68 $89 $112 $178
--------------------- ---------------- ----------------- ------------------- -----------------
Class B Shares $71 $93 $129 $210
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 8 for the VALUE FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $71 $99 $130 $216
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 10 for the STOCK INDEX FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $63 $74 $87 $124
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 12 for the OHIO REGIONAL STOCK FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $71 $99 $130 $216
--------------------- ---------------- ----------------- ------------------- -----------------
Class B Shares $78 $116 $166 $277
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
<PAGE>
On page 14 for the GROWTH FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
--------------------- ---------------- ----------------- ------------------- -----------------
Class A Shares $71 $99 $130 $216
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 16 for the SPECIAL VALUE FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $71 $99 $130 $216
--------------------- ---------------- ----------------- ------------------- -----------------
Class B Shares $78 $117 $167 $278
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 18 for the SPECIAL GROWTH FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
--------------------- ---------------- ----------------- ------------------- -----------------
Class A Shares $72 $103 $136 $229
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
On page 20 for the INTERNATIONAL GROWTH FUND:
<TABLE>
<CAPTION>
--------------------- ---------------- ----------------- ------------------- -----------------
1 Year 3 Years 5 Years 10 Years
--------------------- ---------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
--------------------- ---------------- ----------------- ------------------- -----------------
Class A Shares $74 $109 $147 $252
--------------------- ---------------- ----------------- ------------------- -----------------
Class B Shares $81 $126 $183 $310
--------------------- ---------------- ----------------- ------------------- -----------------
</TABLE>
6. For the DIVERSIFIED STOCK FUND on page 7 under "Financial
Highlights," the dates in the 7th and 8th columns should be changed from "Year
Ended Dec. 31" to "Year Ended Oct. 31, 1991" and "Year Ended Oct. 31, 1990."
7. For the SPECIAL GROWTH FUND on page 18 under "Investment Policies
and Strategy," the second bullet point should read:
"Under normal market conditions, the Special Growth Fund:
o May invest up to 35% of its total assets in:
/ / Equity securities of companies with market capitalization's of
approximately $1 billion or more
/ / Investment-grade debt securities
8. The table under "Calculation of Sales Charges -- Class A" on page 28
is revised as follows:
<TABLE>
<CAPTION>
Sales Charge Sales Charge Dealer Reallowance
Your investment as a % of as a % of as a % of the
Offering Price Your Investment Offering Price
- -------------------------------------- ----------------------- ----------------------- ------------------------------
<S> <C> <C> <C>
Up to $50,000 5.75% 6.10% 5.00%
- -------------------------------------- ----------------------- ----------------------- ------------------------------
$50,000 up to $100,000 4.50% 4.71% 4.00%
- -------------------------------------- ----------------------- ----------------------- ------------------------------
$100,000 up to $250,000 3.50% 3.63% 3.00%
- -------------------------------------- ----------------------- ----------------------- ------------------------------
$250,000 up to $500,000 2.50% 2.56% 2.00%
- -------------------------------------- ----------------------- ----------------------- ------------------------------
$500,000 up to $1,000,000 2.00% 2.04% 1.75%
- -------------------------------------- ----------------------- ----------------------- ------------------------------
$1,000,000 and above* 0.00% 0.00% *
- -------------------------------------- ----------------------- ----------------------- ------------------------------
</TABLE>
*There is no initial sales charge on purchases of $1 million or more. However, a
contingent deferred sales charge (CDSC) of up to 1.00% of the purchase price
will be charged to the shareholder if shares are redeemed in the first year
after purchase, or at .50% within two years of the purchase. This charge will be
based on either the cost of the shares or net asset value at the time of
redemption, whichever is lower. There will be no CDSC on reinvested
distributions. Investment Professionals may be paid at a rate of up to 1.00% of
the purchase price.
9. Effective October 1, 1997, under "Organization and Management of the
Funds," the first paragraph on page 35 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.
<PAGE>
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.
10. On the bottom of pages 38 and 39 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:
<TABLE>
<CAPTION>
- ------------------------------------- ---------- --------- --------- --------- ---------- --------- --------- ------------------
Balanced Diver-sifiValue Stock Ohio Growth Special Special International
List of Allowable Investments Fund Stock Fund Index Regional Fund Value Growth Growth
and Investment Practices Fund Fund Stock Fund Fund Fund
Fund
- ------------------------------------- ---------- --------- --------- --------- ---------- --------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES LENDING. In order to
generate additional income, a Fund
may lend its portfolios
securities. A Fund will receive 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3%
collateral for the value of the
security plus any interest due. A
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.
- ------------------------------------- ---------- --------- --------- --------- ---------- --------- --------- ------------------
INVESTMENT COMPANY SECURITIES.
Shares of other mutual funds with
similar investment objectives. The 5% 5% 5% 5% 5% 5% 5% 5% 5%
following limitations apply: (1) 3% 3% 3% 3% 3% 3% 3% 3% 3%
No more than 5% of the Fund's total 10% 10% 10% 10% 10% 10% 10% 10% 10%
assets may be invested in one
mutual fund, (2) a Fund and its
affiliates may not own more than 3%
of the securities of any one mutual
fund, and (3) no more than 10% of
the Fund's total assets may be
invested in combined mutual fund
holdings.
- ------------------------------------- ---------- --------- --------- --------- ---------- --------- --------- ------------------
</TABLE>
Please insert this Supplement in the front of your Prospectus. Investors
wishing to obtain more information should call the Funds at
800-KEY-FUND(R).
VF-EQTY-SUP1
