VICTORY PORTFOLIOS, 497, 2000-01-31

VICTORY PORTFOLIOS
497, 2000-01-31

Previous: HARNISCHFEGER INDUSTRIES INC, NT 10-K, 2000-01-31

Next: AIR BROOK AIRPORT EXPRESS INC, 10KSB40, 2000-01-31

Dear Shareholder:

The Prospectus for the Established Value Fund presents
information about Class A Shares; however, the Class A Shares for
this Fund are not yet available. Please keep a copy of this
supplement with your Prospectus.
- -------------------------------------------------------------------------------

The Victory Portfolios

Established Value Fund

Supplement dated January 31, 2000
To the Prospectus Dated January 18, 2000

The Prospectus of the Established Value Fund is supplemented as follows:

The Prospectus provides information about Class A Shares on the cover, pages 3,
8, 9, 10, and 14 and in various other places throughout the document. Class A
Shares of the Established Value Fund are not yet available for sale. These
shares are expected to be introduced sometime in the next few months. Since they
are not available at the present time, all references to Class A Shares in the
Prospectus should be disregarded.

Please insert this Supplement in the front of your Prospectus. If you wish to
obtain more information, please call the Fund at 800-539-FUND.

VF-EVF-SUP

<PAGE>
January 18, 2000

[Logo Key]
Victory Funds

PROSPECTUS

Established
Value Fund
Class A and G Shares

As with all mutual funds, the Call Victory at:
Securities and Exchange Commission 800-539-FUND
has not approved or disapproved the (800-539-3863)
Fund's securities or determined or visit the Victory Funds' website at:
whether this Prospectus is accurate www.victoryfunds.com
or complete. Any representation to
the contrary is a criminal offense.

<PAGE>

THE VICTORY PORTFOLIOS

TABLE OF CONTENTS

RISK/RETURN SUMMARY OF THE FUND 2
An analysis which includes the investment
objective, principal strategies, principal
risks, performance, and expenses.

INVESTMENTS 4

RISK FACTORS 4

SHARE PRICE 5

DIVIDENDS, DISTRIBUTIONS, AND TAXES 5

INVESTING WITH VICTORY
- Choosing a Share Class 8
- How to Buy Shares 11
- How to Exchange Shares 14
- How to Sell Shares 15

ORGANIZATION AND MANAGEMENT OF THE FUND 17

ADDITIONAL INFORMATION 19

FINANCIAL HIGHLIGHTS 20

KEY TO FUND INFORMATION

[LOGO] OBJECTIVE AND STRATEGIES
The goals and the strategies that the Fund plans to use to pursue its
investment objective.

[LOGO] RISK FACTORS
The risks you may assume as an investor in the Fund.

[LOGO] PERFORMANCE
A summary of the historical performance of the Fund in comparison to
an unmanaged index.

[LOGO] EXPENSES
The costs you will pay, directly or indirectly, as an investor in the
Fund, including sales charges and ongoing expenses.

SHARES OF THE FUND ARE:
- NOT INSURED BY THE FDIC;
- NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY KEYBANK, ANY OF ITS
AFFILIATES, OR ANY OTHER BANK;
- SUBJECT TO POSSIBLE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE AMOUNT
INVESTED.

<PAGE>

ESTABLISHED VALUE FUND RISK/RETURN SUMMARY

[LOGO] INVESTMENT OBJECTIVE

The investment objective of the Fund is long-term capital growth by investing
primarily in common stocks.

[LOGO] PRINCIPAL INVESTMENT STRATEGIES

The Fund pursues its investment objective by investing primarily in equity
securities of companies with market capitalization of $1 billion or more. The
companies are usually selected from those in the Standard & Poor's Composite
Stock Price Index (S&P 500).

In making investment decisions, Key Asset Management Inc., the Fund's
investment adviser (KAM or the Adviser), looks for companies whose stock is
trading at prices below what the Adviser believes represent their true value.
When selecting investments for the Fund's portfolio, the Adviser looks for the
following characteristics, among others: consistent earnings growth; stable
earnings growth combined with dividend yield, rising earnings prospects;
price-to-book ratios and price-to-earnings ratios that are generally lower
than those prevalent in the market; and the rate at which a stock's price is
rising. The Adviser uses a computer model that examines the characteristics
described above, among others, to assist in selecting securities that appear
favorably priced.

Under normal market conditions, the Fund:

- Will invest at least 80% of its total assets in equity securities of
companies with market capitalization of $1 billion or more.

[LOGO] PRINCIPAL RISKS

You may lose money by investing in the Fund. The Fund is subject to the
following principal risks, more fully described in "Risk Factors." The Fund's
net asset value, yield and/or total return may be adversely affected if any of
the following occurs:

- The market value of securities acquired by the Fund declines.

- Value stocks decline in price faster than growth stocks.

- The portfolio manager does not execute the Fund's principal investment
strategies effectively.

- A company's earnings do not increase as expected.

An investment in the Fund is not a deposit of KeyBank or any of its affiliates
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.

Who May Want to Invest In the Fund:

- Investors who want a diversified portfolio of equity securities.

- Investors willing to accept the risk of price and dividend fluctuations.

- Investors willing to accept higher short-term risk along with higher
potential long-term returns.

- Long-term investors with a particular goal, like saving for retirement or
a child's education.

- Investors who want potential growth over time.

<PAGE>

ESTABLISHED VALUE FUND RISK/RETURN SUMMARY

[LOGO] INVESTMENT PERFORMANCE

The bar chart and table shown below provide an indication of the risks of
investing in the Fund by showing changes in its performance for various time
periods ending December 31st. The figures shown in the bar chart and table
assume reinvestment of dividends and distributions.

The bar chart shows returns for Class G Shares of the Fund. The bar chart
does not reflect any sales charges that you may be required to pay when you buy
or sell your shares. If sales charges were reflected, returns would be lower
than those shown.

Bar Graph

1990 -8.11%
1991 22.23%
1992 10.20%
1993 20.78%
1994 0.32%
1995 26.44%
1996 19.32%
1997 22.65%
1998 6.12%
1999 17.07%

PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.

During the period shown in the bar chart, the highest return for a quarter was
14.10% (quarter ending June 30, 1999) and the lowest return for a quarter was
- -13.22% (quarter ending September 30, 1998).

The table shows how the average annual total returns for Class G Shares of
the Fund for one year, five years and ten years compared to those of a
broad-based market index.

AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDED PAST PAST PAST
DECEMBER 31,1999) ONE YEAR 5 YEARS 10 YEARS

Class G Shares(1) 17.07% 18.12% 13.18%
- ------------------------------------------------------------
S&S&P 500 Index(2) 19.53% 26.15% 15.30%

(1)The Fund did not offer Class A Shares as of December 31, 1999.
(2)The S&P 500 Index of large capitalization companies is a widely
recognized, unmanaged index of common stock prices.

[LOGO] FUND EXPENSES

This section describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.

SHAREHOLDER TRANSACTION EXPENSES
(PAID DIRECTLY FROM YOUR INVESTMENT)(1) CLASS A CLASS G

Maximum Sales Charge
Imposed on Purchases 5.75% NONE
(as a percentage of offering price)
- -----------------------------------------------------------------------------
Maximum Deferred
Sales Charge (as a percentage of NONE(2) NONE
the lower of purchase or sale price)
- -----------------------------------------------------------------------------
Maximum Sales Charge Imposed
on Reinvested Dividends NONE NONE
- -----------------------------------------------------------------------------
Redemption Fees NONE NONE
- -----------------------------------------------------------------------------
Exchange Fees NONE NONE
- -----------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES
(DEDUCTED FROM FUND ASSETS)

Management Fees 0.51% 0.51%
- -----------------------------------------------------------------------------
Distribution (12b-1) Fees 0.00% 0.50%
- -----------------------------------------------------------------------------
Other Expenses (includes a shareholder
servicing fee of 0.25% applicable to Class A Shares) 0.54% 0.26%
- -----------------------------------------------------------------------------
Total Fund Operating Expenses 1.05% 1.27%
- -----------------------------------------------------------------------------
Fee Waiver/Reimbursement (0.17)% (0.17)%
- -----------------------------------------------------------------------------
Net Expenses 0.88%(3) 1.10%(4)

(1)You may be charged additional fees if you buy, exchange, or sell shares
through a broker or agent.
(2)Except for non-IRA tax deferred retirement accounts, there is no initial
sales charge on purchases of $1 million or more for Class A Shares. However,
if you sell any of such Class A Shares within one year, you will be charged a
contingent deferred sales charge (CDSC) of 1.00%. If you sell any of such
Class A Shares within two years, you will be charged a CDSC of 0.50%.
(3)Estimated Class A expenses are based on historical expenses of Class G Shares
of the Fund for the fiscal year ended October 31, 1999. KAM has agreed to
waive its management fee or to reimburse expenses, as allowed by law, to the
extent necessary to maintain the net operating expenses of Class A Shares of
the Fund at a maximum of 0.88% until at least February 28, 2001.
(4)KAM has agreed to waive its management fee or to reimburse expenses, as
allowed by law, to the extent necessary to maintain the net operating
expenses of Class G Shares of the Fund at a maximum of 1.10% until at least
April 1, 2001.

EXAMPLE: The following Example is designed 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 shown
and then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same.(1) Although your actual costs may be higher
or lower, based on these assumptions your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A $660 $874 $1,107 $1,778
- ------------------------------------------------------
Class G $112 $386 $ 681 $1,521

(1)This Example assumes that net annual operating expenses for Class A of the
Fund will equal 0.88% until February 28, 2001 and will equal 1.05% thereafter
and that net annual operating expenses for Class G of the Fund will equal
1.10% until April 1, 2001 and will equal 1.27% thereafter.

<PAGE>

[LOGO]

BY MATCHING YOUR INVESTMENT OBJECTIVE WITH AN ACCEPTABLE LEVEL OF RISK, YOU CAN
CREATE YOUR OWN CUSTOMIZED INVESTMENT PLAN.

INVESTMENTS

Under normal market conditions, the Fund purchases equity securities, including
common stock, preferred stock and securities that are convertible or
exchangeable into common stock of U.S. corporations.

For cash management or for temporary defensive purposes in response to
market conditions, the Fund may hold all or a portion of its assets in cash or
short-term money market instruments. This may reduce the benefit from any
upswing in the market and may cause the Fund to fail to meet its investment
objective.

For a more complete description of the types of securities in which the
Fund can invest, see the Statement of Additional Information (SAI).

An investment in the Fund is not a complete investment program.

[LOGO] RISK FACTORS

This Prospectus describes the principal risks that you may assume as an investor
in the Fund.

The Fund is subject to the principal risks described below.

General risks:

- - MARKET RISK is the risk that the market value of a security may fluctuate,
depending on the supply and demand for that type of security. As a result of
this fluctuation, a security may be worth more or less than the price the Fund
originally paid for the security, or more or less than the security was
worth at an earlier time. Market risk may affect a single issuer, an industry,
a sector of the economy, or the entire market and is common to all
investments.

- - MANAGER RISK is the risk that the Fund's portfolio manager may implement the
Fund's investment strategy in a way that does not produce the intended result.

Risks associated with investing in equity securities:

- - EQUITY RISK is the risk that the value of the security will fluctuate in
response to changes in earnings or other conditions affecting the issuer's
profitability. Unlike debt securities, which have preference to a company's
assets in case of liquidation, equity securities are entitled to the
residual value after the company meets its other obligations. For example, in
the event of bankruptcy, holders of debt securities have priority over holders
of equity securities to a company's assets.

IT IS IMPORTANT TO KEEP IN MIND ONE BASIC PRINCIPLE OF INVESTING: THE GREATER
THE RISK, THE GREATER THE POTENTIAL REWARD. THE REVERSE IS ALSO GENERALLY TRUE:
THE LOWER THE RISK, THE LOWER THE POTENTIAL REWARD.

<PAGE>
[LOGO]

SHARE PRICE

The Fund calculates its share price, called its "net asset value" (NAV), each
business day at 4:00 p.m. Eastern Time or at the close of trading on the New
York Stock Exchange, Inc. (NYSE), whichever time is earlier. You may buy,
exchange, and sell your shares on any business day at a price that is based on
the NAV that is calculated after you place your order. A business day is a day
on which the NYSE is open.

The Fund values its investments based on market value. When market
quotations are not readily available, the Fund values its investments based on
fair value methods approved by the Board of Trustees of the Victory Portfolios.
Each Class of the Fund calculates its NAV by adding up the total value of its
investments and other assets, subtracting its liabilities, and then dividing
that figure by the number of outstanding shares of the Class.

Total Assets-Liabilities
NAV = ----------------------------
Number of Shares Outstanding

You can find the Fund's net asset value each day in The Wall Street Journal
and other newspapers. Newspapers do not normally publish fund information until
the Fund reaches a specific number of shareholders or level of assets.

The daily NAV is useful to you as a shareholder because the NAV, multiplied by
the number of Fund shares you own gives you the value of your investment.

DIVIDENDS, DISTRIBUTIONS, AND TAXES

As a shareholder, you are entitled to your share of net income and capital gains
on the Fund's investments. The Fund passes its earnings along to investors in
the form of dividends. Dividend distributions are the net income earned on
investments after expenses. The Fund will distribute short-term gains, as
necessary, and if the Fund makes a long-term capital gain distribution, it is
normally paid once a year. As with any investment, you should consider the tax
consequences of an investment in the Fund.

Ordinarily, the Fund declares and pays dividends quarterly. Each class of shares
declares and pays dividends separately.

<PAGE>

[LOGO]

BUYING A DIVIDEND. YOU SHOULD CHECK THE FUND'S DISTRIBUTION SCHEDULE BEFORE YOU
INVEST. IF YOU BUY SHARES OF THE FUND SHORTLY BEFORE IT MAKES A DISTRIBUTION,
SOME OF YOUR INVESTMENT MAY COME BACK TO YOU AS A TAXABLE DISTRIBUTION.

DIVIDENDS, DISTRIBUTIONS, AND TAXES (CONTINUED)

Distributions can be received in one of the following ways.

REINVESTMENT OPTION
You can have distributions automatically reinvested in additional shares of the
Fund. If you do not indicate another choice on your Account Application, you
will be assigned this option automatically.

CASH OPTION
A check will be mailed to you no later than seven days after the dividend pay
date.

INCOME EARNED OPTION
You can automatically reinvest your dividends in additional shares of the Fund
and have your capital gains paid in cash, or reinvest capital gains and have
your dividends paid in cash.

DIRECTED DIVIDENDS OPTION
In most cases, you can automatically reinvest distributions in shares of another
fund of The Victory Portfolios. If you reinvest your distributions in a
different class of another fund, you may pay a sales charge on the reinvested
distributions.

DIRECTED BANK ACCOUNT OPTION
In most cases, you can automatically transfer distributions to your bank
checking or savings account. Under normal circumstances, the Transfer Agent will
transfer your distributions within seven days of the dividend payment date. The
bank account must have a registration identical to that of your Fund account.

<PAGE>

[LOGO]

DIVIDENDS, DISTRIBUTIONS, AND TAXES (CONTINUED)

- - IMPORTANT INFORMATION ABOUT TAXES
The Fund pays no federal income tax on the earnings and capital gains it
distributes to shareholders.

- - Ordinary dividends from the Fund are taxable as ordinary income; dividends
from the Fund's long-term capital gains are taxable as capital gain.

- - Dividends are treated in the same manner for federal income tax purposes
whether you receive them in cash or in additional shares. They also may be
subject to state and local taxes.

- - Dividends from the Fund that are attributable to interest on certain U.S.
government obligations may be exempt from certain state and local income
taxes. The extent to which ordinary dividends are attributable to these U.S.
government obligations will be provided on the tax statements you receive from
the Fund.

- - An exchange of the Fund's shares for shares of another fund will be treated
as a sale. When you sell or exchange shares of the Fund, you must recognize
any gain or loss.

- - Certain dividends paid to you in January will be taxable as if they had been
paid to you the previous December.

- - Tax statements will be mailed from the Fund every January showing the amounts
and tax status of distributions made to you.

- - Because your tax treatment depends on your purchase price and tax position,
you should keep your regular account statements for use in determining your
tax.

- - You should review the more detailed discussion of federal income tax
considerations in the SAI.

THE TAX INFORMATION IN THIS PROSPECTUS IS PROVIDED AS GENERAL INFORMATION. YOU
SHOULD CONSULT YOUR OWN TAX ADVISER ABOUT THE TAX CONSEQUENCES OF AN INVESTMENT
IN THE FUND.

<PAGE>

[LOGO]

INVESTING WITH VICTORY

If you are looking for a convenient way to open an account or to
add money to an existing account, Victory can help. The sections that follow
will serve as a guide to your investments with Victory. "Choosing a Share
Class" will help you decide whether it would be more to your advantage to
buy Class A or Class G Shares of the Fund. The following sections will describe
how to open an account, how to access information on your account, and
how to buy, exchange, and sell shares of the Fund. We want to make it
simple for you to do business with us. If you have questions about any of
this information, please call your Investment Professional or one of our
customer service representatives at 800-539-FUND.
They will be happy to assist you.

All you need to do to get started is to fill out an application.

CHOOSING A SHARE CLASS

The Fund offers Class A and Class G Shares.

Each class has its own cost structure, allowing you to choose the one that
best meets your requirements. Your Investment Professional also can help you
decide. An Investment Professional is an investment consultant, salesperson,
financial planner, investment adviser, or trust officer who provides you with
investment information.

CLASS A CLASS G

- - Front-end sales charge, as - No front-end sales charge. All
described on the next page. There your money goes to work for you
are several ways to reduce this right away.
charge.
- Higher annual expenses than Class
- - Lower annual expenses than Class G A Shares.
Shares.
- Class G Shares are sold only by
certain broker-dealers.

For historical expense information on Class G shares, see the financial
highlights at the end of this Prospectus.

<PAGE>

[LOGO]

CHOOSING A SHARE CLASS (CONTINUED)

- - CALCULATION OF SALES CHARGES -- CLASS A

Class A Shares are sold at their public offering price, which is the NAV plus
the applicable initial sales charge. The sales charge as a percentage of your
investment decreases as the amount you invest increases. The current sales
charge rates are as follows:

SALES CHARGE SALES CHARGE
AS A % OF AS A % OF
YOUR INVESTMENT IN THE FUND OFFERING PRICE YOUR INVESTMENT
- ------------------------------------------------------------------------------
Up to $49,999 5.75% 6.10%
- ------------------------------------------------------------------------------
$50,000 up to $99,999 4.50% 4.71%
- ------------------------------------------------------------------------------
$100,000 up to $249,999 3.50% 3.63%
- ------------------------------------------------------------------------------
$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(*) 0.00% 0.00%

*Except as indicated in the last sentence of this note, 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 any such shares are redeemed in the first year after purchase,
or at 0.50% 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. The
initial sales charge exemption on investments of $1 million or more does not
apply to tax deferred retirement accounts (except IRA accounts); the sales
charge on investments by such tax deferred retirement accounts of $1 million or
more is the same as for investments between $500,000 and $999,999.

- - SALES CHARGE REDUCTIONS AND WAIVERS FOR CLASS A SHARES

You may qualify for reduced sales charges in the following cases:

1. A Letter of Intent lets you buy Class A Shares of the Fund over a 13-month
period and receive the same sales charge as if all shares had been pur-
chased at one time. You must start with a minimum initial investment of 5% of
the total amount.

2. Rights of Accumulation allow you to add the value of any Class A Shares you
already own to the amount of your next Class A investment for purposes of
calculating the sales charge at the time of purchase.

3. You can combine Class A Shares of multiple Victory Funds, (excluding funds
sold without a sales charge) for purposes of calculating the sales charge.
The combination privilege also allows you to combine the total investments
from the accounts of household members of your immediate family (spouse and
children under 21) for a reduced sales charge at the time of purchase.

4. Waivers for certain investors:

a. Current and retired Fund Trustees, directors, trustees, employees, and
family members of employees of KeyCorp or "Affiliated Providers,"(*) and
dealers who have an agreement with the Distributor and any trade
organization to which the Adviser or the Administrator belong.

b. Investors who purchase shares for trust or other advisory accounts estab-
lished with KeyCorp or its affiliates.

THERE ARE SEVERAL WAYS YOU CAN COMBINE MULTIPLE PURCHASES IN THE VICTORY FUNDS
AND TAKE ADVANTAGE OF REDUCED SALES CHARGES.

(*)Affiliated Providers are affiliates and subsidiaries of KeyCorp, and any
organization that provides services to the Victory Group.

<PAGE>

[LOGO]

CHOOSING A SHARE CLASS (CONTINUED)

c. Investors who reinvest the proceeds from a liquidation distribution of Class
A Shares held in a deferred compensation plan, agency, trust, or custody
account that was maintained by KeyBank N.A. and its affiliates, the Victory
Group, or invested in a fund of the Victory Group.

d. Investment Professionals who purchase Fund shares for fee-based investment
products or accounts, and selling brokers and their sales representatives.

e. Purchases of shares in connection with financial institution sponsored
bundled omnibus retirement programs sponsored by financial institutions that
have entered into agreements with the Fund's Distributor in connection with
the operational requirements of such programs.

f. Participants in tax-deferred retirement plans who purchased shares pursuant
to waiver provisions in effect prior to December 15, 1999.

- - SHAREHOLDER SERVICING PLAN

The Fund has adopted a Shareholder Servicing Plan for its Class A Shares. The
shareholder servicing agent performs a number of services for its customers who
are shareholders of the Fund. It establishes and maintains accounts and records,
processes dividend payments, arranges for bank wires, assists in transactions,
and changes account information. For these services the Fund pays a fee at an
annual rate of up to 0.25% of the average daily net assets of Class A shares
serviced by the agent. The Fund may enter into agreements with various
shareholder servicing agents, including KeyBank National Association and its
affiliates, other financial institutions, and securities brokers. The Fund may
pay a servicing fee to broker-dealers and others who sponsor "no transaction
fee" or similar programs for the purchase of shares. Shareholder servicing
agents may waive all or a portion of their fee periodically.

<PAGE>

[LOGO]

CHOOSING A SHARE CLASS (CONTINUED)

- - DISTRIBUTION PLAN

In accordance with Rule 12b-1 under the Investment Company Act of 1940, Victory
has adopted a Distribution and Service Plan for Class A Shares of the Fund, but
the Fund does not pay expenses under this plan. See the SAI for more details
regarding this plan.

Victory also has adopted a Rule 12b-1 Distribution and Service Plan for
Class G Shares of the Fund, under which these shares will pay to the Distributor
a monthly service fee at an annual rate of 0.25% of the average daily net assets
of the Fund. The service fee is paid to securities broker-dealers or other
financial intermediaries for providing personal services to shareholders of the
Fund, including responding to inquiries, providing information to shareholders
about their fund accounts, establishing and maintaining accounts and records,
processing dividend and distribution payments, arranging for bank wires,
assisting in transactions, and changing account information. The Fund may enter
into agreements with various shareholder servicing agents, including KeyCorp and
its affiliates, and with other financial institutions that provide such
services.

Under the Class G Rule 12b-1 Distribution and Service Plan, Class G Shares
of the Fund also annually pay the Distributor a monthly distribution fee in an
additional amount of up to 0.25% of its average daily net assets. The
distribution fee is paid to the Distributor for general distribution services
and for selling Class G Shares of the Fund. The Distributor makes payments to
agents who provide these services.

Because Rule 12b-1 fees are paid out of the Fund's assets on an on-going
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

HOW TO BUY SHARES

You can buy shares in a number of different ways. All you need to do to get
started is to fill out an application. The minimum investment required to open
an account is $500 ($100 for IRAs), with additional investments of at least $25.
There is no minimum investment required to open an account or for additional
investments for SIMPLE IRAs. You can send in your payment by check, wire
transfer, exchange from another Victory Fund, or through arrangements with your
Investment Professional. Sometimes an Investment Professional will charge you
for these services. This fee will be in addition to, and unrelated to, the fees
and expenses charged by the Fund.

If you buy shares directly from the Fund and your investment is received
and accepted by 4:00 p.m. Eastern Time or the close of trading on the NYSE
(whichever time is earlier), your purchase will be processed the same day using
that day's share price.

Make your check payable to:

The
Victory
Funds

<PAGE>

[LOGO]

HOW TO BUY SHARES (CONTINUED)

Keep the following addresses handy for purchases, exchanges, or redemptions:

[LOGO] BY REGULAR U.S. MAIL

<S> <C> <C>
Send completed Account The Victory Funds or The Victory Funds
Applications with your check, P.O. Box 8527 c/o Gradison McDonald
bank draft, or money order to: Boston, MA 02266-8527 580 Walnut Street
Cincinnati, OH 45202

[LOGO] BY OVERNIGHT MAIL

Use this address ONLY The Victory Funds or The Victory Funds
for overnight packages. c/o Boston Financial c/o Gradison McDonald
Data Services 580 Walnut Street
66 Brooks Drive Cincinnati, OH 45202
Braintree, MA 02184 PHONE: 800-539-FUND
PHONE: 800-539-FUND

[LOGO] BY WIRE

The Transfer Agent does not State Street Bank and Trust Co. or The Victory Funds
charge a wire fee, but your ABA #011000028 c/o Gradison McDonald
originating bank may charge a For Credit to DDA 800-539-3863
fee. Always call the Transfer Account #9905-201-1 Firstar Bank
Agent BEFORE wiring funds and For Further Credit to Account ABA #042000013
to obtain a confirmation (insert account number, name, For Credit to DDA
number. and confirmation number Account #9307703
assigned by the Transfer Agent) (insert account number
and name)

</TABLE>

[LOGO] TELEPHONE NUMBER

800-539-FUND
or (800-539-3863)

<PAGE>

[LOGO]

HOW TO BUY SHARES (CONTINUED)

- - ACH

After your account is set up, your purchase amount can be transferred by
Automated Clearing House (ACH). Only domestic member banks may be used. It takes
about 15 days to set up an ACH account. Currently, the Fund does not charge a
fee for ACH transfers.

- - STATEMENTS AND REPORTS

You will receive a periodic statement reflecting any transactions that affect
the balance or registration of your account. You will receive a confirmation
after any purchase, exchange, or redemption. If your account has been set up by
an Investment Professional, Fund share activity will be detailed in that
account's statement. Share certificates are not issued. Twice a year, you will
receive the financial reports of the Fund. By January 31 of each year, you will
be mailed an IRS form reporting distributions for the previous year, which also
will be filed with the IRS.

- - SYSTEMATIC INVESTMENT PLAN

To enroll in the Systematic Investment Plan, you should check this box on the
Account Application. We will need your bank information and the amount and
frequency of your investment. You can select monthly, quarterly, semi-annual, or
annual investments. You should attach a voided personal check so the proper
information can be obtained. You must first meet the minimum investment
requirement of $500, then we will make automatic withdrawals of the amount you
indicate ($25 or more) from your bank account and invest it in shares of the
Fund.

- - RETIREMENT PLANS

You can use the Fund as part of your retirement portfolio. Your Investment
Professional can set up your new account under one of several tax-deferred
retirement plans. Please contact your Investment Professional or the Fund for
details regarding an IRA or other retirement plan that works best for your
financial situation.

IF YOU WOULD LIKE TO MAKE ADDITIONAL INVESTMENTS AFTER YOUR ACCOUNT IS
ESTABLISHED, USE THE INVESTMENT STUB ATTACHED TO YOUR CONFIRMATION STATEMENT AND
SEND IT WITH YOUR CHECK TO THE ADDRESS INDICATED.

All purchases must
be made in U.S. dollars
and drawn on U.S. banks.
The Transfer Agent may reject
any purchase order in its sole discretion.
If your check is returned for any reason,
you will be charged for any resulting fees and/or
losses. Third party checks will not be accepted.
You may only buy or exchange into fund shares legally available
in your state. If your account falls below $500
($100 for IRAs), we may ask you to re-establish the minimum
investment. If you do not do so within 60 days, we may close your
account and send you the value of your account.

<PAGE>

[LOGO]

HOW TO EXCHANGE SHARES

You can sell shares of one fund of the Victory Portfolios to buy shares of the
same class of any other. This is considered an exchange.

YOU CAN OBTAIN A LIST OF FUNDS AVAILABLE FOR EXCHANGE BY CALLING 800-539-FUND.

You can exchange shares of the Fund by writing the Transfer Agent or calling
800-539-FUND. When you exchange shares of the Fund, you should keep the
following in mind:

- - Shares of the Fund selected for exchange must be available for sale in your
state of residence.

- - The Fund whose shares you want to exchange and the fund whose shares you want
to buy must offer the exchange privilege.

- - Holders of Class G Shares who acquired their shares as a result of the
reorganization of the Gradison Funds into the Victory Funds can exchange into
Class A Shares of any Victory Fund that does not offer Class G Shares without
paying a sales charge.

- - If you acquire Class A Shares of the Fund as a result of an exchange you pay
the percentage point difference, if any, between the Fund's sales charge and
any sales charge that you previously paid in connection with the shares you
are exchanging. For example, if you acquire Class A Shares of the Fund as a
result of an exchange from another fund of the Victory Group that has a 2.00%
sales charge, you would pay the 3.75% difference in sales charge.

- - On certain business days, such as Veterans Day and Columbus Day, the Federal
Reserve Bank of Cleveland is closed. On those days, exchanges to or from a
money market fund will be processed on the exchange date, with the
corresponding purchase or sale of the money market fund shares being effected
on the next business day.

- - You must meet the minimum purchase requirements for the fund you purchase by
exchange.

- - The registration and tax identification numbers of the two accounts must be
identical.

- - You must hold the shares you buy when you establish your account for at least
seven days before you can exchange them; after the account is open seven days,
you can exchange shares on any business day.

- - The Fund may refuse any exchange purchase request if the Adviser determines
that the request is associated with a market timing strategy. The Fund may
terminate or modify the exchange privilege at any time on 30 days' notice to
shareholders.

- - Before exchanging, read the prospectus of the fund you wish to purchase by
exchange. An exchange of Fund shares constitutes a sale for tax purposes.

<PAGE>

[LOGO]

HOW TO SELL SHARES

If your request is received in good order by 4:00 p.m. Eastern Time or the close
of trading on the NYSE (whichever time is earlier), your redemption will be
processed the same day.

[LOGO] BY TELEPHONE

The easiest way to sell shares is by calling 800-539-FUND. When you fill out
your original application, be sure to check the Fund box marked "Telephone
Authorization." Then when you are ready to sell, call and tell us which one of
the following options you would like to use:

- Mail a check to the address of record;

- Wire funds to a domestic financial institution;

- Mail a check to a previously designated alternate address; or

- Electronically transfer your redemption via the Automated Clearing House
(ACH).

The Transfer Agent records all telephone calls for your protection and
takes measures to verify the identity of the caller. If the Transfer Agent
properly acts on telephone instructions and follows reasonable procedures to
ensure against unauthorized transactions, neither Victory, its servicing agents,
the Adviser, nor the agency, Transfer Agent will be responsible for any losses.
If the Transfer Agent does not follow these procedures, it may be liable to you
for losses resulting from unauthorized instructions.

If there is an unusual amount of market activity and you cannot reach the
Transfer Agent or your Investment Professional by telephone, consider placing
your order by mail.

THERE ARE A NUMBER OF CONVENIENT WAYS TO SELL YOUR SHARES. YOU CAN USE THE SAME
MAILING ADDRESSES LISTED FOR PURCHASES.

[LOGO] BY MAIL

Use the Regular U.S. Mail or Overnight Mail Address to redeem shares. Send us a
letter of instruction indicating your account number, amount of redemption, and
where to send the proceeds. A signature guarantee is required for the following
redemption requests:

- Redemptions over $10,000;

- Your account registration 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;

- The redemption proceeds are being transferred to another Victory Group
account with a different registration; or

- The check or wire is being sent to a different bank account.

You can get a signature guarantee from a financial institution such as a
bank, broker-dealer, credit union, clearing or savings association.

[LOGO] BY WIRE

If you want to receive your proceeds by wire, you must establish a Fund account
that will accommodate wire transactions. If you call by 4:00 p.m. Eastern Time
or the close of trading on the NYSE (whichever time is earlier), your funds will
be wired on the next business day.

[LOGO] BY ACH

Normally, your redemption will be processed on the same day, but will be
processed on the next day if received after 4:00 p.m. Eastern Time or the close
of trading on the NYSE (whichever time is earlier). It will be transferred by
ACH as long as the transfer is to a domestic bank.

<PAGE>

[LOGO]

HOW TO SELL SHARES (CONTINUED)

- - SYSTEMATIC WITHDRAWAL PLAN

If you check this box on the Account Application, we will send monthly, quar-
terly, semi-annual, or annual payments to the person you designate. The minimum
withdrawal is $25, and you must have a balance of $5,000 or more. If the payment
is to be sent to a bank account of yours, we will need a voided personal check
to activate this feature. If the payment is to be made to an address different
from your account address, we will need a signature guaranteed letter of
instruction. You should be aware that your account eventually may be depleted.
However, you cannot automatically close your account using the Systematic
Withdrawal Plan. If your balance falls below $500, we may ask you to bring the
account back to the minimum balance. If you decide not to increase your account
to the minimum balance, your account may be closed and the proceeds mailed to
you.

- - ADDITIONAL INFORMATION ABOUT REDEMPTIONS

- - Redemption proceeds from the sale of shares purchased by a check may be held
until the purchase check has cleared, which may take up to 15 days.

- - The Fund may suspend your right to redeem your shares in the following
circumstances:

- During non-routine closings of the NYSE;

- When the Securities and Exchange Commission (SEC) determines either that
trading on the NYSE is restricted or that an emergency prevents the sale or
valuation of the Fund's securities; or

- When the SEC orders a suspension to protect the Fund's shareholders.

- - The Fund will pay redemptions by any one shareholder during any 90-day period
in cash up to the lesser of $250,000 or 1% of its net assets. The Fund
reserves the right to pay the remaining portion "in kind," that is, in
portfolio securities rather than cash.

<PAGE>

[LOGO]

ORGANIZATION AND MANAGEMENT OF THE FUND

- - ABOUT VICTORY

The Fund is a member of the Victory Portfolios, a group of over 30 distinct
investment portfolios. The Board of Trustees of Victory has the overall
responsibility for the management of the Fund.

- - THE INVESTMENT ADVISER AND SUB-ADMINISTRATOR

The Fund has an Advisory Agreement which is one of its most important con-
tracts. Key Asset Management Inc. (KAM), a New York corporation registered as an
investment adviser with the SEC, is the Adviser to the Fund. KAM, a subsidiary
of KeyCorp, oversees the operations of the Fund according to investment policies
and procedures adopted by the Board of Trustees. Affiliates of the Adviser
manage approximately $77 billion for individual and institutional clients. KAM's
address is 127 Public Square, Cleveland, Ohio 44114.

For the fiscal year ended October 31, 1999, KAM was paid an advisory fee at
an annual rate of 0.51% of the Fund's average daily net assets.

Under a Sub-Administration Agreement, BISYS Fund Services Ohio, Inc. pays
KAM a fee at the annual rate of up to 0.05% of the Fund's average daily net
assets to perform some of the administrative duties for the Fund.

- - PORTFOLIO MANAGEMENT

William J. Leugers, Jr., Daniel R. Shick and Gary H. Miller have been the
co-portfolio managers of the Fund and its predecessor, the Gradison Established
Value Fund since 1984, 1993 and 1998, respectively, and together are primarily
responsible for the day-to-day management of the Fund's portfolio. Messrs.
Leugers and Shick are Portfolio Managers and Managing Directors of Gradison
McDonald. Mr. Miller has been a Vice President and Portfolio Manager of Gradison
McDonald since 1998; prior to which he was a Portfolio Trader with Gradison
McDonald since 1993. Messrs. Leugers, Shick and Miller are also co-portfolio
managers of the Victory Small Company Opportunity Fund.

WE WANT YOU TO KNOW WHO PLAYS WHAT ROLE IN YOUR INVESTMENT AND HOW THEY ARE
RELATED. THIS SECTION DISCUSSES THE ORGANIZATIONS EMPLOYED BY THE FUND TO
PROVIDE SERVICES TO ITS SHAREHOLDERS. EACH OF THESE ORGANIZATIONS IS PAID A FEE
FOR ITS SERVICES.

<PAGE>

[LOGO]

The Fund is supervised by the Board of Trustees which monitors the services
provided to investors

ORGANIZATION AND MANAGEMENT OF THE FUND (CONTINUED)

OPERATIONAL STRUCTURE OF THE FUND

Trustees Adviser

Shareholders

FINANCIAL SERVICES FIRMS AND
THEIR INVESTMENT PROFESSIONALS
Advise current and prospective
shareholders on their Fund investments.

TRANSFER AGENT/SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

Boston Financial Data Services
Two Heritage Drive
Quincy, MA 02171

Handles services such as record-keeping,
statements, processing of buy and sell
requests, distribution of dividends,
and servicing of shareholder accounts.

ADMINISTRATOR, DISTRIBUTOR, CUSTODIAN
AND FUND ACCOUNTANT Key Trust Company of Ohio, N.A.
BISYS Fund Services 127 Public Square
and its affiliates Cleveland, OH 44114
3435 Stelzer Road
Columbus, OH 43219 Provides for safekeeping of the
Fund's investments and cash, and
Markets the Fund, distributes shares settles trades made by the Fund.
through Investment Professionals,
and calculates the value of shares.
As Administrator, handles the
day-to-day activities of the Fund.

SUB-ADMINISTRATOR
Key Asset Management Inc.
127 Public Square
Cleveland, OH 44114

Performs certain
sub-administrative services.

<PAGE>

[LOGO]

ADDITIONAL INFORMATION

- - SHARE CLASSES

The Fund currently offers only the classes of shares described in this
Prospectus. At some future date, the Fund may offer additional classes of
shares.

[LOGO] PERFORMANCE

The Victory Funds may advertise the performance of the Fund by comparing it to
other mutual funds with similar objectives and policies. Performance information
also may appear in various publications. Any fees charged by Investment
Professionals may not be reflected in these performance calculations.
Advertising information will include the average annual total return of the Fund
calculated on a compounded basis for specified periods of time. Total return
information will be calculated according to rules established by the SEC. Such
information may include performance rankings and similar information from
independent organizations, such as Lipper, Inc., and industry publications such
as Morningstar Inc., Business Week, or Forbes. You also should see "Investment
Performance."

- - SHAREHOLDER COMMUNICATIONS

In order to eliminate duplicate mailings to an address at which two or more
shareholders with the same last name reside, the Fund will send only one copy of
any financial reports, prospectuses and their supplements.

SOME ADDITIONAL INFORMATION YOU SHOULD KNOW ABOUT THE FUND.

If you would like to receive additional copies of any materials, please call the
Fund at 800-539-FUND.

<PAGE>

[LOGO]

FINANCIAL HIGHLIGHTS ESTABLISHED VALUE FUND

The Financial Highlights table is intended to help you understand the Fund's
financial performance for the past five years. Certain information shows the
results of an investment in one share of the Fund. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions).

These financial highlights reflect historical information about Class G
Shares of the Fund. The financial highlights for the period from April 1, 1999
to October 31, 1999 were audited by PricewaterhouseCoopers LLP, whose report,
along with the financial statements of the Fund, are included in the Fund's
annual report, which is available by calling the Fund at 800-539-FUND. The
financial highlights for the four fiscal years and one period ended March 31,
1999 were audited by Arthur Andersen LLP.

CLASS G SHARES

APR. 1, 1999 YEAR YEAR YEAR YEAR 11 MONTHS
TO ENDED ENDED ENDED ENDED ENDED
OCT. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999(a) 1999 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 31.34 $ 33.94 $ 28.83 $ 27.57 $ 23.38 $ 22.52
- ----------------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) 0.02 0.29 0.46 0.44 0.44 0.38
Net realized and unrealized gains
(losses) from investments 2.98 (0.71) 7.70 3.62 5.19 1.52
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Activities 3.00 (0.42) 8.16 4.06 5.63 1.90
- ----------------------------------------------------------------------------------------------------------------------------
Distributions
Net investment income (0.03) (0.30) (0.48) (0.45) (0.43) (0.37)
Net realized gains -- (1.88) (2.57) (2.35) (1.01) (0.66)
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.03) (2.18) (3.05) (2.80) (1.44) (1.03)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 34.31 $ 31.34 $ 33.94 $ 28.83 $ 27.57 $ 23.39
- ----------------------------------------------------------------------------------------------------------------------------
Total Return 9.59%(b) (1.01)% 29.67% 15.14% 24.84% 8.85%(b)

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) $ 469,288 $ 478,984 $ 567,255 $ 429,726 $ 366,417 $ 277,370
Ratio of expenses to average net assets (d) 1.10%(c) 1.09% 1.10% 1.12% 1.15% 1.20%(c)
Ratio of net investment income
to average net assets (d) 0.03%(c) 0.92% 1.44% 1.57% 1.70% 1.87%(c)
Ratio of expenses to average net assets(*) 1.27%(c) (e) (e) (e) (e) (e)
Ratio of net investment income
to average net assets(*) (0.14)%(c) (e) (e) (e) (e) (e)
Portfolio turnover 11% 37% 20% 31% 18% 24%

</TABLE>

(*) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) Effective April 1, 1999, the Gradison Established Value Fund became the
Victory Established Value Fund. Financial highlights prior to April 1,1999
represent the Gradison Established Value Fund.
(b) Not annualized.
(c) Annualized.
(d) On April 1, 1999, the Adviser agreed to waive its management fee or to
reimburse expenses, as allowed by law, to the extent necessary to maintain
the net operating expenses of the Class G shares of the Fund at a maximum of
1.10% until at least April 1, 2001.
(e) There were no fee reductions during the period.

<PAGE>

----------------
The Victory Funds Bulk Rate
127 Public Square U.S. Postage
OH-01-27-1612 PAID
Cleveland, Ohio 44114 Cleveland, OH
Permit No. 469
----------------

IF YOU WOULD LIKE A FREE COPY OF ANY OF THE FOLLOWING DOCUMENTS OR WOULD
LIKE TO REQUEST OTHER INFORMATION REGARDING THE FUND, YOU CAN CALL OR WRITE
THE FUND OR YOUR INVESTMENT PROFESSIONAL.

STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more details describing the Fund and its policies. The SAI has been
filed with the Securities and Exchange Commission (SEC), and is incorporated by
reference in this Prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS
Describes the Fund's performance, lists portfolio holdings, and discusses market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

THE SECURITIES DESCRIBED IN THIS PROSPECTUS AND THE SAI ARE NOT OFFERED IN ANY
STATE IN WHICH THEY MAY NOT LAWFULLY BE SOLD. NO SALES REPRESENTATIVE, DEALER,
OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND THE SAI.

HOW TO OBTAIN INFORMATION

BY TELEPHONE: Call Victory Funds at 800-539-FUND (800-539-3863). You also may
obtain copies of materials from the SEC's Public Reference Room in Washington,
D.C. (Call 1-202-942-8090 for information on the operation of the SEC's Public
Reference Room.)

By mail: The Victory Funds
P. O. Box 8527
Boston, MA 02266-8527

Copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following E-mail address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20459-0102.

ON THE INTERNET: Text only versions of Fund documents can be viewed on-line or
downloaded from the SEC at HTTP://WWW.SEC.GOV or from the Victory Funds' website
at HTTP://WWW.VICTORYFUNDS.COM.

If you would like to receive copies of the
annual and semi-annual reports and/or the
SAI at no charge, please call the Fund at
800-539-FUND.
(800-539-3863)

[Logo Key]
VICTORY FUNDS

Investment Company Act File Number. 811-4852

<PAGE>

[LOGO]

VICTORY FUNDS
January 31, 2000
PROSPECTUS

GRADISON
GOVERNMENT
RESERVES FUND
CLASS G SHARES

800-539-FUND
(800-539-3863)

or visit the Victory Funds' website at:
www.victoryfunds.com

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Fund's securities or determined whether this
Prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.

<PAGE>

TABLE OF CONTENTS

RISK/RETURN SUMMARY OF THE FUND 2
An analysis which includes the investment objective,
principal strategies, principal risks, performance,
and expenses.

INVESTMENTS 4

RISK FACTORS 5

SHARE PRICE 5

DIVIDENDS, DISTRIBUTIONS, AND TAXES 6

INVESTING WITH VICTORY 8
- How to Buy Shares 8
- How to Exchange Shares 11
- How to Sell Shares 12

ORGANIZATION AND MANAGEMENT OF THE FUND 13

ADDITIONAL INFORMATION 15

FINANCIAL HIGHLIGHTS 16

THE VICTORY PORTFOLIOS

KEY TO FUND INFORMATION

[ICON] OBJECTIVE AND STRATEGIES
The goals and the strategies that the Fund plans to use to pursue its investment
objective.

[ICON] RISK FACTORS
The risks you may assume as an investor in the Fund.

[ICON] PERFORMANCE
A summary of the historical performance of the Fund.

[ICON] EXPENSES
The costs you will pay, directly or indirectly, as an investor in the Fund,
including ongoing expenses.

SHARES OF THE FUND ARE:

- NOT INSURED BY THE FDIC;

- NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY KEYBANK, ANY OF ITS
AFFILIATES, OR ANY OTHER BANK;

- SUBJECT TO POSSIBLE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE
AMOUNT INVESTED.

ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.

<PAGE>

GRADISON GOVERNMENT RESERVES FUND RISK/RETURN SUMMARY

[ICON] INVESTMENT OBJECTIVE

The Fund's investment objective is to maximize current income to the extent
consistent with the preservation of capital and the maintenance of liquidity.

[ICON] PRINCIPAL INVESTMENT STRATEGIES

The Fund pursues its investment objective by investing only in securities issued
by the U.S. government, its agencies and/or instrumentalities, including
floating and variable rate securities. Securities issued by U.S. government
instrumentalities are supported only by the credit of the federal
instrumentality. See the "Investments" section for a description of these
securities. The Fund intends to invest primarily, and may invest exclusively, in
these instruments. The Fund plans, as much as possible, to invest in securities
whose interest payments are exempt from state and local taxes.

IMPORTANT CHARACTERISTICS OF THE FUND:

- QUALITY: The Fund invests only in U.S. government securities, including
agencies and instrumentalities of the U.S. government. The Board of
Trustees has established policies to ensure that the Fund invests in high
quality, liquid instruments.

- MATURITY: The Fund has a weighted average maturity of 90 days or less.
Individual investments may be purchased with remaining maturities ranging
from one day to 397 days. Variable and floating rate instruments are
considered to be within the maturity range described above, despite having
nominal remaining maturities greater than 397 days, because of their reset
or floating rate features.

[ICON] PRINCIPAL RISKS

You may lose money by investing in the Fund. The Fund is subject to the
following principal risks, more fully described in "Risk Factors." The Fund's
yield or the stability of its $1.00 share price may be adversely affected if any
of the following occurs:

- The portfolio manager does not execute the Fund's principal investment
strategies effectively.

- The market value of floating or variable rate securities falls to such an
extent that the Fund's share price declines below $1.00.

- Rapidly rising interest rates cause securities held by the Fund to decline
in value and cause the Fund's share price to decline below $1.00.

- Interest rates decline, resulting in a lower yield for the Fund.

An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.

WHO MAY WANT TO INVEST IN THE FUND:

- Investors seeking relative safety and easy access to investments

- Investors with a low risk tolerance

- Investors seeking preservation of capital

- Investors willing to accept lower potential returns in return for safety

- Investors seeking the ability to convert their investment to cash quickly

<PAGE>

GRADISON GOVERNMENT RESERVES FUND RISK/RETURN SUMMARY

[ICON] INVESTMENT PERFORMANCE

[BAR GRAPH]

PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.

During the period shown in the bar chart, the highest return for a quarter was
1.90% (quarters ending March 31, 1990 and June 30, 1990) and the lowest return
for a quarter was 0.60% (quarter ending September 30, 1993).

AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDED PAST PAST PAST
DECEMBER 31,1999) ONE YEAR 5 YEARS 10 YEARS

4.51% 4.86% 4.66%

The Fund's seven-day yield as of December 31, 1999 was 5.04%. The "seven-day
yield" is an annualized figure -- the amount you would earn if you kept your
investment in the Fund and the Fund continued to earn the same net interest
income throughout the year.

The Fund's seven-day effective yield as of December 31, 1999, was 5.16%. The
"seven-day effective yield" (also an annualized figure) assumes that dividends
are reinvested and compounded.

For the Fund's current seven-day yield and seven-day effective yield, call
the Fund at 800-539-FUND (800-539-3863).

[ICON] FUND EXPENSES

This section describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.

SHAREHOLDER TRANSACTION EXPENSES
(PAID DIRECTLY FROM YOUR INVESTMENT)(1)

Maximum Sales Charge
Imposed on Purchases NONE
(as a percentage of offering price)

Maximum Deferred
Sales Charge (as a percentage of NONE
the lower of purchase or sale price)

Maximum Sales Charge Imposed
on Reinvested Dividends NONE

Redemption Fees NONE

Exchange Fees NONE

ANNUAL FUND OPERATING EXPENSES
(DEDUCTED FROM FUND ASSETS)

Management Fees 0.44%

Distribution (12b-1) Fees 0.10%

Other Expenses 0.23%

Total Fund Operating Expenses 0.77%

Fee Waiver/Reimbursement (0.05)%

Net Expenses 0.72%(2)

(1)You may be charged additional fees if you buy, exchange, or sell shares
through a broker or agent.
(2)KAM has contractually agreed to waive its management fee or to reimburse
expenses, as allowed by law, to the extent necessary to maintain the net
operating expenses of Class G Shares of the Fund at a maximum of 0.72% until at
least April 1, 2001.

1 YEAR 3 YEARS 5 YEARS 10 YEARS
$74 $241 $423 $951

(1)This Example assumes that net annual operating expenses for the Fund will
equal 0.72% until April 1, 2001 and will equal 0.77% thereafter.

<PAGE>

[ICON]

INVESTMENTS

Under normal market conditions, the Fund purchases securities issued by the U.S.
government, its agencies and/or instrumentalities.

For cash management or for temporary defensive purposes in response to market
conditions, the Fund may hold all or a portion of its assets in cash. This may
reduce the Fund's yield and may cause the Fund to fail to meet its investment
objective.

For a more complete description of the types of securities in which the Fund
can invest, see the Statement of Additional Information (SAI).

The Fund may invest in the following types of securities:

U.S. GOVERNMENT SECURITIES. Notes and bonds issued or guaranteed by the
U.S. government, its agencies, or instrumentalities. Some are direct
obligations of the U.S. Treasury; others are obligations only of the U.S.
agency or instrumentality.

U.S. GOVERNMENT INSTRUMENTALITIES. Securities issued by U.S. government
instrumentalities such as the Student Loan Marketing Association, Federal
Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage
Corporation, and the Federal Agricultural Mortgage Corporation are
supported only by the credit of the federal instrumentality. The Fund
intends to invest primarily, and may invest exclusively, in these
instruments.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES. A security that is purchased
for delivery at a later time. The market value may change before the
delivery date, and the value is included in the net asset value of the
Fund.

* VARIABLE & FLOATING RATE SECURITIES. The interest rate offered by a
variable rate security adjusts (resets) on particular dates (such as the
last day of a month or calendar quarter). The interest rate offered by a
floating rate security adjusts whenever a specified interest rate (such as
a bank's prime lending rate) changes. Upon adjustment, the market value of
a variable or floating rate security can reasonably be expected to equal
its amortized cost.

* Derivative Instruments: Indicates a "derivative instrument," whose value
is linked to, or derived from another security, instrument, or index.

<PAGE>

[ICON] RISK FACTORS

The Fund is subject to the principal risks described below.

GENERAL RISKS:

- - MANAGER RISK is the risk that the Fund's portfolio manager may implement the
Fund's investment strategy in a way that does not produce the intended
result.

RISKS ASSOCIATED WITH INVESTING IN DEBT SECURITIES:

- - INCOME RISK. Declines in the general level of short-term interest rates cause
the Fund's income, and thus its total return, to decline.

- - ADJUSTABLE RATE SECURITY RISK. The market price of an adjustable rate
security may, upon readjustment, fall below its cost.

[ICON]

BY MATCHING YOUR INVESTMENT OBJECTIVE WITH AN ACCEPTABLE LEVEL OF RISK, YOU CAN
CREATE YOUR OWN CUSTOMIZED INVESTMENT PLAN.

An investment in the Fund is not a complete investment program.

SHARE PRICE

The Fund calculates its share price, called its "net asset value" (NAV), each
business day at 12:00 p.m. Eastern Time. You may buy, exchange, and sell your
shares on any business day at a price that is based on the NAV that is
calculated after you place your order. A business day is a day on which the
Federal Reserve Bank of Cleveland and the New York Stock Exchange, Inc. ("NYSE")
are open. You may not be able to buy or sell shares on Columbus Day and Veterans
Day, holidays when the Federal Reserve Bank of Cleveland is closed, but the NYSE
and other financial markets are open.

The Fund seeks to maintain a $1.00 NAV, although there is no guarantee that
it will be able to do so. The Fund uses the "Amortized Cost Method" to value
securities. You can read about this method in the SAI.

The Fund's performance can be found once a week in The Wall Street Journal
and other newspapers.

<PAGE>

DIVIDENDS, DISTRIBUTIONS, AND TAXES

As a shareholder, you are entitled to your share of net income and capital gains
on the Fund's investments. The Fund passes its earnings along to investors in
the form of dividends. Dividend distributions are the net income earned on
investments after expenses. Money market funds usually do not realize capital
gains; however, the Fund will distribute short-term gains, as necessary, and if
the Fund makes a long-term capital gain distribution, it is normally paid once a
year. As with any investment, you should consider the tax consequences of an
investment in the Fund.

Ordinarily, the Fund declares dividends daily and pays them monthly.

Please check with your Investment Professional to find out if these options
are available to you. An Investment Professional is an investment consultant,
salesperson, financial planner, investment adviser, or trust officer who
provides you with investment information.

Distributions can be received in one of the following ways.

REINVESTMENT OPTION

You can have distributions automatically reinvested in additional shares of
the Fund. If you do not indicate another choice on your Account Application,
you will be assigned this option automatically.

CASH OPTION

A check will be mailed to you no later than seven days after the dividend pay
date.

DIRECTED DIVIDENDS OPTION

In most cases, you can automatically reinvest distributions in shares of
another fund of The Victory Portfolios. If you reinvest your distributions in
a different class of another fund, you may pay a sales charge on the
reinvested distributions.

DIRECTED BANK ACCOUNT OPTION

In most cases, you can automatically transfer distributions to your bank
checking or savings account. Under normal circumstances, the Fund will
transfer your distributions within seven days of the dividend payment date.
The bank account must have a registration identical to that of your Fund
account.

[ICON]

YOUR CHOICE OF DISTRIBUTION SHOULD BE SET UP ON THE ORIGINAL ACCOUNT
APPLICATION. IF YOU WOULD LIKE TO CHANGE THE OPTION YOU SELECTED, PLEASE CALL
THE FUND AT 800-539-FUND.

<PAGE>

DIVIDENDS, DISTRIBUTIONS, AND TAXES (CONTINUED)

- - IMPORTANT INFORMATION ABOUT TAXES

The Fund pays no federal income tax on the earnings and capital gains it
distributes to shareholders.

- - Ordinary dividends from the Fund are taxable as ordinary income; dividends
from any long-term capital gains would be taxable as capital gain.

- - Dividends are treated in the same manner for federal income tax purposes
whether you receive them in cash or in additional shares. They also may be
subject to state and local taxes.

- - An exchange of the Fund's shares for shares of another fund will be treated
as a sale. When you sell or exchange shares of the Fund, you must recognize
any gain or loss. However, as long as the Fund's NAV per share does not
deviate from $1.00, there will be no gain or loss.

- - Certain dividends paid to you in January will be taxable as if they had been
paid to you the previous December.

- - Tax statements will be mailed from the Fund every January showing the amounts
and tax status of distributions made to you.

- - Because your tax treatment depends on your purchase price and tax position,
you should keep your regular account statements for use in determining your
tax.

- - You should review the more detailed discussion of federal income tax
considerations in the SAI.

[ICON]

THE TAX INFORMATION IN THIS PROSPECTUS IS PROVIDED AS GENERAL INFORMATION. YOU
SHOULD CONSULT YOUR OWN TAX ADVISER ABOUT THE TAX CONSEQUENCES OF AN INVESTMENT
IN THE FUND.

<PAGE>

[ICON]

INVESTING WITH VICTORY

If you are looking for a convenient way to open an account or to add money to an
existing account, Victory can help. The sections that follow will serve as a
guide to your investments with Victory. The following sections will describe how
to open an account, how to access information on your account, and how to buy,
exchange, and sell shares of the Fund. We want to make it simple for you to do
business with us. If you have questions about any of this information, please
call your Investment Professional or one of our customer service representatives
at 800-539-FUND. They will be happy to assist you.

All you need to do to get started is to fill out an application.

- - DISTRIBUTION AND SERVICE PLAN

In accordance with Rule 12b-1 under the Investment Company Act of 1940, Victory
has adopted a Distribution and Service Plan for Class G Shares of the Fund,
under which these shares will pay to the Distributor a monthly distribution fee
at an annual rate of 0.10% of the average daily net assets of the Fund. The fee
is paid to securities broker dealers or other financial intermediaries for
providing personal services to shareholders of the Fund, including responding to
inquiries, providing information to shareholders about their fund accounts,
establishing and maintaining accounts and records, processing dividend and
distribution payments, arranging for bank wires, assisting in transactions, and
changing account information. The Fund may enter into agreements with various
shareholder servicing agents, including KeyCorp and its affiliates, and with
other financial institutions that provide such services.

Because Rule 12b-1 fees are paid out of the Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

FOR HISTORICAL EXPENSE INFORMATION ON THE FUND'S CLASS G SHARES, SEE THE
FINANCIAL HIGHLIGHTS AT THE END OF THIS PROSPECTUS.

HOW TO BUY SHARES

You can buy shares in a number of different ways. All you need to do to get
started is to fill out an application. The minimum investment required to open
an account is $500 ($100 for IRAs), with additional investments of at least $25.
There is no minimum investment required to open an account or for additional
investments in SIMPLE IRAs. You can send in your payment by check, wire
transfer, exchange from another Victory Fund, or through arrangements with your
Investment Professional. Sometimes an Investment Professional will charge you
for these services. This fee will be in addition to, and unrelated to, the fees
and expenses charged by the Fund. If you maintain a brokerage account with the
Gradison McDonald Division of McDonald Investments Inc. ("Gradison-McDonald") or
McDonald Investments Inc., you may buy or sell Fund shares without incurring any
additional fees.

If you buy shares directly from the Fund and your investment is received and
accepted by 12:00 p.m. Eastern Time, your purchase will be processed the same
day using that day's share price.

MAKE YOUR CHECK PAYABLE TO:
THE VICTORY FUNDS

WHEN YOU BUY SHARES OF THE FUND, YOUR COST WILL NORMALLY BE $1.00 PER SHARE.

<PAGE>

[ICON]

HOW TO BUY SHARES (CONTINUED)

Keep the following addresses handy for purchases, exchanges, or redemptions:

<TABLE>
<CAPTION>
[ICON] BY REGULAR U.S. MAIL
<S> <C> <C>
Send completed Account The Victory Funds or The Victory Funds
Applications with your check, c/o Gradison McDonald P.O.Box 8527
bank draft, or money order to: 580 Walnut Street Boston, MA 02266-8527
Cincinnati, OH 45202

[ICON] BY OVERNIGHT MAIL

Use the following address The Victory Funds or The Victory Funds
ONLY for overnight packages. c/o Gradison McDonald c/o Boston Financial Data Services
580 Walnut Street 66 Brooks Drive
Cincinnati, OH 45202 Braintree, MA 02184
PHONE: 800-539-FUND PHONE: 800-539-FUND

[ICON] BY WIRE

The Transfer Agent may charge a The Victory Funds or The Victory Funds
wire fee of $10 for wires under c/o Gradison McDonald State Street Bank and Trust Co.
$50,000, and your originating Firstar Bank ABA #011000028
bank may charge a fee. Always ABA #042000013 For Credit to DDA
call 800-539-FUND BEFORE Account #9905-201-1
wiring funds to obtain a For Credit to DDA (insert account number, name,
confirmation number. Account #9307398 and confirmation number
(insert account number and assigned by the Transfer Agent)
name)

[ICON] BY TELEPHONE

Victory Funds Service Center
800-539-FUND
(800-539-3863)
</TABLE>

<PAGE>

[ICON]

HOW TO BUY SHARES (CONTINUED)

- - ACH
After your account is set up, your purchase amount can be transferred by
Automated Clearing House (ACH). Only domestic member banks may be used. It takes
about 15 days to set up an ACH account. Currently, the Fund does not charge a
fee for ACH transfers.

- - STATEMENTS AND REPORTS

You will receive a periodic statement reflecting any transactions that affect
the balance or registration of your account. If your account has been set up by
an Investment Professional, Fund activity will be detailed in that account's
statements. Share certificates are not issued. Twice a year, you will receive
the financial reports of the Fund. By January 31 of each year, you will be
mailed an IRS form reporting distributions for the previous year, which also
will be filed with the IRS.

- - AUTOMATIC AND SYSTEMATIC INVESTMENT PLAN

To enroll in the Automatic or Systematic Investment Plan, you should complete a
separate Automatic Investment Plan Application. We will need your bank
information and the amount and frequency of your investment. You can select
monthly, quarterly, semi-annual, or annual investments. You should attach a
voided personal check so the proper information can be obtained. You must first
meet the minimum investment requirement of $500 ($100 for IRA accounts), then we
will make automatic withdrawals of the amount you indicate ($25 or more) from
your bank account and invest it in shares of the Fund.

- - RETIREMENT PLANS

All purchases must be made in U.S. dollars and drawn on U.S. banks. The Transfer
Agent may reject any purchase order in its sole discretion. If your check is
returned for any reason, you will be charged for any resulting fees and/or
losses. Third party checks will not be accepted. You may only buy or exchange
into fund shares legally available in your state. If your account falls below
$500 ($100 for IRA's), we may ask you to re-establish the minimum investment. If
you do not do so within 60 days, we may close your account and send you the
value of your account.

<PAGE>

HOW TO EXCHANGE SHARES

You can sell shares of one fund of the Victory Portfolios to buy shares of
another. This is considered an exchange. You may exchange shares of one Victory
fund for shares of the same class of any other.

[ICON]

YOU CAN OBTAIN A LIST OF FUNDS AVAILABLE FOR EXCHANGE BY CALLING 800-539-FUND.

You can exchange shares of the Fund by writing the Transfer Agent or calling
800-539-FUND. When you exchange shares of the Fund, you should keep the
following in mind:

- - Shares of the fund selected for exchange must be available for sale in your
state of residence.

- - The fund whose shares you want to exchange and the fund whose shares you want
to buy must offer the exchange privilege.

- - If you own Class G Shares of the Fund, you can exchange them for Class G
Shares, Select shares, or any single class money market fund shares of a
Victory Fund and not pay a sales charge. Holders of Class G Shares who
acquired their shares as a result of the reorganization of the Gradison Funds
into the Victory Funds can exchange into Class A Shares of any Victory Fund
that does not offer Class G Shares without paying a sales charge.

- - If you acquire Class A Shares of a fund as a result of an exchange, you pay
the percentage point difference, if any, between the sales charge of the fund
acquired and the sales charge you previously paid in connection with the
shares you are exchanging.

- - You must meet the minimum purchase requirements for the fund you purchase by
exchange.

- - The registration and tax identification numbers of the two accounts must be
identical.

- - Exchange orders will be accepted up to 4:00 p.m. Eastern Time.

- - You must hold the shares you buy when you establish your account for at least
seven days before you can exchange them; after the account is open seven
days, you can exchange shares on any business day.

- - Before exchanging, read the prospectus of the fund you wish to purchase by
exchange. An exchange of Fund shares constitutes a sale for tax purposes.

<PAGE>

HOW TO SELL SHARES

If your request is received in good order by 12:00 p.m. Eastern Time, your
redemption will be processed the same day.

[ICON]

THERE ARE A NUMBER OF CONVENIENT WAYS TO SELL YOUR SHARES. YOU CAN USE THE SAME
MAILING ADDRESSES LISTED FOR PURCHASES.

[ICON] BY TELEPHONE

The easiest way to sell shares is by calling 800-539-FUND. When you fill out
your original application, be sure to check the box marked "Telephone
Authorization." Then when you are ready to sell, call and tell us which one of
the following options you would like to use:

- Mail a check to the address of record;

- Wire funds to a domestic financial institution;

- Mail a check to a previously designated alternate address; or

- Electronically transfer your redemption via the Automated Clearing House
(ACH).

The Transfer Agent records all telephone calls for your protection and takes
measures to verify the identity of the caller. If the Transfer Agent properly
acts on telephone instructions and follows reasonable procedures to ensure
against unauthorized transactions, neither Victory, its servicing agents, the
Adviser, nor the Transfer Agent will be responsible for any losses. If the
Transfer Agent does not follow these procedures, it may be liable to you for
losses resulting from unauthorized instructions.

If there is an unusual amount of market activity and you cannot reach the
Transfer Agent or your Investment Professional by telephone, consider placing
your order by mail.

[ICON] BY MAIL

Use the Regular U.S. Mail or Overnight Mail Address to redeem shares. Send us a
letter of instruction indicating your Fund account number, amount of redemption,
and where to send the proceeds. A signature guarantee is required for the
following redemption requests:

- Redemptions over $10,000;

- Your account registration 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;

- The redemption proceeds are being transferred to another Victory Group
account with a different registration; or

- The check or wire is being sent to a different bank account.

You can get a signature guarantee from a financial institution such as a bank,
broker-dealer, credit union, clearing agency, or savings association.

[ICON] BY WIRE

If you want to receive your proceeds by wire, you must establish a Fund account
that will accommodate wire transactions. If you call by 12:00 p.m. Eastern Time,
your funds will be wired on the next business day. There is a $10 wire fee for
amounts less than $50,000.

[ICON] BY ACH

Normally, your redemption will be processed on the same day but will be
processed on the next day if received after 12:00 p.m. Eastern Time. It will be
transferred by ACH as long as the transfer is to a domestic bank.

[ICON] CHECK WRITING

You may withdraw funds by writing a check for $100 or more without paying any
fees. Checks also may be written in amounts of less than $100, in which case you
will be charged a fee of $0.30 per check, which reimburses the Fund for expenses
associated with clearing these

<PAGE>

HOW TO SELL SHARES (CONTINUED)

checks. Shares continue to earn daily dividends until these checks are presented
for payment. In order to activate the check writing option on your account, all
owners on the account must sign a signature card. The names of payees of checks
and the date checks are cashed appear on monthly transaction statements. You may
not close your account by writing a check. Please call the Fund for a complete
redemption.

- - SYSTEMATIC WITHDRAWAL PLAN

If you check this box on the Account Application, we will send monthly,
quarterly, semi-annual, or annual payments to the person you designate. The
minimum withdrawal is $25, and you must have a balance of $5,000 or more. If the
payment is to be sent to a bank account of yours, we will need a voided personal
check to activate this feature. If the payment is to be made to an address
different from your account address, we will need a signature guaranteed letter
of instruction. You should be aware that your account eventually may be
depleted. However, you cannot automatically close your account using the
Systematic Withdrawal Plan. If your balance falls below $500, we may ask you to
bring the account back to the minimum balance. If you decide not to increase
your account to the minimum balance, your account may be closed and the proceeds
mailed to you.

- - ADDITIONAL INFORMATION ABOUT REDEMPTIONS

- - Redemption proceeds from the sale of shares purchased by a check may be held
until the purchase check has cleared, which may take up to 15 days.

- - If you request a complete redemption the Fund will include any dividends
accrued with the redemption proceeds.

- - The Fund may suspend your right to redeem your shares in the following
circumstances:

- During non-routine closings of the NYSE;

- When the Securities and Exchange Commission (SEC) determines either that
trading on the NYSE is restricted or that an emergency prevents the sale
or valuation of the Fund's securities; or

- When the SEC orders a suspension to protect the Fund's shareholders.

[ICON]

ORGANIZATION AND MANAGEMENT OF THE FUND

- - ABOUT VICTORY

The Fund is a member of the Victory Portfolios, a group of over 30 distinct
investment portfolios. The Board of Trustees of Victory has the overall
responsibility for the management of the Fund.

- - THE INVESTMENT ADVISER AND SUB-ADMINISTRATOR

The Fund has an Advisory Agreement which is one of its most important contracts.
Key Asset Management Inc. (KAM), a New York corporation registered as an
investment adviser with the SEC, is the Adviser to the Fund. KAM, a subsidiary
of KeyCorp, oversees the operations of the Fund according to investment policies
and procedures adopted by the Board of Trustees. Affiliates of the Adviser
manage approximately $77 billion for individual and institutional clients. KAM's
address is 127 Public Square, Cleveland, Ohio 44114.

For the fiscal year ended October 31, 1999, KAM was paid an advisory fee at
an annual rate of 0.44% of the Fund's average daily net assets.

Under a Sub-Administration Agreement, BISYS Fund Services Ohio, Inc. pays KAM
a fee at the annual rate of up to 0.05% of the Fund's average daily net assets
to perform some of the administrative duties for the Fund.

Gradison-McDonald, an affiliate of the Adviser, acts as an administrative
agent to the Fund and is paid a fee for performing those services.

<PAGE>

ORGANIZATION AND MANAGEMENT OF THE FUND (CONTINUED)

OPERATIONAL STRUCTURE OF THE FUND

Handles services such as record-keeping,
statements, processing of buy and sell
requests, distribution of dividends,
and servicing of shareholder accounts.
|
ADMINISTRATOR, DISTRIBUTOR, | CUSTODIAN
AND FUND ACCOUNTANT |
| Key Trust Company of Ohio, N.A.
BISYS Fund Services | 127 Public Square
and its affiliates |---------- Cleveland, OH 44114
3435 Stelzer Road |
Columbus, OH 43219 ------------| Provides for safekeeping of the
Fund's investments and cash, and
settles trades made by the Fund.
Markets the Fund, distributes shares
through Investment Professionals,
and calculates the value of shares.
As Administrator, handles the
day-to-day activities of the Fund.
|
SUB-ADMINISTRATOR

Key Asset Management Inc.
127 Public Square
Cleveland, OH 44114

Performs certain
sub-administrative services.

[ICON]

The Fund is supervised by the Board of Trustees which monitors the services
provided to investors.

<PAGE>

ADDITIONAL INFORMATION

- - SHARE CLASSES
The Fund currently offers only the class of shares described in this Prospectus.
At some future date, the Fund may offer additional classes of shares.

[ICON] PERFORMANCE

The Victory Funds may advertise the performance of the Fund by comparing it to
other mutual funds with similar objectives and policies. Performance information
also may appear in various publications. Any fees charged by Investment
Professionals may not be reflected in these performance calculations.
Advertising information may include the yield and effective yield of the Fund,
and the average annual total return of the Fund calculated on a compounded basis
for specified periods of time. Yield and total return information will be
calculated according to rules established by the SEC. Such information may
include performance rankings and similar information from independent
organizations, such as Lipper, Inc., and industry publications such as
Morningstar, Inc., Business Week, or Forbes.

- - SHAREHOLDER COMMUNICATIONS

[ICON]

SOME ADDITIONAL INFORMATION YOU SHOULD KNOW ABOUT THE FUND.

If you would like to receive additional copies of any materials, please call the
Fund at 800-539-FUND.

<PAGE>

[ICON] FINANCIAL HIGHLIGHTS GRADISON GOVERNMENT RESERVES FUND

These financial highlights reflect historical information about Class G
shares of the Fund. The financial highlights for the period from October 1, 1999
to October 31, 1999 and the fiscal year ended September 30, 1999 were audited by
PricewaterhouseCoopers LLP, whose report, along with the financial statements of
the Fund, is included in the Fund's annual report, which is available by calling
the Fund at 800-539-FUND. The financial highlights for the four fiscal years
ended September 30, 1998 were audited by Arthur Andersen LLP.

<TABLE>
<CAPTION>
CLASS G SHARES

ONE MONTH YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
OCT. 31, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1999 1999(a) 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.004 0.044 0.049 0.047 0.047 0.050
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Activities 0.004 0.044 0.049 0.047 0.047 0.050
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions
Net investment income (0.004) (0.044) (0.049) (0.047) (0.047) (0.050)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.004) (0.044) (0.049) (0.047) (0.047) (0.050)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 0.39%(b) 4.46% 4.98% 4.85% 4.86% 5.10%

RATIOS/SUPPLEMENTAL DATA:
Net Assets,
End of Period (000) $2,028,020 $2,018,755 $1,933,824 $1,610,058 $1,333,063 $1,224,129
Ratio of expenses to
average net assets(d) 0.72%(c) 0.71% 0.72% 0.72% 0.75% 0.78%
Ratio of net investment income
to average net assets(d) 4.61%(c) 4.34% 4.86% 4.75% 4.72% 5.00%
Ratio of expenses to
average net assets* 0.84%(c) 0.77% 0.73% 0.73% 0.76% 0.80%
Ratio of net investment income
to average net assets* 4.49%(c) 4.28% 4.85% 4.74% 4.71% 4.98%
</TABLE>

* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.

(a) Effective April 1, 1999, Gradison U.S. Government Reserves became the
Victory Gradison Government Reserves Fund. Financial highlights prior to
April 1, 1999 represent Gradison U.S. Government Reserves.

(b) Not annualized.

(d) Effective April 1, 1999, the Adviser agreed to waive its management fee or
to reimburse expenses, as allowed by law, to the extent necessary to
maintain the net operating expenses of the Class G shares of the Fund at a
maximum of 0.72% until at least April 1, 2001.

<PAGE>

The Victory Funds Bulk Rate
127 Public Square U.S. Postage
OH-01-27-1612 PAID
Cleveland, Ohio 44114 Cleveland, OH
Permit No. 469

If you would like a FREE copy of any of the following documents or would like to
request other information regarding the Fund, you can call or write the Fund or
your Investment Professional.

- - STATEMENT OF ADDITIONAL INFORMATION (SAI)

Contains more details describing the Fund and its policies. The SAI has been
filed with the Securities and Exchange Commission (SEC), and is incorporated by
reference in this Prospectus.

- - ANNUAL AND SEMI-ANNUAL REPORTS

Describes the Fund's performance, lists portfolio holdings, and discusses market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

- - HOW TO OBTAIN INFORMATION

BY MAIL: The Victory Funds
P.O. Box 8527
Boston, MA 02266-8527

ON THE INTERNET: Text only versions of Fund documents can be viewed on-line or
downloaded from the SEC at http://www.sec.gov or from the Victory Funds' website
at http://www.victoryfunds.com.

The securities described in this Prospectus and the SAI are not offered in any
state in which they may not lawfully be sold. No sales representative, dealer,
or other person is authorized to give any information or make any representation
other than those contained in this Prospectus and the SAI.

If you would like to receive copies of the
annual and semi-annual reports and/or the
SAI at no charge, please call the Fund at

800-539-FUND.
(800-539-3863)

[LOGO]
VICTORY FUNDS

Investment Company Act File Number. 811-4852

<PAGE>
THE VICTORY PORTFOLIOS

Gradison Government Reserves Fund

Established Value Fund

Supplement dated January 18, 2000 To the Statement of Additional
Information dated April 5, 1999
As amended July 28, 1999

1. On page 6, in the section entitled "Instruments in which the Funds can
invest," insert the following information before the first full paragraph.

Secondary Investment Strategies - Established Value Fund. In addition to the
principal strategies described in the Prospectus, the Established Value Fund may
invest up to 20% of its total assets in short-term U.S. government obligations,
repurchase agreements, other money market obligations and investment grade debt
securities.

2. On page 19, in the section entitled "Additional Purchase, Exchange, and
Redemption Information," insert the following information after the heading
"Purchasing Shares."

Alternative Sales Arrangements -- Established Value Fund -- Class A and Class G
Shares. Each of the two classes of shares represents interests in the same
portfolio investments of the Established Value Fund. However, each class has
different shareholder privileges and features. The net income attributable to
Class A and Class G shares and the dividends payable on these shares will be
reduced by incremental expenses borne solely by Class A and Class G shares,
respectively, including the asset-based sales charge to which these shares are
subject.

The methodology for calculating the net asset value, dividends and distributions
of the Fund's Class A and Class G shares recognizes two types of expenses.
General expenses that do not pertain specifically to a class are allocated to
the shares of each class, based upon the percentage that the net assets of such
class bears to a Fund's total net assets, and then pro rata to each outstanding
share within a given class. Such general expenses include (1) management fees,
(2) legal, bookkeeping and audit fees, (3) printing and mailing costs of
shareholder reports, prospectuses, statements of additional information and
other materials for current shareholders, (4) fees to the Trustees who are not
affiliated with the Adviser, (5) custodian expenses, (6) share issuance costs,
(7) organization and start-up costs, (8) interest, taxes and brokerage
commissions, and (9) non-recurring expenses, such as litigation costs. Other
expenses that are directly attributable to a class are allocated equally to each
outstanding share within that class. Such expenses include (1) Rule 12b-1
distribution fees and shareholder servicing fees, (2) incremental transfer and
shareholder servicing agent fees and expenses, (3) registration fees, and (4)
shareholder meeting expenses, to the extent that such expenses pertain to a
specific class rather than to a Fund as a whole.

<PAGE>

Dealer Reallowances. The following table shows the amount of the front end sales
load that is reallowed to dealers as a percentage of the offering price of Class
A Shares of the Established Value Fund.

Initial Sales Charge: Concession to Dealers:
Amount of Purchase % of Offering Price % of Offering Price
------------------ ------------------- -------------------
Up to $49,000 5.75% 5.00%
$50,000 to $99,999 4.50% 4.00%
$100,000 to $249,999 3.50% 3.00%
$250,000 to $499,999 2.50% 2.00%
$500,000 to $999,999 2.00% 1.75%
$1,000,000 and above 0.00% *

* Except as indicated in the last sentence of this note, there is no initial
sales charge on purchases of $1 million or more. However, a CDSC of up to 1.00%
will be imposed on any such shares redeemed within the first year after
purchase, or a 0.50% CDSC will be charged on any such shares redeemed within two
years of purchase. This charge will be based on the lower of the cost of the
shares or net asset value at the time of redemption. No CDSC is imposed on
reinvested distributions. Investment professionals may be paid at a rate of
1.00% of the purchase price on amounts from $1 million to $2,999,999; 0.75% on
amounts from $3 million to $4,999,999; and 0.50% on amounts of $5 million or
more. The initial sales charge exemption for investments of $1 million or more
does not apply to tax deferred retirement accounts (except IRA accounts); the
sales charge on investments by such tax deferred retirement accounts of $1
million or more is the same as for investments between $500,000 and $999,999.

The Trust's distributor reserves the right to pay the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter" under
federal securities laws.

Reduced Sales Charge. Reduced sales charges are available for purchases of
$50,000 or more of Class A shares of the Established Value Fund alone or in
combination with purchases of other Class A shares of the Trust. To obtain the
reduction of the sales charge, you or your Investment Professional must notify
the Transfer Agent at the time of purchase whenever a quantity discount is
applicable to your purchase.

In addition to investing at one time in any combination of Class A shares of the
Trust's in an amount entitling you to a reduced sales charge, you may qualify
for a reduction in the sales charge under the following programs:

Combined Purchases. When you invest in Class A shares of the Trust, excluding
Money Market Funds, for several accounts at the same time, you may combine these
investments into a single transaction if the total is $50,000 or more in order
to pay the lower sales loads applicable to these amounts. The following may
qualify for this privilege: an individual, or "company" as defined in Section
2(a)(8) of the Investment Company Act of 1940, as amended; an individual,
spouse, and their children under age 21 purchasing for his, her, or their own
account; a trustee, administrator or other fiduciary purchasing for a single
trust estate or single fiduciary account or for a single or a parent-subsidiary
group of "employee benefit plans" (as defined in Section 3(3) of ERISA); and
tax-exempt organizations under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended.

Rights of Accumulation. "Rights of Accumulation" permit reduced sales charges on
future purchases of Class A shares after you have reached a new breakpoint. You
can add the value of existing Trust's Class A shares held by you, your spouse,
and your children under age 21, determined at the previous day's net asset value
at the close of business, to the amount of your new purchase valued at the
current offering price to determine your reduced sales charge.

<PAGE>

Letter of Intent. If you anticipate purchasing $50,000 or more of shares of the
Established Value Fund alone or in combination with Class A shares of certain
other Victory Funds within a 13-month period, you may obtain shares of the
portfolios at the same reduced sales charge as though the total quantity were
invested in one lump sum, by filing a non-binding Letter of Intent (the
"Letter") within 90 days of the start of the purchases. Each investment you make
after signing the Letter will be entitled to the sales charge applicable to the
total investment indicated in the Letter. For example, a $2,500 purchase toward
a $60,000 Letter would receive the same reduced sales charge as if the $60,000
had been invested at one time. To ensure that the reduced price will be received
on future purchases, you or your Investment Professional must inform the
Transfer Agent that the Letter is in effect each time shares are purchased.
Neither income dividends nor capital gain distributions taken in additional
shares will apply toward the completion of the Letter.

You are not obligated to complete the additional purchases contemplated by a
Letter. If you do not complete your purchase under the Letter within the
13-month period, your sales charge will be adjusted upward, corresponding to the
amount actually purchased, and if after written notice, you do not pay the
increased sales charge, sufficient escrowed shares will be redeemed to pay such
charge.

If you purchase more than the amount specified in the Letter and qualify for a
further sales charge reduction, the sales charge will be adjusted to reflect
your total purchase at the end of 13 months. Surplus funds will be applied to
the purchase of additional shares at the then current offering price applicable
to the total purchase.

3. On page 30, in the section entitled "Advisory and Other Contracts," insert
the following information before the heading "Portfolio Transactions."

Code of Ethics. The Trust and the Adviser have each adopted a Code of Ethics to
which all investment personnel and all other access persons of the Funds must
conform. Investment personnel must refrain from certain trading practices and
are required to report certain personal investment activities. Violations of the
Code of Ethics can result in penalties, suspension, or termination of
employment.

4. On page 33, in the section entitled "Advisory and Other Contracts," insert
the following information before the heading "Class G Shares Distribution and
Service Plan."

Class A Shares Shareholder Servicing Plan - Established Value Fund.

Payments made under the Class A Shareholder Servicing Plan to Shareholder
Servicing Agents (which may include affiliates of the Adviser) are for
administrative support services to customers who may from time to time
beneficially own shares, which services may include: (1) aggregating and
processing purchase and redemption requests for shares from customers and
transmitting promptly net purchase and redemption orders to our distributor or
transfer agent; (2) providing customers with a service that invests the assets
of their accounts in shares pursuant to specific or pre-authorized instructions;
(3) processing dividend and distribution payments on behalf of customers; (4)
providing information periodically to customers showing their positions in
shares; (5) arranging for bank wires; (6) responding to customer inquiries; (7)
providing sub-accounting with respect to shares beneficially owned by customers
or providing the information to the Established Value Fund as necessary for
sub-accounting; (8) if required by law, forwarding shareholder communications
from us (such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to customers; (9)
forwarding to customers proxy statements and proxies containing any proposals
which require a shareholder vote; and (10) providing such other similar services
as we may reasonably request to the extent you are permitted to do so under
applicable statutes, rules or regulations.

<PAGE>

5. On page 37, in the section entitled "Additional Information," insert the
following before the heading "Financial Statements."

As of October 31, 1999, to the best knowledge of the Trust, the following owned
of record, and not beneficially, 98.61% of the Class G Shares of the Established
Value Fund: McDonald & Co. Securities, for the exclusive benefit of customers,
c/o Gradison Division, 580 Walnut Street, Cincinnati, Ohio.

6. On page 37, in the section entitled "Additional Information," replace the
information relating to the Established Value Fund under the heading
"Financial Statements" with the following:

Financial Statements.

The audited financial statements of the Established Value Fund for the period
from April 1, 1999 to October 31, 1999 are incorporated by reference herein.
These financial statements been audited by PricewaterhouseCoopers LLP as set
forth in their report to be incorporated by reference herein, and are included
in reliance upon such report and on the authority of such firm as experts in
auditing and accounting. PricewaterhouseCoopers LLP's address is 100 East Broad
Street, Columbus, Ohio 43215. In addition, the audited financial statements of
the Established Value Fund for the fiscal year ended March 31, 1999 are also
incorporated by reference herein. These financial statements have been audited
by Arthur Andersen LLP as set forth in their report incorporated by reference
herein, and are included in reliance upon such report and on the authority of
such firm as experts in auditing and accounting. Arthur Andersen LLP's address
is 425 Walnut Street, Cincinnati, Ohio 45202.

7. On page 37, in the section entitled "Additional Information," add the
following immediately before the last paragraph:

Year 2000 Issues.

Although The Victory Portfolios (the "Trust") did not experience any disruption
in its operations as a result of computer system failures related to the January
1, 2000 date change, the Trust is continuing to monitor developments in this
area. There is a continuing possibility that computer systems used by the
Trust's service providers may experience adverse effects relating from their
inability to recognize dates after December 31, 1999. The risk of such a
computer failure may be greater as it relates to investments in foreign
countries. The Trust's service providers have been actively updating their
systems to be able to process Year 2000 data. There can be no assurance,
however, that these steps will be adequate to avoid a temporary service
disruption or other adverse impact on the Trust. In addition, an issuer's
failure to process accurately Year 2000 data may cause that issuer's securities
to decline in value or delay the payment of interest to the Trust.

If you would like more information about the Victory Funds, call 800-539-FUND.

VF_SAI_SUP2

<PAGE>
THE VICTORY PORTFOLIOS

Gradison Government Reserves Fund

Established Value Fund

Supplement dated January 31, 2000
To the Statement of AdditionalInformation dated April 5, 1999
As amended July 28, 1999 and January 18, 2000

The following information relates to the Gradison Government Reserves Fund
(the "Fund"). Information for periods prior to April 5, 1999 reflects the
performance of Gradison U.S. Government Reserves, the Fund's predecessor.

1. Dividend Yield and Distribution Return. The following replaces the second
full paragraph on page 15 under the heading "Total Return Calculations:"

The total return of the Fund for the one year, five year and ten year
periods ended October 31, 1999 and the period since inception to October
31, 1999 are 4.44%, 4.85%, 4.71% and 7.13%, respectively.

2. Investment Advisory Fees. The following replaces the portion of the table
on page 29 under the caption "Investment Adviser" as it relates to the
Fund:

- --------------------------------------------------------------------------------
One month
ended Year ended Year ended Year ended
10/31/99 9/30/99 9/30/98 9/30/97
- -------------------------------------------------------------------------------
Gradison Government Reserves $629,136 $8,488,318 $7,875,357 $6,956,236
Fund
- --------------------------------------------------------------------------------
3. Rule 12b-1 Payments. The following replaces the information after the
third full paragraph on page 34 under the caption "Class G Shares
Distribution and Service Plan" as it relates to fees paid under the Rule
12b-1 Distribution Plan of the Fund.

For the fiscal year ended September 30, 1999 and the period from October
1, 1999 to October 31, 1999, the Fund paid $2,109,432 and $172,892,
respectively, pursuant to its Rule 12b-1 Distribution Plan for shareholder
services.

4. Additional Information (5% Shareholders). As of October 31, 1999, to the
best knowledge of the Trust, the following owned of record, and not
beneficially, 98.67% of the Class G shares of the Fund: McDonald & Co.
Securities for the exclusive benefit of customers, c/o Gradison Division,
580 Walnut Street, Cincinnati, Ohio 45202.

<PAGE>

5. Financial Statements. The audited financial statements of the Fund for the
fiscal year ended September 30, 1999 and the period from October 1, 1999
to October 31, 1999 are incorporated by reference herein. These financial
statements have been audited by PricewaterhouseCoopers LLP as set forth in
their report incorporated by reference herein, and are included in
reliance upon such report and on the authority of such firm as experts in
auditing and accounting. PricewaterhouseCoopers LLP's address is 100 East
Broad Street, Columbus, Ohio 43215. In addition, the audited financial
statements of the Fund for the fiscal year ended September 30, 1998 are
also incorporated by reference herein. These financial statements have
been audited by Arthur Andersen LLP as set forth in their report
incorporated by reference herein, and are included in reliance upon such
report and on the authority of such firm as experts in auditing and
accounting. Arthur Andersen LLP's address is 425 Walnut Street,
Cincinnati, Ohio 45202.

If you would like more information about the Victory Funds call 800-539-FUND.

VF_SAI_SUP3

<PAGE>