MONITOR FUNDS, 497, 1995-05-02

MONITOR FUNDS
497, 1995-05-02

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PROSPECTUS

April 30, 1995

The Monitor Funds, a Massachusetts business trust (the "Trust"), consists of
nine series (the "Funds") which have different investment objectives and
policies. As noted below, certain Funds offer two classes of shares. Investors
may purchase Trust Shares in each of the Funds through procedures established
by Federated Securities Corp. (the "Distributor"), the Trust's distributor, in
connection with the requirements of fiduciary, advisory, agency, and other
similar accounts maintained by or on behalf of customers by The Huntington
Trust Company, N.A. or its affiliates or correspondent banks. The different
Funds for which Trust Shares are available through this Prospectus include:

MONEY MARKET FUNDS--TRUST SHARES
The Monitor Money Market Fund*
The Monitor Ohio Municipal Money Market Fund*
The Monitor U.S. Treasury Money Market Fund*

EQUITY FUNDS--TRUST SHARES
The Monitor Growth Fund*
The Monitor Income Equity Fund

INCOME FUNDS--TRUST SHARES
The Monitor Mortgage Securities Fund*
The Monitor Ohio Tax-Free Fund*
The Monitor Fixed Income Securities Fund*
The Monitor Short/Intermediate Fixed Income Securities Fund

*These Funds also offer a second class of shares, known as Investment Shares.
(A Fund's Trust and Investment Shares may be hereinafter referred to
collectively as "shares.")

This Prospectus relates only to Trust Shares of the Funds. This Prospectus
sets forth concisely what a shareholder should know before investing in Trust
Shares of any of the Funds and should be read carefully and retained for
future reference. The Combined Statement of Additional Information for Trust
Shares and Investment Shares has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference. FOR A FREE
COPY OF THE COMBINED STATEMENT OF ADDITIONAL INFORMATION CALL THE MUTUAL FUND
SERVICES CENTER AT: (IN OHIO) 614-463-5580 OR (OUTSIDE THE 614 AREA CODE) 800-
253-0412.

THE HUNTINGTON TRUST COMPANY, N.A.
Investment Adviser
FEDERATED ADMINISTRATIVE SERVICES
Administrator
FEDERATED SECURITIES CORP.
Distributor
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INVESTMENT COMPANY SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY, THE HUNTINGTON TRUST COMPANY,
N.A., NOR ARE THEY INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE COR-
PORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN IN-
VESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT OR
ANY AGENCY SPONSORED BY THE FEDERAL GOVERNMENT OR ANY STATE. INVESTMENT IN
THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCI-
PAL. EACH MONEY MARKET FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT A FUND WILL BE ABLE TO DO SO.

TABLE OF CONTENTS
PAGE

SYNOPSIS.......................................................................1
FEE TABLE AND EXAMPLE..........................................................3
SUPPLEMENTARY INFORMATION --
FINANCIAL HIGHLIGHTS..........................................................4
THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES.................................10
MONEY MARKET FUNDS............................................................10
Money Market Fund............................................................10
Ohio Municipal Money Market Fund.............................................11
U.S. Treasury Money Market Fund..............................................13
EQUITY FUNDS..................................................................13
Growth Fund..................................................................13
Income Equity Fund...........................................................14
INCOME FUNDS..................................................................14
Mortgage Securities Fund.....................................................14
Ohio Tax-Free Fund...........................................................19
Fixed Income Securities Fund............................................ 20
Short/Intermediate Fixed Income Securities Fund..............................20
ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES................20
Ohio Tax-Exempt Securities...................................................20
Non-Diversification..........................................................21
Defensive Investment Strategies..............................................21
Options and Futures Contracts........................................... 21
Foreign Investments..................................................... 23
Repurchase Agreements........................................................23
When-Issued and Delayed Delivery Transactions........................... 24
Lending of Portfolio Securities..............................................24
INVESTMENT RESTRICTIONS.................................................. 25
HOW THE FUNDS VALUE THEIR SHARES..............................................25
PAGE

HOW TO BUY TRUST SHARES.......................................................26
Minimum Investment Required............................................ .27
Systematic Investment Program.......................................... .27
HOW TO EXCHANGE TRUST SHARES AMONG THE FUNDS............................ .27
HOW TO REDEEM TRUST SHARES............................................... 28
Redeeming By Telephone.......................................................28
Redeeming By Mail...................................................... .29
MANAGEMENT OF THE TRUST................................................. .30
Adviser's Background........................................................30
Sub-Adviser.................................................................30
Sub-Adviser's Background.............................................. .30
Distribution of Trust Shares.................................................32
Administration of the Funds..................................................32
Custodian, Recordkeeper, Transfer Agent, and Dividend Disbursing Agent.. 33
Independent Public Accountants........................................ ..33

DISTRIBUTIONS AND TAXES.......................................................33
Money Market Funds...........................................................33
Other Funds..................................................................33
Distribution Options.................................................... 33
Federal Income Taxes................................................... .34
Ohio Personal Income Taxes............................................. .35
ORGANIZATION OF THE TRUST.....................................................35
Voting Rights.......................................................... .36
PERFORMANCE DATA AND COMPARISONS........................................ .37
SHAREHOLDER INQUIRIES........................................................ 37
OTHER CLASSES OF SHARES................................................. .37

PENDING LEGAL PROCEEDINGS RELATING TO PIPER............................ ..38

APPENDIX I.............................................................. .39

SYNOPSIS

The Trust, a management investment company, was established as a
Massachusetts business trust under a Declaration of Trust dated February 10,
1987. The Declaration of Trust permits the Trust to offer separate series of
shares of beneficial interest representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate
classes. As of the date of this Prospectus, the Board of Trustees has
established two classes of shares, known as Trust Shares and Investment
Shares, in the Money Market Fund, the Ohio Municipal Money Market Fund, the
U.S. Treasury Money Market Fund, the Growth Fund, the Mortgage Securities
Fund, the Ohio Tax-Free Fund, and the Fixed Income Securities Fund. All of the
portfolios of the Trust, with the exception of the Ohio Municipal Money Market
Fund and the Ohio Tax-Free Fund, are diversified.

As of the date of this Prospectus, the Trust is comprised of the following
nine Funds:

MONEY MARKET FUNDS--TRUST SHARES

MONEY MARKET FUND--seeks to maximize current income while preserving
capital and maintaining liquidity by investing in a portfolio of high
quality money market instruments;

OHIO MUNICIPAL MONEY MARKET FUND--seeks to provide income exempt from
both federal regular income tax and Ohio personal income taxes while
preserving capital and maintaining liquidity by investing in Ohio tax-
exempt securities;

U.S. TREASURY MONEY MARKET FUND--seeks to maximize current income while
preserving capital and maintaining liquidity by investing exclusively
in obligations issued by the U.S. Government and backed by its full
faith and credit and in repurchase agreements with respect to such
obligations;

EQUITY FUNDS--TRUST SHARES

GROWTH FUND--seeks to achieve long-term capital appreciation by
investing primarily in equity securities;

INCOME EQUITY FUND--seeks to achieve high current income and moderate
appreciation of capital by investing in income-producing equity
securities;

INCOME FUNDS--TRUST SHARES

MORTGAGE SECURITIES FUND--seeks to achieve current income by investing
in mortgage securities and in U.S. Government securities;

OHIO TAX-FREE FUND--seeks to provide current income exempt from federal
income tax and Ohio personal income taxes by investing in Ohio tax-
exempt securities;

FIXED INCOME SECURITIES FUND--seeks to achieve high current income by
investing in fixed income securities where the average maturity of the
Fund will not exceed 10 years; and

SHORT/INTERMEDIATE FIXED INCOME SECURITIES FUND--seeks to achieve
current income by investing in fixed income securities with a maximum
maturity for individual issues of 5 years or less at the time of
purchase and a dollar-weighted average portfolio maturity of more than
2 but less than 5 years.

For information on how to purchase Trust Shares of any of the Funds, please
refer to "How to Buy Trust Shares." A minimum initial investment of $1,000 is
required for each Fund. Subsequent investments in a Fund must be in amounts of
at least $500. Trust Shares of each Fund are sold and
redeemed at net asset value. Information on redeeming shares may be found
under "How to Redeem Trust Shares." The Funds are advised by The Huntington
Trust Company, N.A. In addition, Piper Capital Management, Inc. ("Piper")
serves as sub-adviser to the Mortgage Securities Fund.

RISK FACTORS. Investors should be aware of the following general observations.
There can be no assurance that a Fund will achieve its investment objective.
The market value of fixed-income securities, which constitute a major part of
the investments of several Funds, may vary inversely in response to changes in
prevailing interest rates ("interest rate risk"). Shareholders of the Ohio
Municipal Money Market Fund and the Ohio Tax-Free Fund may be subject to the
federal alternative minimum tax on that part of the Funds' dividends derived
from interest on certain municipal securities. One or more Funds may make
certain investments and employ certain investment techniques that involve
special risks, including the use of repurchase agreements, lending portfolio
securities, entering into futures contracts and related options as hedges,
investing in foreign securities, and purchasing securities on a when-issued or
delayed delivery basis, including the use of dollar rolls. These investments
and investment techniques may increase the volatility of a Fund's net asset
value. Their risks are described under "Additional Information on Portfolio
Investments and Strategies." The Mortgage Securities Fund may engage in short-
term trading in attempting to achieve its investment objective, which will
increase transaction costs. The Mortgage Securities Fund may purchase
mortgage-related securities including derivative mortgage securities. In
addition to interest rate risk, mortgage-related securities are subject to
prepayment risk. The market experience of 1994 has shown that certain
derivative mortgage securities may be extremely sensitive to changes in
interest rates and in prepayment rates on the underlying assets and, as a
result, the prices of such securities may be highly volatile.

FEE TABLE AND EXAMPLE

The following Fee Table and Example summarize the various costs and expenses
that a shareholder of Trust Shares will bear, either directly or indirectly.

ANNUAL TRUST SHARES OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
TOTAL TRUST SHARES
NET OPERATING EXPENSES
MANAGEMENT 12B-1 OTHER NET OF ANY WAIVERS
FEES (1) FEES EXPENSES (2) OR REIMBURSEMENTS
---------- ------ ------------ ------------------
<S> <C> <C> <C> <C>
Money Market Fund............ 0.30% None 0.21% 0.51%
Ohio Municipal Money Market
Fund (3)*.................... 0.15% None 0.30% 0.45%
U.S. Treasury Money Market
Fund ........................ 0.20% None 0.22% 0.42%
Growth Fund.................. 0.60% None 0.28% 0.88%
Income Equity Fund........... 0.60% None 0.24% 0.84%
Mortgage Securities Fund
(4)*......................... 0.00% None 0.52% 0.52%
Ohio Tax-Free Fund........... 0.50% None 0.27% 0.77%
Fixed Income Securities Fund. 0.50% None 0.25% 0.75%
Short/Intermediate Fixed
Income Securities Fund....... 0.50% None 0.22% 0.72%
</TABLE>
- --------
(1)Fees paid by each Fund for investment advisory services. See "Management of
the Trust."
(2)Includes administration fees. See "Management of the Trust--Administration
of the Funds."
(3) The Total Trust Shares Operating Expenses for the Ohio Municipal Money
Market Fund would have been 0.60%, absent the voluntary waiver of
management fees. The maximum management fee for Ohio Municipal Money
Market Fund is 0.30%.
(4) The Total Trust Shares Operating Expenses for the Mortgage Securities Fund
in the table above are based on net expenses expected during the fiscal
year ending December 31, 1995. Absent the voluntary waiver of management,
administrative and custody fees, the anticipated gross expenses are 1.10%.
The maximum management, administrative and custody fees are 0.50%, 0.06%
and 0.026%, respectively. The Total Trust Shares Operating Expenses were
0.88% for the fiscal year ended December 31, 1994 and were 0.96% absent
the voluntary waivers of the management and administrative fees and the
voluntary reimbursement of certain other operating expenses.
* The adviser, administrator and/or custodian can terminate these voluntary
waivers at any time at their sole discretion.

EXAMPLE:

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Fund.............................. $5 $16 $29 $ 64
Ohio Municipal Money Market Fund............... $5 $14 $25 $ 57
U.S. Treasury Money Market Fund................ $ 4 $13 $24 $ 53
Growth Fund.................................... $ 9 $28 $49 $108
Income Equity Fund............................. $ 9 $27 $47 $104
Mortgage Securities Fund....................... $ 5 $17 $29 $ 65
Ohio Tax-Free Fund............................. $ 8 $25 $43 $ 95
Fixed Income Securities Fund................... $ 8 $24 $42 $ 93
Short/Intermediate Fixed Income Securities
Fund.......................................... $ 7 $23 $40 $ 89
</TABLE>

The purpose of the foregoing Example is to assist an investor in
understanding the various costs and expenses that a shareholder of Trust
Shares will bear directly or indirectly. The Example should not be considered
a representation of past or future expenses. Actual expenses may be greater or
less than those shown.

FINANCIAL HIGHLIGHTS--MONEY MARKET FUNDS (FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD)

<TABLE>
<CAPTION>
NET ASSET DIVIDENDS TO NET ASSET
VALUE, NET SHAREHOLDERS VALUE,
YEAR ENDED BEGINNING INVESTMENT FROM NET END OF TOTAL
DECEMBER 31, OF PERIOD INCOME INVESTMENT INCOME PERIOD RETURN+ EXPENSES
- ---------------------------------------------------------------------------------
TRUST SHARES
MONEY MARKET
<S> <C> <C> <C> <C> <C> <C>
1987* $1.00 0.04 (0.04) $1.00 3.38% 0.49%(a)
1988 $1.00 0.07 (0.07) $1.00 7.45% 0.45%
1989 $1.00 0.09 (0.09) $1.00 9.13% 0.50%
1990 $1.00 0.08 (0.08) $1.00 8.10% 0.47%
1991 $1.00 0.06 (0.06) $1.00 5.85% 0.50%
1992 $1.00 0.03 (0.03) $1.00 3.44% 0.50%
1993 $1.00 0.03 (0.03) $1.00 2.74% 0.51%
1994 $1.00 0.04 (0.04) $1.00 3.86% 0.51%
<CAPTION>
OHIO MUNICIPAL MONEY MARKET
<S> <C> <C> <C> <C> <C> <C>
1987** $1.00 0.02 (0.02) $1.00 2.14% 0.50%(a)
1988 $1.00 0.05 (0.05) $1.00 4.89% 0.52%
1989 $1.00 0.06 (0.06) $1.00 6.01% 0.52%
1990 $1.00 0.05 (0.05) $1.00 5.43% 0.60%
1991 $1.00 0.04 (0.04) $1.00 4.07% 0.58%
1992 $1.00 0.03 (0.03) $1.00 2.61% 0.49%
1993 $1.00 0.02 (0.02) $1.00 2.08% 0.45%
1994 $1.00 0.02 (0.02) $1.00 2.41% 0.45%
<CAPTION>
U.S. TREASURY MONEY MARKET
<S> <C> <C> <C> <C> <C> <C>
1989*** $1.00 0.02 (0.02) $1.00 1.37% 0.38%(a)
1990 $1.00 0.07 (0.07) $1.00 7.97% 0.44%
1991 $1.00 0.05 (0.05) $1.00 5.66% 0.44%
1992 $1.00 0.03 (0.03) $1.00 3.43% 0.41%
1993 $1.00 0.03 (0.03) $1.00 2.77% 0.40%
1994 $1.00 0.04 (0.04) $1.00 3.79% 0.42%
</TABLE>
- -------------------------------------------------------------------------------

*Commenced operations on June 11, 1987.

**Reflects operations for the period from June 10, 1987 (date of initial
public investment) to December 31, 1987.

***Commenced operations on October 2, 1989.

+ Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a)Computed on an annualized basis.

(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

<TABLE>
<CAPTION>
NET NET ASSETS,
INVESTMENT EXPENSE WAIVER/ END OF PERIOD
INCOME REIMBURSEMENT(B) (000 OMITTED)
- --------------------------------------------------------------------------
<S> <C> <C>
6.76%(a) -- $303,798
7.24% -- $295,414
8.75% -- $327,419
7.79% -- $313,436
5.74% -- $335,751
3.38% -- $291,818
2.70% 0.02% $337,276
3.75% 0.02% $287,805
4.33%(a) -- $72,001
4.76% -- $70,370
5.85% -- $71,527
5.33% -- $72,105
4.00% 0.02% $54,873
2.60% 0.14% $48,893
2.07% 0.20% $40,141
2.40% 0.19% $39,624
7.58%(a) 0.05%(a) $62,499
7.68% -- $149,066
5.52% -- $130,302
3.34% -- $146,453
2.74% 0.01% $231,123
3.76% 0.02% $256,538
</TABLE>
- ---------------------------------------------

FINANCIAL HIGHLIGHTS--EQUITY FUNDS (FOR A SHARE OUTSTANDING THROUGHOUT EACH
PERIOD)

* Commenced operations on July 3, 1989.

+ Distributions in excess of net investment income were the result of
certain book and timing differences. These distributions do not represent
a return of capital for federal income tax purposes.

++ Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a)Computed on an annualized basis.

(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about the Funds' performance is contained in the Funds'
Annual Report dated February 28, 1995, which can be obtained free of charge.

<TABLE>
<CAPTION>
NET ASSET NET ASSETS,
VALUE, NET END OF PORTFOLIO
TOTAL END OF TOTAL INVESTMENT EXPENSE WAIVER/ PERIOD (000 TURNOVER
DISTRIBUTIONS PERIOD RETURN++ EXPENSES INCOME REIMBURSEMENT(B) OMITTED) RATE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(0.31) $20.61 4.63% 0.95%(a) 3.24%(a) -- $24,457 14%
(0.51) $20.13 0.16% 1.00% 2.58% -- $36,253 18%
(0.62) $24.78 26.47% 0.93% 2.33% 0.02% $71,451 13%
(0.94) $25.76 7.88% 0.91% 2.25% 0.01% $90,096 36%
(0.49) $26.17 3.53% 0.84% 1.79% 0.04% $109,576 29%
(0.47) $26.30 2.28% 0.88% 1.52% 0.04% $103,463 42%
(0.42) $20.25 3.39% 0.92%(a) 5.13%(a) -- $35,215 29%
(0.88) $17.60 (8.86%) 0.94% 4.43% -- $45,468 66%
(0.72) $20.90 23.20% 0.93% 3.67% -- $79,908 25%
(0.74) $21.70 7.49% 0.85% 3.53% 0.01% $95,182 22%
(0.80) $23.21 10.85% 0.82% 3.29% -- $135,618 10%
(0.87) $21.93 (1.82%) 0.84% 3.91% -- $115,399 50%
</TABLE>
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS--INCOME FUNDS

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
DISTRIBUTIONS TO
DIVIDENDS TO SHAREHOLDERS DISTRIBUTIONS
NET ASSET NET REALIZED SHAREHOLDERS FROM NET IN EXCESS
VALUE, NET AND UNREALIZED TOTAL FROM FROM NET REALIZED GAIN OF NET
YEAR ENDED BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT ON INVESTMENT INVESTMENT
DECEMBER 31, OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME TRANSACTIONS INCOME+
- --------------------------------------------------------------------------------------------------------
TRUST SHARES
OHIO TAX-FREE
<S> <C> <C> <C> <C> <C> <C> <C>
1988* $20.00 0.22 (0.05) 0.17 (0.22) -- --
1989 $19.95 1.20 0.23 1.43 (1.15) -- --
1990 $20.23 1.11 0.12 1.23 (1.15) -- --
1991 $20.31 1.05 0.74 1.79 (1.05) -- --
1992 $21.05 0.98 0.26 1.24 (0.98) -- --
1993 $21.31 0.96 0.73 1.69 (0.96) -- --
1994 $22.04 0.99 (1.55) (0.56) (0.98) -- --
<CAPTION>
FIXED INCOME SECURITIES
<S> <C> <C> <C> <C> <C> <C> <C>
1989** $20.00 0.60 0.02 0.62 (0.60) -- --
1990 $20.02 1.44 (0.03) 1.41 (1.48) -- --
1991 $19.95 1.43 1.65 3.08 (1.35) (0.10) --
1992 $21.58 1.37 (0.02) 1.35 (1.47) (0.12) (0.02)
1993 $21.32 1.28 0.88 2.16 (1.39) (0.06) --
1994 $22.03 1.28 (2.28) (1.00) (1.34) -- --
<CAPTION>
MORTGAGE SECURITIES
<S> <C> <C> <C> <C> <C> <C> <C>
1992***(c) $10.00 0.63 0.29 0.92 (0.61) (0.04) --
1993(c) $10.27 1.50 (0.28) 1.22 (1.46) (0.10) --
1994(c) $ 9.93 0.89 (3.19) (2.30) (0.93) -- (0.01)
<CAPTION>
SHORT/INTERMEDIATE FIXED INCOME SECURITIES
<S> <C> <C> <C> <C> <C> <C> <C>
1989** $20.00 0.72 0.05 0.77 (0.66) -- --
1990 $20.11 1.50 0.10 1.60 (1.54) -- --
1991 $20.17 1.49 1.14 2.63 (1.51) (0.11) (0.03)
1992 $21.15 1.36 (0.09) 1.27 (1.36) (0.32) (0.11)
1993 $20.63 1.19 0.31 1.50 (1.31) (0.25) --
1994 $20.57 1.13 (1.33) (0.20) (1.23) -- --
- --------------------------------------------------------------------------------------------------------
</TABLE>

*Commenced operations on October 18, 1988.

**Commenced operations on July 3, 1989.

***Reflects operations for the period from June 2, 1992 (date of initial
public investment) to December 31, 1992.

+ Distributions in excess of net investment income were the result of certain
book and timing differences. These distributions do not represent a return
of capital for federal income tax purposes.

++Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a)Computed on an annualized basis.

(b)This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

(c) Per share information presented is based upon the monthly number of shares
outstanding due to large fluctuations in the number of shares outstanding
during the period.

Further information about the Funds' performance is contained in the Funds'
Annual Report dated February 28, 1995, which can be obtained free of charge.

<TABLE>
<CAPTION>
NET ASSETS,
NET ASSET NET END OF PORTFOLIO
TOTAL VALUE, END TOTAL INVESTMENT EXPENSE WAIVER/ PERIOD (000 TURNOVER
DISTRIBUTIONS OF PERIOD RETURN++ EXPENSES INCOME REIMBURSEMENT(B) OMITTED) RATE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(0.22) $19.95 0.59% 0.88%(a) 5.42%(a) -- $ 15,724 76%
(1.15) $20.23 7.37% 0.87% 5.88% -- $ 28,040 86%
(1.15) $20.31 6.28% 0.91% 5.59% -- $ 29,886 5%
(1.05) $21.05 9.06% 0.90% 5.13% -- $ 38,112 13%
(0.98) $21.31 6.04% 0.91% 4.62% -- $ 47,557 3%
(0.96) $22.04 8.08% 0.82% 4.39% 0.04% $ 59,541 2%
(0.98) $20.50 (2.57%) 0.77% 4.68% 0.04% $ 56,469 12%
(0.60) $20.02 3.14% 0.88%(a) 7.14%(a) -- $ 26,502 19%
(1.48) $19.95 7.49% 0.82% 7.56% -- $ 38,131 7%
(1.45) $21.58 16.13% 0.90% 7.12% -- $ 54,525 21%
(1.61) $21.32 6.54% 0.83% 6.49% -- $ 87,107 15%
(1.45) $22.03 10.32% 0.74% 5.87% 0.04% $112,103 7%
(1.34) $19.69 (4.62%) 0.75% 6.26% 0.04% $119,117 23%
(0.65) $10.27 9.12% 0.58%(a) 10.60%(a) 0.19%(a) $ 90,677 50%
(1.56) $ 9.93 12.10% 0.78% 14.20% 0.04% $ 90,461 154%
(0.94) $ 6.69 (24.59%) 0.88% 11.16% 0.12% $ 54,164 91%
(0.66) $20.11 3.91% 0.76%(a) 7.54%(a) -- $ 84,702 24%
(1.54) $20.17 8.34% 0.74% 7.59% -- $104,218 20%
(1.65) $21.15 13.62% 0.78% 7.23% -- $101,519 50%
(1.79) $20.63 6.25% 0.74% 6.44% -- $123,400 41%
(1.56) $20.57 7.43% 0.71% 5.70% -- $123,897 24%
(1.23) $19.14 (0.98%) 0.72% 5.76% -- $125,112 38%
- -------------------------------------------------------------------------------------------------
</TABLE>

THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of the various Funds are described
below. There can, of course, be no guarantee that a Fund will achieve its
investment objective.

Each Fund's investment objective is fundamental and may be changed only by a
vote of a majority of the outstanding shares of that Fund. Unless otherwise
noted in this Prospectus or in the Statement of Additional Information, the
investment policies of the Funds are not fundamental and may be changed by the
Trust's Board of Trustees (the "Trustees"). Except with respect to borrowing
money or downgrades of securities in the Money Market Funds, any percentage
limitation on a Fund's investments (or other activities) will be considered to
be violated only if such limitation is exceeded immediately after, and is
caused by, an acquisition of an investment (or the taking of such other
action).

For a description of the ratings of nationally recognized statistical rating
organizations (individually, an "NRSRO") utilized by The Huntington Trust
Company, N.A. ("Huntington") in managing the Funds' investments, see the
Appendix to the Statement of Additional Information.

MONEY MARKET FUNDS

Each of the Money Market Funds described below is designed for investors
seeking current income with stability of principal. The Money Market Funds
intend to limit their investments by operating in a manner consistent with
Rule 2a-7 (as amended) under the Investment Company Act of 1940 (the "Rule").
The Rule permits funds to utilize the amortized cost method of valuation in
order to offer their shares at a net asset value of $1.00 per share. (See
also, the section of the Statement of Additional Information entitled,
"Determination of Net Asset Value.") The Rule imposes certain risk limiting
conditions on the Funds which in some instances restrict a Fund's investment
policies. These risk limiting conditions include the following:

. The Funds must limit their investments to "Eligible Securities" as defined
under the Rule, and which Huntington has determined present minimal credit
risks under guidelines adopted by the Trustees. (For an explanation of some
of the terms defined by the Rule, see Appendix I to this Prospectus.)

. Each Fund (except the Ohio Municipal Money Market Fund) must limit
investments in "Second Tier Securities" to 5% of total assets and 1% of total
assets in the securities of a single Second Tier issuer.

. The Funds may invest without limit in "First Tier Securities" subject to the
Funds' 5% issuer diversification limitation where applicable. In addition,
the portfolio investments of each Fund must have a maturity of 397 days or
less from the time of purchase by a Fund, although securities owned pursuant
to a repurchase agreement and certain adjustable interest rate instruments
may bear longer maturities. The dollar-weighted average maturity of each
Fund's portfolio must not exceed 90 days. Of course, a Fund's yield, and
under unusual circumstances, the value of its portfolio securities, will be
affected by changes in interest rates.

MONEY MARKET FUND

The objective of the Money Market Fund is to maximize current income while
preserving capital and maintaining liquidity by investing in a portfolio of
high quality money market instruments. The Fund's portfolio investments may
include:

(a) obligations, such as notes, bills or bonds, issued by or guaranteed as
to principal and interest by the U.S. Government or its agencies or
instrumentalities;

(b)commercial paper, including U.S. dollar denominated eurodollar
commercial paper, considered under the Rule to be rated in the highest
category by an NRSRO(s) or, if not rated, of comparable quality as
determined by Huntington pursuant to guidelines established by the
Trustees;

(c)negotiable certificates of deposit and bankers' acceptances issued by
domestic banks and U.S. branches of foreign banks which are subject to
the same regulation as U.S. banks and which, at the time of purchase,
have capital, surplus, and undivided profits in excess of $100,000,000
(as of the bank's most recently published financial statements);

(d)corporate debt obligations, including bonds, notes and debentures
considered under the Rule to be rated in the two highest categories by
an NRSRO(s) or, if not rated, of comparable quality as determined by
Huntington pursuant to guidelines established by the Trustees; and

(e)repurchase agreements and master demand notes.

RESTRICTED AND ILLIQUID SECURITIES. The Fund intends to invest in
restricted securities. Restricted securities are any securities in which
the Fund may otherwise invest pursuant to its investment objective and
policies but which are subject to restriction on resale under federal
securities law. However, the Fund will limit investments in illiquid
securities, including certain restricted securities not determined by the
Trustees to be liquid, non-negotiable time deposits, and repurchase
agreements providing for settlement in more than seven days after notice,
to 10% of its net assets.

The Fund may invest in commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities Act
of 1933. Section 4(2) commercial paper is restricted as to disposition
under federal securities law, and is generally sold to institutional
investors, such as the Fund, who agree that they are purchasing the paper
for investment purposes and not with a view to public distribution. Any
resale by the purchaser must be in an exempt transaction. Section 4(2)
commercial paper is normally resold to other institutional investors like
the Fund through or with the assistance of the issuer or investment
dealers who make a market in Section 4(2) commercial paper, thus providing
liquidity. The Fund believes that Section 4(2) commercial paper and
possibly certain other restricted securities which meet the criteria for
liquidity established by the Trustees are quite liquid. The Fund intends,
therefore, to treat the restricted securities which meet the criteria for
liquidity established by the Trustees, including Section 4(2) commercial
paper, as determined by Huntington, as liquid and not subject to the
investment limitation applicable to illiquid securities. In addition,
because Section 4(2) commercial paper is liquid, the Fund intends to not
subject such paper to the limitation applicable to restricted securities.

OHIO MUNICIPAL MONEY MARKET FUND

The objective of the Ohio Municipal Money Market Fund is to provide income
exempt from both federal regular income tax and Ohio personal income taxes
while preserving capital and maintaining liquidity. As a fundamental policy,
the Fund invests its assets so that at least 80% of its annual interest income
is exempt from federal regular income tax. The Fund invests primarily in Ohio
tax-exempt securities which, under normal market conditions, will comprise at
least 65% of the Fund's assets. Ohio tax-exempt securities are debt
obligations issued by or on behalf of the State of Ohio, its political
subdivisions, or agencies, or financing authorities of any of these, the
income from which is, in the
opinion of qualified legal counsel, exempt from both federal regular income
tax and the personal income taxes imposed by the State of Ohio. Examples of
tax-exempt securities include, but are not limited to:

.tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;

.bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;

.municipal commercial paper and other short-term notes;

.variable rate demand notes;

.municipal bonds (including bonds having serial maturities and pre-funded
bonds); and

.participation, trust and partnership interests in any of the foregoing
obligations.

VARIABLE RATE DEMAND OBLIGATIONS. Variable rate demand obligations are
long-term tax-exempt securities that have variable or floating interest
rates and provide the Fund with the right to tender the security for
repurchase at its stated principal amount plus accrued interest. Such
securities typically bear interest at a rate that is intended to cause the
securities to trade at par. The interest rate may float or be adjusted at
regular intervals (ranging from daily to annually), and is normally
established by the remarketing agent of the respective securities. Most
variable rate demand obligations allow the Fund to demand the repurchase
of the security on not more than seven days prior notice. Other
obligations only permit the Fund to tender the security at the time of
each interest rate adjustment or at other fixed intervals. See "Demand
Features." The Fund treats variable rate demand obligations as maturing on
the later of the date of the next interest adjustment or the date on which
the Fund may next tender the security for redemption.

PARTICIPATION INTERESTS. The Fund may purchase interests in tax-exempt
securities from financial institutions such as commercial and investment
banks, savings and loan associations and insurance companies. These
interests may take the form of participations, beneficial interests in a
trust, partnership interests or any other form of indirect ownership that
allows the Fund to treat the income from the investment as exempt from
federal income tax. The Fund invests in these participation interests in
order to obtain credit enhancement or demand features that would not be
available through direct ownership of the underlying tax-exempt
securities.

CREDIT ENHANCEMENT. Certain of the portfolio investments of the Fund may
have been credit enhanced by a guaranty, letter of credit or insurance.
The Fund typically evaluates the credit quality and ratings of credit
enhanced securities based upon the financial condition and ratings of the
party providing the credit enhancement (the "credit enhancer"), rather
than the issuer. However, credit enhanced securities will not be treated
as having been issued by the credit enhancer for diversification purposes,
unless the Fund has invested more than 10% of its assets in securities
issued, guaranteed or otherwise credit enhanced by the credit enhancer, in
which case the securities will be treated as having been issued both by
the issuer and the credit enhancer. The bankruptcy, receivership or
default of the credit enhancer will adversely affect the quality and
marketability of the underlying security.

The Fund may have more than 25% of its total assets invested in securities
credit enhanced by banks.

DEMAND FEATURES. The Fund may acquire securities that are subject to puts
and standby commitments ("demand features") to purchase the securities at
their principal amount (usually with accrued interest) within a fixed
period (usually seven days) following a demand by the Fund. The demand
feature may be issued by the issuer of the underlying securities, a dealer
in the securities or by another third party, and may not be transferred
separately from the underlying security. The Fund uses these arrangements
to provide the Fund with liquidity and not to protect against changes in
the market value of the underlying securities. The bankruptcy,
receivership or default by the issuer of the demand feature, or a default
on the underlying security or other event that terminates the demand
feature before its exercise, will adversely affect the liquidity of the
underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of
credit enhancement.

TEMPORARY INVESTMENTS. The Fund invests its assets so that at least 80% of
its annual interest income is exempt from federal regular income taxes and
at least 65% of its assets are invested in securities the income from
which is exempt from Ohio personal income taxes. However, from time to
time, when Huntington determines that market conditions call for a
temporary defensive posture, the Fund may invest in temporary investments
with remaining maturities of 13 months or less at the time of purchase by
the Fund, or hold Fund assets in cash. Interest income from temporary
investments may be taxable to shareholders as ordinary income. These
temporary investments include: obligations issued by or on behalf of
municipal or corporate issuers having the same quality characteristics as
Ohio tax-exempt securities purchased by the Fund; marketable obligations
issued or guaranteed by the U.S. Government, its agencies, or
instrumentalities; instruments issued by a U.S. branch of a domestic bank
or other depository institutions having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment; repurchase
agreements (arrangements in which the organization selling the Fund a
temporary investment agrees at the time of sale to repurchase it at a
mutually agreed upon time and price); and commercial paper rated in one of
the two highest short-term rating categories by an NRSRO(s).

Although the Fund is permitted to make taxable, temporary investments
that may have Ohio state tax implications, there is no current intention
of generating income subject to federal regular or Ohio personal income
taxes.

U.S. TREASURY MONEY MARKET FUND

The objective of the U.S. Treasury Money Market Fund is to maximize current
income while preserving capital and maintaining liquidity by investing
exclusively in obligations issued by the U.S. Government and backed by its
full faith and credit and in repurchase agreements with respect to such
obligations. At least 65% of the Fund's total assets will be invested in
Treasury bills, notes and bonds which are direct obligations of the U.S.
Treasury, and repurchase agreements with respect to such obligations.

EQUITY FUNDS

GROWTH FUND

The objective of the Growth Fund is to achieve long-term capital
appreciation primarily through investments in equity securities. Current
income will be only an incidental consideration in the selection of
investments. Equity securities in which the Fund may invest include common
stocks, preferred stocks, securities convertible into or exchangeable for
common stocks, and other securities which
Huntington believes have common stock characteristics, such as rights and
warrants. The Fund may invest in foreign securities and, subject to its
investment restrictions, securities restricted as to resale under federal
securities laws. The Fund's common stock selection emphasizes those companies
which Huntington believes have characteristics such as above average earnings
and dividend growth, superior balance sheets, and potential for capital gains,
but the Fund's investment policy recognizes that securities of other companies
may be attractive for capital appreciation purposes by virtue of special
developments or depression in price believed to be temporary. The Fund will be
primarily invested in large capitalization growth companies but will also
include representation in medium-sized companies with similar financial and
growth characteristics. In managing the investments of the Fund, Huntington
seeks to purchase equity securities whose potential for capital gains is
balanced by an ability to better withstand overall downward market movements.
As a matter of fundamental policy, under normal market conditions, the Fund
will invest at least 65% of its total assets in the equity securities
described in this paragraph. The Fund may also, under normal market
conditions, invest a portion of its assets in cash equivalents, including
repurchase agreements and the shares of money market mutual funds, for
liquidity purposes.

INCOME EQUITY FUND

The objective of the Income Equity Fund is to achieve high current income
and moderate appreciation of capital primarily through investment in income-
producing equity securities. Consistent with this objective, the Fund may
invest in preferred stocks, in securities convertible into or exchangeable for
common stocks and securities which Huntington believes have common stock
characteristics, such as rights and warrants. The Fund may invest in foreign
securities and, subject to its investment restrictions, in securities
restricted as to resale under federal securities laws. As a matter of
fundamental policy, under normal market conditions, the Fund will invest at
least 65% of its total assets in the equity securities described in this
paragraph. The Fund may also, under normal market conditions, invest a portion
of its assets in cash equivalents, including repurchase agreements and the
shares of money market mutual funds, for liquidity purposes.

INCOME FUNDS

The investment objectives and policies of the Income Funds are described
below. Each of the Income Funds invests primarily in debt securities. The
prices of fixed income securities fluctuate inversely to the direction of
interest rates. Thus, a decrease in interest rates will generally result in an
increase in the values of debt securities held by a Fund. Conversely, during
periods of rising interest rates, the values of an Income Fund's assets will
generally decline. The values of such securities are also affected by changes
in the financial condition of their issuers. Changes in the values of a Fund's
securities will not generally affect the income derived from such securities
but will affect a Fund's net asset value.

MORTGAGE SECURITIES FUND

The investment objective of the Mortgage Securities Fund is current income.
The Fund seeks to achieve this investment objective by investing at least 65%
of the value of its total assets in mortgage-related securities issued by the
U.S. Government, government-related entities, and private entities. These
mortgage-related securities include derivative mortgage securities. The market
experience of 1994 has shown that certain derivative mortgage securities may
be extremely sensitive to changes in interest rates and in prepayment rates on
the underlying mortgage assets, and, as a result, the prices of such
securities may be highly volatile.

The Fund may invest up to 35% of the value of its total assets in:

(i) non-mortgage related securities issued or guaranteed by the U.S.
Government, its agencies, or instrumentalities;

(ii) certificates of deposit, bankers' acceptances and interest-bearing
savings deposits of banks having total assets of more than $1 billion and
which are members of the Federal Deposit Insurance Corporation (the
"FDIC"); and

(iii) commercial paper rated A-1 by Standard & Poor's Ratings Group
("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's") or, if not
rated, issued by companies which have an outstanding debt issue rated AAA
by S&P or Aaa by Moody's.

The Fund will maintain a dollar-weighted average portfolio maturity of more
than three years but no more than ten years. A mortgage-related security will
be deemed to have an average maturity equal to its average life as determined
by the portfolio manager based upon the prepayment experience of the
underlying mortgage pools. In order to maintain a dollar-weighted average
portfolio maturity, Huntington will monitor the prepayment experience of the
underlying mortgage pools of the mortgage-related securities and will purchase
and sell securities in the portfolio to shorten or lengthen the average
maturity of the portfolio, as appropriate.

MORTGAGE-RELATED SECURITIES. Mortgage-related securities are securities that,
directly or indirectly, represent participations in, or are secured by and
payable from, loans secured by real property. Mortgage-related securities, as
the term is used in this Prospectus, include mortgage pass-through securities,
adjustable rate mortgage securities and derivative mortgage securities such as
collateralized mortgage obligations and stripped mortgage-backed securities.
Mortgage-related securities fall into three categories: (a) those issued or
guaranteed by the United States Government or one of its agencies or
instrumentalities, such as Government National Mortgage Association ("GNMA"),
Federal National Mortgage Association ("FNMA") and Federal Home Loan Mortgage
Corporation ("FHLMC"); (b) those issued by non-governmental issuers that
represent interests in, or are collateralized by, mortgage-related securities
issued or guaranteed by the United States Government or one of its agencies or
instrumentalities; and (c) those issued by non-governmental issuers that
represent an interest in, or are collateralized by, whole mortgage loans or
mortgage-related securities without a government guarantee but usually with
over-collateralization or some other form of private credit enhancement. Non-
governmental issuers referred to in (b) and (c) above include originators of
and investors in mortgage loans, including savings and loan associations,
mortgage bankers, commercial banks, investment banks and special purpose
subsidiaries of the foregoing.

MORTGAGE PASS-THROUGH SECURITIES. The mortgage pass-through securities in
which the Fund invests provide for the pass-through to investors of their pro-
rata share of monthly payments (including any prepayments) made by the
individual borrowers on the pooled mortgage loans, net of any fees paid to the
guarantor of such securities and the servicer of the underlying mortgage
loans. The Fund invests both in U.S. Government pass-through securities issued
by GNMA, FNMA and FHLMC, and in pass-through securities issued by non-
governmental issuers. Each of GNMA, FNMA and FHLMC guarantee timely
distributions of interest to certificate holders. GNMA and FNMA guarantee
timely distributions of scheduled principal. FHLMC generally guarantees only
ultimate collection of principal of the underlying mortgage loans.

ADJUSTABLE RATE MORTGAGE SECURITIES. The Fund may also invest in adjustable
rate mortgage securities ("ARMS"). ARMS are pass-through mortgage securities
collateralized by mortgages with

interest rates that are adjusted from time to time. The adjustments usually
are determined in accordance with a predetermined interest rate index and may
be subject to certain limits. While the values of ARMS, like other debt
securities, generally vary inversely with changes in market interest rates
(increasing in value during periods of declining interest rates and decreasing
in value during periods of increasing interest rates), the values of ARMS
should generally be more resistant to price swings than other debt securities
because the interest rates of ARMS move with market interest rates. The
adjustable rate feature of ARMS will not, however, eliminate fluctuations in
the prices of ARMS, particularly during periods of extreme fluctuations in
interest rates. Also, since many adjustable rate mortgages only reset on an
annual basis, it can be expected that the prices of ARMS will fluctuate to the
extent that changes in prevailing interest rates are not immediately reflected
in the interest rates payable on the underlying adjustable rate mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS. The Fund may invest in CMOs
(collateralized mortgage obligations and multi-class pass-through securities
unless the context otherwise indicates), which are derivative mortgage
securities. Collateralized mortgage obligations are debt instruments issued by
special purpose entities which are secured by pools of mortgage loans or other
mortgage-related securities. Multi-class pass-through securities are equity
interests in a trust composed of mortgage loans or other mortgage-related
securities. Payments of principal and interest on underlying collateral
provide the funds to pay debt service on the collateralized mortgage
obligation or make scheduled distributions on the multi-class pass-through
security. The Fund will invest only in CMOs which are rated AAA by an NRSRO.

In a CMO, a series of bonds or certificates is issued in multiple classes.
Each class of CMO, often referred to as a "tranche," is issued at a specific
coupon rate and has a stated maturity or final distribution date. Principal
prepayments on collateral underlying a CMO may cause it to be retired
substantially earlier than the stated maturities or final distribution dates.

The principal and interest on the underlying mortgages may be allocated
among the several tranches of a CMO in many ways. For example, certain
tranches may have variable or floating interest rates and others may be
stripped securities which provide only the principal or interest feature of
the underlying security. See "Stripped Mortgage-Backed Securities," below.
Generally, the purpose of the allocation of the cash flow of a CMO to the
various tranches is to obtain a more predictable cash flow to certain of the
individual tranches than exists with the underlying collateral of the CMO. As
a general rule, the more predictable the cash flow is on a CMO tranche, the
lower the anticipated yield will be on that tranche at the time of issuance
relative to prevailing market yields on mortgage-related securities. As part
of the process of creating more predictable cash flows on most of the tranches
of a CMO, one or more tranches generally must be created that absorb most of
the volatility in the cash flows on the underlying mortgage loans. The yields
on these tranches, which may include inverse floaters, IOs, POs, and Z
tranches, discussed below, are generally higher than prevailing market yields
on mortgage-related securities with similar maturities. As a result of the
uncertainty of the cash flows of these tranches, the market prices of and
yield on these tranches generally are more volatile.

The Fund may invest in any CMO tranche, including "inverse floaters" and "Z
tranches." An inverse floater is a CMO tranche with a coupon rate that moves
inversely to a designated index, such as LIBOR (London Inter-Bank Offered
Rate) or COFI (Cost of Funds Index). Like most other fixed-income securities,
the value of inverse floaters will decrease as interest rates increase.
Inverse
floaters, however, exhibit greater price volatility than the majority of
mortgage pass-through securities or CMOs. Coupon rates on inverse floaters
typically change at a multiple of the changes in the relevant index rate.
Thus, any rise in the index rate (as a consequence of an increase in interest
rates) causes a correspondingly greater drop in the coupon rate of an inverse
floater while any drop in the index rate causes a correspondingly greater
increase in the coupon of an inverse floater. Some inverse floaters also
exhibit extreme sensitivity to changes in prepayments. Inverse floaters would
be purchased by the Fund to attempt to protect against a reduction in the
income earned on the Fund's investments due to a decline in interest rates.

Z tranches of CMOs defer interest and principal payments until one or more
other classes of the CMO have been paid in full. Interest accretes on the Z
tranche, being added to principal, and is compounded through the accretion
period. After the other classes have been paid in full, interest payments
begin and continue through maturity. Z tranches have characteristics similar
to zero coupon bonds. Like a zero coupon bond, during its accretion period a Z
tranche has the advantage of eliminating the risk of reinvesting interest
payments at lower rates during a period of declining market interest rates. At
the same time, however, and also like a zero coupon bond, the market value of
a Z tranche can be expected to fluctuate more widely with changes in market
interest rates than would the market value of a tranche which pays interest
currently. In addition, changes in prepayment rates on the underlying mortgage
loans will affect the accretion period of a Z tranche, and therefore also will
influence its market value.

STRIPPED MORTGAGE-BACKED SECURITIES. Some of the mortgage-related securities
purchased by the Fund may represent an interest solely in the principal
repayments or solely in the interest payments on mortgage-backed securities
(stripped mortgage-backed securities or "SMBSs"). SMBSs are derivative multi-
class securities. SMBSs are usually structured with two classes and receive
different proportions of the interest and principal distributions on the pool
of underlying mortgage-backed securities. Due to the possibility of
prepayments on the underlying mortgages, SMBSs may be more interest-rate
sensitive than other securities purchased by the Fund. If prevailing interest
rates fall below the level at which SMBSs were issued, there may be
substantial prepayments on the underlying mortgages, leading to the relatively
early prepayments of principal-only SMBSs (the principal-only or "PO" class)
and a reduction in the amount of payments made to holders of interest-only
SMBSs (the interest-only or "IO" class). Therefore, interest-only SMBSs
generally increase in value as interest rates rise and decrease in value as
interest rates fall, counter to changes in value experienced by most fixed
income securities. If the underlying mortgages experience slower than
anticipated prepayments of principal, the yield on a PO class will be affected
more severely than would be the case with a traditional mortgage-related
security. Because the yield to maturity of an IO class is extremely sensitive
to the rate of principal payments (including prepayments) on the related
underlying mortgage-backed securities, it is possible that the Fund might not
recover its original investment on interest-only SMBSs if there are
substantial prepayments on the underlying mortgages. The Fund's inability to
fully recoup its investment in these securities as a result of a rapid rate of
principal prepayments may occur even if the securities are rated by an NRSRO.
In view of these considerations, Huntington or Piper intends to use these
characteristics of interest-only SMBSs to reduce the effects of interest rate
changes on the value of the Fund's portfolio, while continuing to pursue
current income.

U.S. GOVERNMENT SECURITIES. The U.S. Government securities in which the Fund
invests are either issued or guaranteed as to payment of principal and
interest by the U.S. Government, its agencies, or instrumentalities. The
current market prices for such securities are not guaranteed and will
fluctuate. Investments in U.S. Government securities are limited to:

(a)direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and

(b)notes, bonds, and discount notes of U.S. Government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives and Banks for Cooperatives; Federal Home
Loan Banks; Federal Home Loan Mortgage Corporation; Federal National
Mortgage Association; Government National Mortgage Association; Export-
Import Bank of the United States; Commodity Credit Corporation; Federal
Financing Bank; The Student Loan Marketing Association; National Credit
Union Administration; and Tennessee Valley Authority.

Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. Government, such as Government National Mortgage Association
participation certificates, are backed by the full faith and credit of the
U.S. Treasury. No assurances can be given that the U.S. Government will
provide financial support to other agencies or instrumentalities, since it is
not obligated to do so. These instruments are supported by:

(a)the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;

(b)the discretionary authority of the U.S. Government to purchase certain
obligations of an agency or instrumentality; or

(c)the credit of the agency or instrumentality.

SHORT-TERM TRADING. The Fund will use short-term trading to benefit from yield
disparities among different issues of securities or otherwise to achieve its
investment objective. To the extent that the Fund engages in short-term
trading, such activities will cause the Fund to pay greater mark-up charges.
The Fund's portfolio turnover rate is set forth in "Financial Highlights."

INVESTMENT RISKS. The Fund is subject to interest rate risk, which is the
potential for a decline in bond prices due to rising interest rates. In
general, bond prices vary inversely with interest rates. When interest rates
rise, bond prices generally fall. Conversely, when interest rates fall, bond
prices generally rise. Interest rate risk applies to U.S. Government
securities as well as other bonds. U.S. Government securities are guaranteed
only as to the payment of interest and principal. The current market prices
for such securities are not guaranteed and will fluctuate.

The Fund invests a significant portion of its assets in mortgage-related
securities and, as a result, is subject to prepayment risk. Prepayment risk
results because, as interest rates fall, homeowners are more likely to
refinance their home mortgages. When home mortgages are refinanced, the
principal on mortgage-related securities held by the Fund is "prepaid" earlier
than expected. The Fund must then reinvest the unanticipated principal
payments, just at a time when interest rates on new mortgage investments are
falling. Prepayment risk has two important effects on the Fund:

. When interest rates fall and additional mortgage prepayments must be
reinvested at lower interest rates, the income of the Fund will be reduced.

. When interest rates fall, prices on mortgage-backed securities may not rise
as much as comparable Treasury bonds because bond market investors may
anticipate an increase in mortgage prepayments and a likely decline in
income.

The Fund's investments in mortgage-related securities also subject the Fund
to extension risk. Extension risk is the possibility that rising interest
rates may cause prepayments to occur at a slower than expected rate. This
particular risk may effectively change a security which was considered short-
or intermediate-term at the time of purchase into a long-term security. Long-
term securities generally fluctuate more widely in response to changes in
interest rates than short- or intermediate-term securities.

The Fund's investments in mortgage-related securities include derivative
mortgage securities such as CMOs and stripped mortgage-backed securities
which, as discussed above, may involve risks in addition to those found in
other mortgage-related securities. The market experience of 1994 has shown
that certain derivative mortgage securities may be highly sensitive to changes
in interest and prepayment rates and, as a result, the prices of such
securities may be highly volatile. In addition, the market experience of 1994
has shown that during periods of rising interest rates, the market for certain
derivative mortgage securities may become more unstable and such securities
may become more difficult to sell as market makers either choose not to
repurchase such securities or offer prices, based on current market
conditions, which are unacceptable to the Fund.

OHIO TAX-FREE FUND

The objective of the Ohio Tax-Free Fund is to provide current income exempt
from federal income tax and Ohio personal income taxes. The Fund will attempt
to achieve its objective by investing in Ohio tax-exempt securities. "Ohio
tax-exempt securities" are debt obligations which (i) are issued by or on
behalf of the State of Ohio or its respective authorities, agencies,
instrumentalities and political subdivisions, and (ii) produce interest which,
in the opinion of bond counsel at the time of issuance, is exempt from federal
income tax and Ohio personal income taxes. As a matter of fundamental policy,
under normal market conditions at least 80% of the Fund's net assets will be
invested in Ohio tax-exempt securities. In addition, the Fund will not, as a
matter of fundamental policy, invest in securities the income from which is
treated as a preference item for purposes of the federal alternative minimum
tax. This policy will restrict the Fund's ability to invest in certain private
activity bonds issued after August 7, 1986.

The Fund will only invest in Ohio tax-exempt securities that are rated at
the time of purchase in one of the top three categories by an NRSRO(s) or, if
not rated, of comparable quality as determined by Huntington under guidelines
established by the Trustees. Based on current market conditions, it is
anticipated that the dollar-weighted average portfolio maturity of the Fund
will be between four and seven years. Under normal market conditions, the Fund
will not invest in obligations with a remaining maturity of more than 15 years
at the time of purchase.

The Fund may also invest in numerous types of short-term tax-exempt
instruments, which may be used to fund short-term cash requirements such as
interim financing in anticipation of tax collections, revenue receipts or bond
sales to finance various public purposes.

From time to time, the Fund may invest in obligations the interest on which
is subject to federal income tax or Ohio personal income taxes pending
investment in Ohio tax-exempt securities or for liquidity purposes. The Fund
may also hold a portion of its assets in cash or money market instruments, the
interest on which may not be exempt from federal or Ohio income taxes.

providing the credit enhancement (the "credit enhancer"), rather than the
issuer. However, credit enhanced securities will not be treated as having been
issued by the credit enhancer for diversification purposes, unless the Fund
has invested more than 10% of its assets in securities issued, guaranteed or
otherwise credit enhanced by the credit enhancer, in which case the securities
will be treated as having been issued both by the issuer and the credit
enhancer. The bankruptcy, receivership or default of the credit enhancer will
adversely affect the quality and marketability of the underlying security.

FIXED INCOME SECURITIES FUND

The objective of the Fixed Income Securities Fund is to achieve high current
income through investment in fixed income securities where the average
maturity of the Fund will not exceed 10 years.
The Fund may purchase obligations of the U.S. Government and its agencies and
instrumentalities, corporate bonds, debentures, nonconvertible fixed income
preferred stocks, mortgage pass-through securities, eurodollar certificates of
deposit and eurodollar bonds. The Fund may also invest up to 10% of its net
assets in non-U.S. dollar denominated bonds. Both fixed and variable rate
issues may be purchased. Debt securities will be rated at the time of purchase
in one of the top three categories by an NRSRO(s) or, if not rated, of
comparable quality as determined by Huntington under guidelines established by
the Trustees. As a matter of fundamental policy, under normal market
conditions, the Fund will invest at least 65% of its assets in fixed income
securities. The Fund may also, under normal market conditions, invest a
portion of its assets in cash equivalents, including repurchase agreements and
the shares of money market mutual funds, for liquidity purposes.

SHORT/INTERMEDIATE FIXED INCOME SECURITIES FUND
The objective of the Short/Intermediate Fixed Income Securities Fund is to
achieve current income through investment in fixed income securities with a
maximum maturity or average life for individual issues of 5 years or less at
the time of purchase and a dollar-weighted average portfolio maturity of more
than 2 but less than 5 years. The Fund may purchase obligations of the U.S.
Government and its agencies and instrumentalities, corporate bonds,
debentures, non-convertible fixed income preferred stocks, mortgage pass-
through securities, eurodollar certificates of deposit and eurodollar bonds.
The Fund may also invest up to 10% of its net assets in non-U.S. dollar
denominated bonds and non-convertible fixed-income European Currency Unit
bonds. Both fixed and variable rate issues may be purchased. Debt securities
will be rated at the time of purchase in one of the top three categories by an
NRSRO(s) or, if not rated, of comparable quality as determined by Huntington.
As a matter of fundamental policy, under normal market conditions the Fund
will invest at least 65% of its assets in fixed income securities. The Fund
may also, under normal market conditions, invest a portion of its assets in
cash equivalents, including repurchase agreements and the shares of money
market mutual funds, for liquidity purposes.

ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES

OHIO TAX-EXEMPT SECURITIES

The two principal classifications of Ohio tax-exempt securities are general
obligation and limited obligation (or revenue) securities. General obligation
securities involve the credit of an issuer possessing taxing power and are
payable from the issuer's general unrestricted revenues. The characteristics
and methods of enforcement of general obligation securities vary according to
the law applicable to the particular issuer. Limited obligation securities are
payable only from the revenues derived from a particular facility or class of
facilities, or a specific revenue source, and generally are
not payable from the unrestricted revenues of the issuer. Private activity
bonds and industrial development bonds generally are limited obligation
securities, the credit and quality of which are usually directly related to
the credit of the private user of the facilities.

The economy of Ohio, while diversifying more into the service area,
continues to rely in part on durable goods manufacturing, which is largely
concentrated in motor vehicles and equipment, steel, rubber products and
household appliances. As a result, general economic activity in Ohio, as in
many other industrially-developed states, tends to be more cyclical than in
some other states and in the nation as a whole. Agriculture also is an
important segment of the economy in the State, and the State has instituted
several programs to provide financial assistance to farmers. Ohio's economy,
including particularly an unemployment rate usually somewhat higher than the
national average, has had varying effects on the different geographic areas of
the State and the political subdivisions located in such geographic areas.
Although revenue obligations of the State or its political subdivisions may be
payable from a specific source or project, there can be no assurance that
future economic difficulties and the resulting impact on state and local
government finances will not adversely affect the market value of the Ohio
tax-exempt securities in an Ohio Fund, as defined below, or the ability of the
respective obligors to make timely payment of interest and principal on such
obligations. See the Statement of Additional Information for further
discussion of special considerations regarding investments in Ohio tax-exempt
securities.

NON-DIVERSIFICATION

The Ohio Municipal Money Market Fund and the Ohio Tax-Free Fund (the "Ohio
Funds") are non-diversified Funds under the Investment Company Act of 1940,
which means that they may invest their assets in the obligations of fewer
issuers than would be the case if they were "diversified". The Ohio Funds'
ability to invest a relatively high percentage of their assets in the
securities of a limited number of issuers involves an increased risk of loss
to an Ohio Fund if any one issuer is unable to make interest or principal
payments or if the market value of the issuer's securities declines.

Although non-diversified under the Investment Company Act, the Ohio Funds
intend to comply with Subchapter M of the Internal Revenue Code. This
undertaking requires that at the end of each quarter of the taxable year, with
regard to at least 50% of each Ohio Fund's total assets, no more than 5% of
its total assets are invested in the assets of a single issuer; beyond that,
no more than 25% of its total assets are invested in the securities of a
single issuer.

DEFENSIVE INVESTMENT STRATEGIES

At times Huntington may judge that conditions in securities markets may make
pursuing a Fund's basic investment strategy inconsistent with the best
interests of the Fund's shareholders. At such times, Huntington may
temporarily use alternative strategies, primarily designed to reduce
fluctuations in the value of a Fund's assets. In implementing these temporary
"defensive" strategies, a Fund may temporarily place all or a portion of its
assets in cash, U.S. Government securities, debt securities which Huntington
considers to be of comparable quality to the acceptable investments of the
Fund and other investments which Huntington considers consistent with such
strategies. In the case of the Ohio Funds, a Fund's alternative strategies may
give rise to income which is not exempt from federal or state taxes.

OPTIONS AND FUTURES CONTRACTS (ALL FUNDS OTHER THAN THE MONEY MARKET FUNDS AND
THE OHIO TAX-FREE FUND)

A Fund may seek to increase its current return by writing covered call
options and covered put options on its portfolio securities or other
securities in which it may invest. A Fund receives a premium
from writing a call or put option, which increases a Fund's return if the
option expires unexercised or is closed out at a net profit. A Fund may also
buy and sell put and call options on its securities for hedging purposes. When
a Fund writes a call option on a portfolio security, it gives up the
opportunity to profit from any increases in the price of the security above
the exercise price of the option. When it writes a put option, a Fund takes
the risk that it will be required to purchase a security from the option
holder at a price above the current market price of the security. A Fund may
terminate an option that it has written prior to expiration by entering into a
closing purchase transaction in which it purchases an option having the same
terms as the option written.

A Fund may purchase and sell futures contracts and related options to hedge
against changes in the value of securities it owns or expects to purchase.
Futures contracts on a variety of stock and bond indices are currently
available. An index is intended to represent a numerical measure of market
performance by the securities making up the index. A Fund may purchase and
sell futures contracts on any index approved for trading by the Commodity
Futures Trading Commission to hedge against general changes in market values
of securities which a Fund owns or expects to purchase. A Fund may also
purchase and sell put and call options on index futures or directly on the
underlying indices for hedging purposes. In addition, a Fund may purchase and
sell futures contracts and related options on individual debt securities which
a Fund owns or expects to purchase, if and when such futures contracts and
options become available.

In connection with its futures transactions, a Fund will be required to
deposit as "initial margin" an amount of cash and/or securities. Thereafter,
subsequent payments (referred to as "variation margin") are made to and from
the broker to reflect changes in the value of the futures contract. A Fund
will not generally purchase or sell futures contracts or purchase or sell
options on futures contracts if as a result the sum of initial margin deposits
on a Fund's existing futures contracts and options written by a Fund plus
premiums paid for outstanding options on futures contracts purchased by a
Fund, would exceed 5% of a Fund's net assets.

Options and futures transactions involve various risks, including the risk
that a Fund may be unable at times to close out its positions, that such
transactions may not accomplish their purposes because of imperfect market
correlations, or that Huntington may not forecast market movements correctly.
Options and futures transactions involve costs and may result in losses. The
effective use of options and futures strategies by a Fund is dependent upon,
among other things, a Fund's ability to terminate options and futures
positions at times when Huntington deems it desirable to do so. Although a
Fund will enter into an options or futures contract position only if
Huntington believes that a liquid secondary market exists for such options or
futures contract, there is no assurance that a Fund will be able to effect
closing transactions at a particular time or at an acceptable price.

The Funds generally expect that their options and futures transactions will
be conducted on recognized exchanges. In certain instances, however, a Fund
may purchase and sell options in the over-the-counter ("OTC") market. A Fund's
ability to terminate options in the OTC market may be more limited than for
exchange-traded options and may also involve the risk that securities dealers
participating in such transactions would be unable to meet their obligations
to a Fund. A Fund will, however, engage in OTC market transactions only when
appropriate exchange-traded transactions are unavailable and when, in the
opinion of Huntington, the pricing mechanism and liquidity of the OTC market
is satisfactory and the participants are responsible parties likely to meet
their contractual obligations.

The use of options and futures strategies also involves the risk of
imperfect correlation between movements in the prices of options and futures
contracts and movements in the value of the underlying securities that are the
subject of a hedge. The successful use of these strategies further depends on
the ability of Huntington to forecast market movements correctly.

For more information about any of the options or futures portfolio
transactions described above, see the Statement of Additional Information.

FOREIGN INVESTMENTS

Except as otherwise limited in this Prospectus, a Fund may invest some or
all of its assets in securities principally traded in foreign markets. Since
foreign securities are normally denominated and traded in foreign currencies,
the value of a Fund's assets may be affected favorably or unfavorably by
currency exchange rates and exchange control regulation. Exchange rates with
respect to certain currencies may be particularly volatile. There may be less
information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those
in the United States. The securities of some foreign companies are less liquid
and at times more volatile than securities of comparable U.S. companies.
Foreign brokerage commissions and other fees are also generally higher than in
the United States. Foreign settlement procedures and trade regulations may
involve certain risks (such as delays in payment or delivery of securities or
in the recovery of a Fund's assets held abroad) and expenses not present in
the settlement of domestic investments.

In addition, with respect to certain foreign countries, there is a
possibility of nationalization or expropriation of assets, confiscatory
taxation, political or financial instability and diplomatic developments which
could affect the value of investments in those countries. In certain
countries, legal remedies available to investors may be more limited than
those available with respect to investments in the United States or other
countries. The laws of some foreign countries may limit a Fund's ability to
invest in securities of certain issuers located in those countries. Special
tax considerations apply to foreign securities.

A Fund may buy or sell foreign currencies and forward foreign currency
exchange contracts for hedging purposes in connection with its foreign
investments.

A more detailed explanation of foreign investments, and the risks associated
with them, is included in the Statement of Additional Information.

REPURCHASE AGREEMENTS

Certain securities in which a Fund invests may be purchased pursuant to
repurchase agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
Government securities or other securities to a Fund and agree at the time of
sale to repurchase them at a mutually agreed upon time and price. A Fund or
its custodian will take possession of the securities subject to repurchase
agreements and these securities will be marked to market daily. To the extent
that the original seller does not repurchase the securities from a Fund, a
Fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by a Fund might be delayed
pending court action. The Trustees believe that under the regular procedures
normally in effect for custody of a Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor
of a Fund and allow retention or disposition of such securities. A Fund will
only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are found by Huntington
to be creditworthy pursuant to guidelines established by the Trustees.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

A Fund may purchase securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which a Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause a Fund to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, a Fund may pay more
or less than the market value of the securities on the settlement date.

A Fund may dispose of a commitment prior to settlement if the Fund's adviser
deems it appropriate to do so.

In connection with its ability to purchase securities on a when-issued or
delayed delivery basis, the Mortgage Securities Fund may enter into mortgage
"dollar rolls" in which the Fund sells securities for delivery in the current
month and simultaneously contracts with the same counterparty to repurchase
similar (same type, coupon and maturity) but not identical securities on a
specified future date. The Fund gives up the right to receive principal and
interest paid on the securities sold. However, the Fund would benefit to the
extent of any difference between the price received for the securities sold
and the lower forward price for the future purchase plus any fee income
received. Unless such benefits exceed the income, capital appreciation and
gain or loss due to mortgage prepayments that would have been realized on the
securities sold as part of the mortgage dollar roll, the use of this technique
will diminish the investment performance of the Fund compared with what such
performance would have been without the use of mortgage dollar rolls. The Fund
will hold and maintain in a segregated account until the settlement date, cash
or liquid high-grade debt securities in an amount equal to the forward
purchase price. The benefits derived from the use of mortgage dollar rolls may
depend upon Piper's ability to predict correctly mortgage prepayments and
interest rates. There is no assurance that mortgage dollar rolls can be
successfully employed. In addition, the use of mortgage dollar rolls by the
Fund while remaining substantially fully invested increases the amount of the
Fund's assets that are subject to market risk to an amount that is greater
than the Fund's net asset value, which could result in increased volatility of
the price of the Fund's shares. The Mortgage Securities Fund may invest up to
35% of its total assets in securities purchased on a when-issued or delayed
delivery basis.

LENDING OF PORTFOLIO SECURITIES

In order to generate additional income, a Fund may lend its portfolio
securities on a short-term basis to brokers, dealers or other financial
institutions. A Fund will only enter into loan arrangements with brokers,
dealers or other financial institutions which Huntington has determined are
creditworthy under guidelines established by the Trustees and must receive
collateral equal to at least 102% of the current market value of the
securities loaned. The collateral received when the Fund lends portfolio
securities must be valued daily and, should the market value of the loaned
securities increase, the borrower must furnish additional collateral to the
Fund. As a matter of fundamental policy, the aggregate value of all securities
loaned by a Fund may not exceed 20% of the Fund's total assets.

There is the risk that, when lending portfolio securities, the securities
may not be available to a Fund on a timely basis and a Fund may, therefore,
lose the opportunity to sell the securities at a desirable price. In addition,
in the event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.

INVESTMENT RESTRICTIONS

Each Fund has adopted certain investment restrictions and limitations for
the purpose of reducing its exposure in specific situations. These investment
limitations are fundamental policies and may be changed with respect to any
Fund only by a vote of a majority of the outstanding shares of that Fund.

No Fund will:

(1)Except for the Ohio Funds, invest more than 5% of the value of its
total assets in the securities of any one issuer (this limitation does
not apply to securities issued or guaranteed by the U.S. Government or
any of its agencies or instrumentalities or to repurchase agreements
secured by such obligations);

(2)Invest 25% or more of the value of its total assets (i) in securities
of companies primarily engaged in any one industry (other than the U.S.
Government, its agencies and instrumentalities), and (ii) with respect
to the Ohio Funds, in municipal obligations of one issuer or which are
related in such a way that, in the opinion of Huntington, an economic,
business or political development other than an Ohio state-wide,
national or international development, affecting one such obligation
would also affect the others in a similar manner. Such concentration
may occur as a result of changes in the market value of portfolio
securities, but such concentration may not result from investment;

(3)Except for investments by the Money Market Fund in commercial paper
issued under Section 4(2) of the Securities Act of 1933 and certain
other restricted securities which meet the criteria for liquidity as
established by the Trustees, invest more than 10% of the value of its
total assets in illiquid securities, including restricted securities,
repurchase agreements of over seven days' duration and OTC options; and

(4)Borrow in excess of 5% of its total assets (borrowings are permitted
only as a temporary measure for extraordinary or emergency purposes) or
pledge (mortgage) its assets as security for any indebtedness.

HOW THE FUNDS VALUE THEIR SHARES

Each Money Market Fund attempts to stabilize the net asset value of its
Trust Shares at $1.00 by valuing its portfolio securities using the amortized
cost method. The net asset value per Trust Share is determined by adding the
interest of the Trust Shares in the value of all securities and other assets
of a Fund, subtracting the interest of the Trust Shares in the liabilities of
a Fund and those attributable to Trust Shares, and dividing the remainder by
the total number of Trust Shares outstanding.

A Fund cannot guarantee that its net asset value will always remain at $1.00
per share.

The net asset value for Trust Shares of each of the other Funds is
determined by adding the interest of the Trust Shares in the market value of
all securities and other assets of a Fund, subtracting the interest of the
Trust Shares in the liabilities of a Fund and those attributable to Trust
Shares, and dividing the remainder by the total number of Trust Shares
outstanding. The net asset value of a
Fund's Trust Shares will differ from that of Investment Shares due to the
expense of the Rule 12b-1 fee applicable to a Fund's Investment Shares.

Securities for which market quotations are readily available are stated at
market value. Short-term investments with remaining maturities of 60 days or
less at the time of purchase are stated at amortized cost, which approximates
market value. Debt securities for which market quotations are not readily
available will be valued on the basis of valuations provided by pricing
services approved by the Trustees. Pricing services often use information with
respect to transactions in bonds, quotations from bond dealers, market
transactions in comparable securities, and various relationships between
securities in determining value. All other Fund assets are valued at their
fair value following procedures approved by the Trustees.

The Money Market Funds calculate net asset value per Trust Share at 12:00
noon (Eastern Time) and as of the close of the New York Stock Exchange
(currently 4:00 p.m. Eastern Time) on each Business Day. The other Funds
calculate net asset value per Trust Share as of the close of the New York
Stock Exchange (currently 4:00 p.m. Eastern Time) on each Business Day. As
used herein, a "Business Day" constitutes Monday through Friday except (i)
days on which there are not sufficient changes in the value of a Fund's
portfolio securities that its net asset value might be materially affected;
(ii) days during which no shares are tendered for redemption and no orders to
purchase shares are received; and (iii) the following holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

HOW TO BUY TRUST SHARES

Investors may purchase Trust Shares in each of the Funds through procedures
established by the the Distributor in connection with the requirements of
fiduciary, advisory, agency and other similar accounts maintained by or on
behalf of customers of Huntington or its affiliates or correspondent banks
(collectively, the "Banks"). Texas residents must purchase shares through the
Distributor at 1-800-618-8573. Trust Shares of each Fund are purchased at the
appropriate net asset value per Trust Share next determined after the order is
transmitted to the Funds' transfer agent, Federated Services Company (the
"Transfer Agent"). Trust Shares in each Money Market Fund purchased prior to
10:30 a.m. (Eastern Time) begin earning dividends that day; Trust Shares
purchased after such time begin earning dividends on the following day.

Trust Shares will normally be held in the name of the Bank effecting the
purchase on the shareholder's behalf, and it is the Bank's responsibility to
transmit purchase or redemption orders to the Transfer Agent. Shareholders
will receive a confirmation of each transaction in their account, which will
show the total number of Trust Shares of each Fund owned. The Funds will not
issue certificates representing Trust Shares.

If a shareholder pays for Trust Shares by check and the check does not
clear, the purchase will be cancelled, and such shareholder may be charged a
fee and will be liable for any losses incurred. Neither initial nor subsequent
investments will be made by third party check. For more information or
assistance regarding the purchase of Trust Shares of any Fund, call the Mutual
Fund Services Center at (in Ohio) 614-463-5580, or (outside the 614 Area Code)
800-253-0412.

From time to time, the Trust may temporarily suspend the offering of shares
of one or more of the Funds or any class thereof. During the period of any
such suspension and depending on the reasons for the suspension, persons who
are already shareholders of any such Fund or class may be permitted
to continue to purchase additional shares and to have dividends reinvested.
The Trust or the Distributor may refuse any order to purchase shares or waive
any minimum purchase requirements.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in Trust Shares of a Fund is $1,000.
Subsequent investments in a Fund may be made at any time in amounts of at
least $500.

SYSTEMATIC INVESTMENT PROGRAM

Once an account has been opened, holders of Trust Shares of a Fund may add
to their investment on a regular basis in minimum amounts of at least $50.
Under this program, funds will be automatically withdrawn periodically from
the shareholder's account and invested in Trust Shares of a Fund at the
applicable public offering price per share next determined after an order is
received by the Transfer Agent. Shareholders may apply for participation in
this program by contacting the Mutual Fund Services Center.

HOW TO EXCHANGE TRUST SHARES AMONG THE FUNDS

Shareholders may exchange Trust Shares in any Fund for Trust Shares in any
other Fund at the respective net asset values per Trust Share next determined
after receipt of the request in good order. This privilege is available to
shareholders resident in any state in which the Fund shares being acquired may
be sold. Exchange requests received prior to 4:00 p.m. (Eastern Time) will be
effected at the next determined net asset value per Trust Share as of that
Business Day. Exchange requests received after 4:00 p.m. (Eastern Time) will
be effected at the next determined net asset value per Trust Share on the
following Business Day. Holders of Trust Shares automatically receive the
Trust's telephone exchange service unless they have instructed their Bank to
the contrary. Exchange instructions given by telephone may be electronically
recorded and will be binding upon the shareholder. Because telephone exchange
requests will be honored from anyone who provides the correct information
(described below), this service involves a possible risk of loss if someone
uses the service without the shareholder's permission.

1.By Phone:Mutual Fund Services Center (in Ohio) 614-463-5580 (outside the
614 Area Code) 800-253-0412

2.By Mail:The Huntington Trust Company, N.A. 41 South High Street (HC 1131)
Columbus, OH 43287 Attn: Mutual Fund Services Center

In order to make an exchange, shareholders will be required to maintain the
applicable minimum account balance in each Fund in which shares are owned and
must satisfy the minimum initial and subsequent purchase amounts of the Fund
into which shares are exchanged.

To exchange by letter or by telephone, a shareholder must state (1) the name
of the Fund from which the exchange is to be made (and designating that Trust
Shares are involved), (2) the name(s) and address on the shareholder account,
(3) the account number, (4) the dollar amount or number of Trust Shares to be
exchanged, and (5) the Fund into which the Trust Shares are to be exchanged.
Written exchange requests must be endorsed by the shareholder, and it may be
necessary to have the shareholder's signature guaranteed by a member firm of a
national securities exchange or by a commercial bank, savings and loan
association or trust company. Further documentation may be
required, and a signature guarantee is generally required from corporations,
executors, administrators, trustees and guardians. (See "Redeeming By Mail"
below.)

An exchange is treated as a sale for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may
be realized.

The Trust's exchange privileges may be terminated or modified. Except as
indicated below, shareholders will be given 60 days' prior notice of any such
termination or any material amendment of existing exchange privileges. No
notice will be given when the only material effect of an amendment is to
reduce or eliminate any charges payable at the time of an exchange or under
certain extraordinary circumstances, such as in connection with the suspension
of the sale or redemption of Fund shares. If reasonable procedures are not
followed by the Funds, they may be liable for losses due to unauthorized or
fraudulent telephone instructions.

HOW TO REDEEM TRUST SHARES

Shareholders may redeem all or any portion of the Trust Shares in their
account on any Business Day at the appropriate net asset value per Trust Share
next determined after a redemption request in proper form is received by the
Transfer Agent. As described below, shareholders may redeem Trust Shares by
telephone or in writing, and may receive redemption proceeds by wire.

If an investor purchases Trust Shares by check and wishes to redeem those
Trust Shares before the check has cleared, the Trust may delay payment of any
redemption proceeds until the check clears. Under unusual circumstances, a
Fund may suspend redemptions or postpone payment for more than seven days, as
permitted by federal securities law.

REDEEMING BY TELEPHONE

Telephone requests for redemption may be made by calling the Mutual Fund
Services Center at (in Ohio) 614-463-5580 or (outside the 614 Area Code) 800-
253-0412.

Shareholders of the Money Market Fund, Ohio Municipal Money Market Fund and
U.S. Treasury Money Market Fund who request a redemption before 10:30 a.m.
(Eastern Time) will usually have the proceeds wired the same day but will not
be entitled to that day's dividend; redemption requests received after 10:30
a.m. (Eastern Time) will receive that day's dividend and the proceeds will
normally be wired the following Business Day. Telephone requests for
redemptions in the Income and Equity Funds must be received prior to 4:00 p.m.
(Eastern Time) to receive that day's net asset value and the redemption
proceeds will be paid in federal funds, normally on the next Business Day.

Holders of Trust Shares automatically receive the Trust's telephone
redemption service unless they have instructed their Bank to the contrary.
Because telephone redemption requests will be honored from anyone who provides
the correct information (described below), this service involves a possible
risk of loss if someone uses the service without the shareholder's permission.
Anyone making a telephone redemption request must furnish (1) the name and
address of record of the registered owner(s), (2) the account number, (3) the
amount to be withdrawn, and (4) the name of the person making the request.
Checks for telephone redemptions will be issued only to the registered
shareholder(s) and mailed to the last address of record. If at anytime the
Trust shall determine it necessary to terminate or modify this method of
redemption, shareholders will be promptly notified. Telephone redemption
instructions may be recorded.

In the event of extreme economic or market conditions, a shareholder may
experience difficulty in redeeming by telephone. If such a case should occur,
another method of redemption, such as through
written request, should be considered. If reasonable procedures are not
followed by the Funds, they may be liable for losses due to unauthorized or
fraudulent telephone instructions.

REDEEMING BY MAIL

Redemption requests may be made by writing The Huntington Trust Company,
N.A., 41 South High Street (HC 1131), Columbus, Ohio 43287, Attention: Mutual
Fund Services Center. Written redemption requests must be signed by the
shareholder, and it may be necessary to have the shareholder's signature
guaranteed. Further documentation may be required, and a signature guarantee
is generally required from corporations, executors, administrators, trustees,
and guardians.

Signatures on written redemption requests must be guaranteed by:

--a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the FDIC;

--a member of the New York, American, Midwest, or Pacific Stock Exchanges;

--a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or

--any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.

The Funds do not accept signatures guaranteed by a notary public.

The Funds and the Transfer Agent have adopted standards for accepting
signature guarantees from the above institutions. The Funds may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Funds and the Transfer Agent reserve the
right to amend these standards at any time without notice.

Shares will be redeemed at the net asset value determined as of the end of
the Business Day on which the written redemption request is received by the
Transfer Agent.

Redemptions with a value of up to $100,000 will be wired at a shareholder's
request, and a separate charge for this service may apply. Redemption proceeds
may be wired to any bank account specified by the shareholder in writing. If a
shareholder requests a wire transfer by telephone, redemption proceeds may be
wired only to the bank previously designated by the shareholder or otherwise
designated by the shareholder in writing as described below. If a shareholder
has authorized expedited wire redemption, Trust Shares will be redeemed at the
appropriate net asset value per Trust Share next determined after receipt of
the request, and the proceeds normally will be sent to the designated bank
account the following Business Day. In other circumstances, redemption
proceeds will normally be wired within seven days. The proceeds from the
redemption of Shares purchased by check are not available, and the shares may
not be exchanged, until the check has cleared. To change the name of the bank
account to which redemption proceeds will be wired, a shareholder should send
a written request (and, if necessary, with the shareholder's signature
guaranteed) to The Huntington Trust Company, N.A., 41 South High Street (HC
1131), Columbus, Ohio 43287, Attention: Mutual Fund Services Center.

If a shareholder owns fewer shares of a Fund than the minimum amount set by
the Trustees due to shareholder redemptions (presently, shares with a value of
$1,000 or less), the Trust may redeem those shares and forward the redemption
proceeds to the shareholder. A shareholder will receive at least 30 days'
written notice before the Trust redeems shares, and an additional purchase of
shares of the appropriate Fund can be made to avoid redemption. This
requirement does not apply because of changes to the Fund's net asset value.

MANAGEMENT OF THE TRUST

The Trustees of the Trust are responsible for generally overseeing the
conduct of each Fund's business. The Huntington Trust Company, National
Association, Huntington Center, 41 South High Street, Columbus, Ohio 43287,
serves as investment adviser to the Funds pursuant to an investment advisory
agreement with the Trust. Huntington is an indirect wholly-owned subsidiary of
Huntington Bancshares Incorporated, a registered bank holding company with
executive offices located at Huntington Center, 41 South High Street,
Columbus, Ohio 43287.

Subject to the supervision of the Trustees, Huntington provides a continuous
investment program for the Funds, including investment research and management
with respect to all securities, instruments, cash and cash equivalents in the
Funds. The Trust pays Huntington management fees, computed daily and payable
monthly, for each of the Funds at the following annual rates: Money Market
Fund and Ohio Municipal Money Market Fund: .30% of the first $500 million of
average daily net assets of the Fund, .25% of the next $500 million, and .20%
of any amount over $1 billion; U.S. Treasury Money Market Fund: .20% of the
Fund's average daily net assets; Growth Fund and Income Equity Fund: .60% of
the Fund's average daily net assets; and Mortgage Securities Fund, Ohio Tax-
Free Fund, Fixed Income Securities Fund and Short/Intermediate Fixed Income
Securities Fund: .50% of the Fund's average daily net assets. Huntington may
periodically waive all or a portion of its management fee with respect to any
Fund to increase the net income of the Fund available for distribution as
dividends.

Adviser's Background. The Huntington Trust Company, N.A., a national banking
association, is an indirect, wholly-owned subsidiary of Huntington Bancshares
Incorporated ("HBI"). With $18 billion in assets as of December 31, 1994, HBI
is a major Midwest regional bank holding company. Through its subsidiaries and
affiliates, HBI offers a full range of services to the public, including:
commercial lending, depository services, cash management, brokerage services,
retail banking, international services, mortgage banking, investment advisory
services, and trust services. Huntington, a recognized investment advisory and
fiduciary services subsidiary of HBI, provides investment advisory services
for corporate, charitable, governmental, institutional, personal trust and
other assets. Huntington is responsible for over $10 billion of assets, and
has investment discretion over approximately $3 billion of that amount.

Huntington has served as investment adviser to mutual funds since 1987 and
has over 75 years of experience providing investment advisory services to
fiduciary accounts.

As part of its regular banking operations, Huntington may make loans to
public companies. Thus, it may be possible, from time to time, for the Funds
to hold or acquire the securities of issuers which are also lending clients of
Huntington. The lending relationship will not be a factor in the selection of
securities for the Funds.

Sub-Adviser. Under the terms of a sub-advisory contract between Huntington
and Piper, Piper will assist Huntington in the purchase or sale of the
Mortgage Securities Fund's portfolio instruments. Huntington pays Piper
management fees, computed and paid monthly, for the Mortgage Securities Fund
at an annual rate of .15% of the Mortgage Securities Fund's average daily net
assets.

Sub-Adviser's Background. Piper, located at Piper Jaffray Tower, Post Office
Box 28, Minneapolis, Minnesota 55440, was formed in 1985. Piper is a wholly-
owned subsidiary of the publicly traded investment banking firm, Piper Jaffray
Companies, Inc. Piper provides investment management services, focusing on
ERISA/401 (k), public funds, Taft Hartley, endowment/foundation, pension
plans,
and personal wealth. As of March 31, 1995, Piper managed 38 mutual funds, five
commingled funds, and individual/institutional accounts in excess of $10.3
billion in assets.

Piper's investment staff is comprised of 25 managers, with an average of 15
years of experience. Piper's portfolio management expertise extends into
mortgage-backed securities, bonds, equities, balanced accounts, and short-term
cash management services.

Philip H. Farrington, a Vice President of Huntington Trust Company, N.A.,
has been a co-portfolio manager of the Growth Fund since April of 1994. Mr.
Farrington has more than 30 years of investment management experience. He has
held the positions of Chief Investment Officer, Portfolio Manager, and
Director of Research for major banks and asset management companies. He is a
member of the equity management team at Huntington. Mr. Farrington is a
graduate of Harvard University.

James Gibboney, Jr., a Vice President of Huntington Trust Company, N.A., has
been a co-portfolio manager of the Growth Fund since November of 1993. Mr.
Gibboney, a Chartered Financial Analyst, serves as one of Huntington's
balanced portfolio managers. Prior to joining Huntington in 1989, he gained
more than 11 years of investment management experience as portfolio manager
for a major investment firm, a trust company, and a state government agency.
He received his undergraduate degree in Finance from the Ohio State University
and an MBA from Xavier University.

Thomas J. Sauer, a Vice President of Huntington Trust Company, N.A., has
been a co-portfolio manager of the Growth Fund since November of 1993. Mr.
Sauer, a Chartered Financial Analyst, has more than 20 years of investment
experience including that of investment counselor and investment manager for a
major Midwest foundation and medical institution. He received his
undergraduate degree from Ohio University, completed graduate course work at
Case Western Reserve University, and received an MBA from Baldwin Wallace
College.

James M. Buskirk, Chief Investment Officer of Huntington Trust Company,
N.A., has been the portfolio manager of the Income Equity Fund since January
of 1991. As Chief Investment Officer of Huntington, Mr. Buskirk has ultimate
responsibility for all investment activities. He brings more than 14 years of
investment experience to Huntington. His background includes extensive
experience in managing both personal and employee benefit balanced portfolios
for a major investment advisory company and bank holding company. Mr. Buskirk
is a Chartered Financial Analyst. He received his undergraduate degree in
Finance from the Ohio State University and his MBA from the University of
Oregon.

Worth Bruntjen, a Senior Vice President of Piper Capital Management, has
been the senior portfolio manager of the Mortgage Securities Fund since its
inception. Mr. Bruntjen is the senior portfolio manager of open-end mutual
funds, distributed by Piper Jaffray, and closed-end bond funds listed on the
New York Stock Exchange. He is also fixed income manager for a variety of
client portfolios, including foundations, pension plans, state funds, and
individuals. He attended the University of Minnesota, the University of
Heidelberg, and Carleton College. Mr. Bruntjen has approximately 27 years of
investment experience.

Marijo Goldstein has been a Senior Vice President of Piper Capital
Management since November, 1993, prior to which she had been a Vice President
of Piper Capital Management since 1991. She has been a co-portfolio manager of
the Mortgage Securities Fund since its inception. Ms. Goldstein joined Piper
Capital Management as a fixed income analyst in 1988. Prior to that, she was
an analyst in the Technical Research Department at Piper Jaffray, Inc.
beginning in 1985. She earned her MBA from
the University of Minnesota and her B.S. degree in Information Systems
Management from the University of Maryland.

William G. Doughty, an Assistant Vice President of Huntington Trust Company,
N.A., has been the portfolio manager of the Ohio Tax-Free Fund since its
inception. Mr. Doughty has more than 24 years of experience in the investment
field. He is responsible for fixed income portfolio management and heads the
fixed income trading operation at Huntington. Mr. Doughty is a graduate of
Franklin University with a degree in Business Administration and has an MBA
from the University of Dayton.

Stephen M. Geis, a Vice President of Huntington Trust Company, N.A., has
been the portfolio manager of the Short/Intermediate Fixed Income Securities
Fund and the Fixed Income Securities Fund since October of 1989. Mr. Geis, a
Chartered Financial Analyst, serves as Huntington's senior fixed income
manager. Prior to joining Huntington in 1988, he spent nearly ten years as a
fixed income manager for a major insurance company and treasurer of a regional
bank. Mr. Geis received his undergraduate degree from the College of Wooster,
his MBA from the University of Dayton, and his Juris Doctorate from Capital
University.

DISTRIBUTION OF TRUST SHARES

Federated Securities Corp. is the principal distributor for shares of each
Fund. It is a Pennsylvania corporation organized on November 14, 1969, and is
the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.

ADMINISTRATION OF THE FUNDS

Federated Administrative Services, a subsidiary of Federated Investors,
provides the Funds with certain administrative personnel and services
necessary to operate the Funds.

For these services, the Short/Intermediate Fixed Income Fund and the Income
Equity Fund pay a fee, computed and payable daily, to Federated Administrative
Services at a blended annual rate, based on the daily net assets of the Trust
taken as a whole, as specified below:

<TABLE>
<CAPTION>
ADMINISTRATIVE FEE AVERAGE AGGREGATE DAILY NET ASSETS OF THE TRUST
------------------ -----------------------------------------------
<C> <S>
.150 of 1% on the first $250 million
.125 of 1% on the next $250 million
.100 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>

The administrative fee paid by any Fund during any fiscal year will not be
less than $50,000 with regard to the above named Funds.

For these services, each of the Growth Fund, the Mortgage Securities Fund,
the Ohio Tax-Free Fund, the Fixed Income Securities Fund, the Money Market
Fund, the Ohio Municipal Money Market Fund, and the U.S. Treasury Money Market
Fund pays a fee, computed and payable daily, to Federated Administrative
Services at a blended annual rate, based on the daily net assets of the Trust
taken as a whole, as specified below:

<TABLE>
<CAPTION>
ADMINISTRATIVE FEE AVERAGE AGGREGATE DAILY NET ASSETS OF THE TRUST
------------------ -----------------------------------------------
<C> <S>
.160 of 1% on the first $750 million
.135 of 1% on the next $500 million
.110 of 1% on assets in excess of $1.25 billion
</TABLE>

The administrative fee paid by any Fund during any fiscal year will not be
less than $75,000 with regard to the above named Funds.

Federated Administrative Services has agreed to not enforce the applicable
minimum fee with respect to any Fund for a period of eighteen months following
the initiation of each Fund's public offering of shares. Federated
Administrative Services may limit voluntarily any portion of its fee at any
time.

CUSTODIAN, RECORDKEEPER, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT

Huntington acts as custodian and recordkeeper of the Trust's investments and
other assets. Huntington receives custody and recordkeeping fees of 5.6 basis
points (0.056%) for each Fund except the Mortgage Securities Fund, for which
Huntington receives 2.6 basis points (0.026%) for custody services only.
Federated Services Company, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, serves as the Trust's transfer agent and dividend
disbursing agent.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants for the Trust are Price Waterhouse LLP,
Columbus, Ohio.

DISTRIBUTIONS AND TAXES

MONEY MARKET FUNDS

All of the net income of both classes of shares of each Money Market Fund is
declared each Business Day as a dividend to shareholders of record at the time
of the declaration. A Money Market Fund's net income from the time of the
immediately preceding dividend declaration consists of interest accrued or
discount earned during such period (including both original issue and market
discount) on the Money Market Fund's securities, less amortization of premium
and the estimated expenses of each class of shares of the Money Market Fund.
Shares purchased prior to 10:30 a.m. (Eastern Time) begin earning dividends
that day. Shares purchased after such time begin earning dividends on the
following day. Dividends are declared daily and payable monthly.

Although none of the Money Market Funds expects to realize long-term capital
gains, any net long-term capital gains that may be realized will be paid
annually. Each Money Market Fund expects to distribute any net realized short-
term gains once each year, although it may distribute them more frequently if
necessary in order to maintain the net asset value of a Fund at $1.00 per
share.

OTHER FUNDS

Dividends, if any, from the investment income of each Fund other than the
Money Market Funds are declared and paid monthly to both classes of shares.
Distributions resulting from any net realized capital gains of any Fund will
be paid at least annually.

DISTRIBUTION OPTIONS

Shareholders of the Money Market Funds may choose to receive all
distributions in cash or to reinvest all distributions in additional Trust
Shares of a Fund. Shareholders of other Funds may choose to receive all
distributions in cash, to reinvest all distributions in additional Trust
Shares, or to reinvest all capital gains distributions in additional Trust
Shares and to receive all other distributions in cash. Shareholders may choose
a distribution option by notifying the Mutual Fund Services Center of their
selection. If a shareholder fails to choose a distribution option, all
distributions will be reinvested in additional Trust Shares of the Fund making
the distribution.

FEDERAL INCOME TAXES

Each Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet all other requirements that are necessary for
it to be relieved of federal taxes on income (and gains, if any) paid to
shareholders in the form of dividends. In order to accomplish this goal, each
Fund must, among other things, distribute substantially all of its ordinary
income (and net short-term capital gains, if any) on a current basis and
maintain a portfolio of investments which satisfies certain diversification
criteria.

All distributions by a Fund to a shareholder (with the exception of
distributions of tax-exempt income by the Ohio Funds and other than long-term
capital gains distributions, if any) will be taxable as ordinary income to the
extent of a Fund's current and accumulated "earnings and profits." However,
shareholders not subject to tax on their income generally will not be required
to pay tax on amounts distributed to them. The dividends received deduction
for corporations will apply to ordinary income distributions to the extent the
distribution represents amounts that would qualify for the dividends received
deduction to the Fund if the Fund were a regular corporation, and to the
extent designated by the Fund as so qualifying. The Money Market Funds and the
Income Funds do not expect to pay any distributions that would be eligible for
the dividends received deduction. If a Fund were to have net long-term capital
gains in excess of short-term losses in a particular year, distributions by a
Fund of those gains will be taxable to a shareholder as long-term capital
gains, regardless of how long a shareholder has held the shares. If a
shareholder disposes of shares at a loss before holding such shares for longer
than six months, such loss will be treated as a long-term capital loss to the
extent the shareholder has received a long-term capital gains dividend on the
shares.

In general, dividends paid by the Ohio Funds that are designated by the
Funds as "exempt-interest dividends" will be exempt from federal regular
income tax. However, under the Internal Revenue Code of 1986, as amended (the
"Code"), dividends paid by the Ohio Funds attributable to interest on certain
private activity bonds issued after August 7, 1986 must be included as an item
of tax preference in computing alternative minimum taxable income for the
purpose of determining liability (if any) for the 26%-28% federal alternative
minimum tax for individuals and the 20% federal alternative minimum tax for
corporations. In addition, exempt-interest dividends paid by the Ohio Funds
will be included in a corporation's "adjusted current earnings" for purposes
of the alternative minimum tax. Thus, a corporation's alternative minimum tax
base would generally be increased by 75% of interest received which is
excluded from gross income for regular federal income tax purposes (other than
dividends paid by the Ohio Funds attributable to interest on certain private
activity bonds issued after August 7, 1986, which interest would already be
included in alternative minimum taxable income as a specific item of tax
preference).

Early in each year each Fund will notify each of its shareholders of the
amount and the federal income tax status of the distributions paid or deemed
paid to the shareholders by the Fund during the preceding year.

If a shareholder receives an exempt-interest dividend with respect to a
share and holds the share for six months or less, any loss on the sale or
exchange of the share will be disallowed to the extent of the amount of such
exempt-interest dividend. The Treasury Department is authorized to issue
regulations reducing the period to not less than 31 days for regulated
investment companies that regularly distribute at least 90% of their net tax-
exempt interest. No such regulations have been issued as of the date of this
Prospectus.

Distributions will be taxable as described above whether received in cash or
in shares through the reinvestment of distributions. A dividend paid to a
shareholder by a Fund in January of a year generally is deemed to have been
received by the shareholder on December 31 of the preceding year, if the
dividend was declared and payable to shareholders of record on a date in
October, November or December of that preceding year.

Additional information regarding federal income taxes is contained in the
Statement of Additional Information. The foregoing is a general and
abbreviated summary of certain applicable provisions of the Code and Treasury
regulations currently in effect. The Code and regulations are subject to
change by legislative or administrative action. A Fund's distributions may
also be subject to state and local taxes. Shareholders should consult their
own tax adviser to determine the precise effect of an investment in a Fund on
their particular tax situation.

OHIO PERSONAL INCOME TAXES

Dividends received from the Ohio Funds that are derived from interest on
Ohio tax-exempt securities are exempt from the Ohio personal income tax.
Specific state statutes authorizing the issuance of certain Ohio tax-exempt
securities provide that the interest on and gain from the sale or other
disposition of such obligations are exempt from all taxation in the State.
Dividends on shares of an Ohio Fund which are attributable to interest on or
gain from the sale of obligations issued pursuant to such statutes should be
exempt from the Ohio personal income tax. Ohio municipalities may not impose
income taxes on dividends or any intangible property including shares of the
Ohio Funds, except that municipalities that taxed the types of intangible
income which were not exempt from municipal income taxation on or before April
1, 1986, may tax such intangible income if such a tax was approved by the
electors of the municipality in an election held on November 8, 1988. Ohio
residents should consult their own tax adviser regarding potential municipal
income tax liability in connection with their investment in an Ohio Fund. The
description in this paragraph, which is only a summary of the Ohio tax
treatment of dividends paid by the Ohio Funds, is based upon current statutes
and regulations and upon current policies of the Ohio Department of Taxation,
all of which are subject to change.

ORGANIZATION OF THE TRUST

The Trust was organized as a Massachusetts business trust on February 10,
1987. A copy of the Trust's Declaration of Trust, which is governed by
Massachusetts law, is on file with the Secretary of State of The Commonwealth
of Massachusetts.

The Trust is an open-end management investment company, whose Declaration of
Trust permits the Trust to offer separate series of shares of beneficial
interest representing interests in separate portfolios of securities. The
shares in any one portfolio may be offered in two or more separate classes. As
of the date of this Prospectus, the Trustees have established two classes of
shares, known as Trust Shares and Investment Shares, in the Money Market Fund,
the Ohio Municipal Money Market Fund, the U.S. Treasury Money Market Fund, the
Growth Fund, the Mortgage Securities Fund, the Ohio Tax-Free Fund, and the
Fixed Income Securities Fund.

Trust Shares and Investment Shares of a Fund are fully transferable. Each
class is entitled to dividends from the respective class assets of the Fund as
declared by the Trustees, and if the Trust (or the Fund) were liquidated, the
shareholders of each class would receive the net assets of the Fund
attributable to each respective class.

VOTING RIGHTS

Shareholders are entitled to one vote for each share held on the record date
for any action requiring a vote by the shareholders, and a proportionate
fractional vote for each fractional share held. Shareholders of the Trust will
vote in the aggregate and not by Fund or class except (i) as otherwise
expressly required by law or when the Trustees determine that the matter to be
voted upon affects only the interests of the shareholders of a particular Fund
or class, and (ii) only holders of Investment Shares will be entitled to vote
on matters submitted to shareholder vote with respect to the Rule 12b-1 Plan
applicable to such class.

As of April 7, 1995, Huntington Trust Company, N.A., Columbus, Ohio, acting
in various capacities for numerous accounts, was the owner of record of
approximately 219,000,000 shares (82.71%) of the Trust Shares of the Money
Market Fund; 50,994,516 shares (99.93%) of the Trust Shares of the Ohio
Municipal Money Market Fund; 309,482,741 shares (99.87%) of the Trust Shares
of the U.S. Treasury Money Market Fund; 4,109,091 shares (99.98%) of the Trust
Shares of the Growth Fund; 5,184,665 shares (99.03%) of the Trust Shares of
the Income Equity Fund; 7,059,194 shares (91.27%) of the Trust Shares of the
Mortgage Securities Fund; 2,669,747 shares (95.37%) of the Trust Shares of the
Ohio Tax-Free Fund; 6,255,795 shares (99.49%) of the Trust Shares of the Fixed
Income Securities Fund; 6,609,293 shares (99.34%) of the Trust Shares of the
Short/Intermediate Fixed Income Securities Fund, and therefore, may, for
certain purposes, be deemed to control the respective Funds and be able to
affect the outcome of certain matters presented for a vote of shareholders.

As of April 7, 1995, National Financial Services Corp., New York, New York,
was the owner of record of approximately 23,911,484 shares (46.69%) of the
Investment Shares of the Money Market Fund; Huntington Trust Company, N.A.,
Columbus, Ohio, acting in various capacities for numerous accounts, was the
owner of record of approximately 37,252,887 shares (78.37%) of the Investment
Shares of the Ohio Municipal Money Market Fund, and therefore, may, for
certain purposes, be deemed to control the respective Funds and be able to
affect the outcome of certain matters presented for a vote of shareholders.

As a Massachusetts business trust, the Trust is not required to hold annual
meetings of shareholders, but may hold special meetings from time to time.

Trustees may be removed by the Trustees or by shareholders at a meeting
called for that purpose. For information about how shareholders may call such
a meeting and communicate with other shareholders for that purpose, see the
Statement of Additional Information.

To the extent that matters arise requiring a shareholder vote in which
Huntington may have a conflict of interest, Huntington will engage in a voting
practice known as reflexive voting, whereby the votes of those shares over
which it exercises discretion will be voted in proportion to the votes cast by
the other record owners.

As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Trust or a particular
Fund or a particular class of shares of the Trust or a Fund means the
affirmative vote of the lesser of (a) more than 50% of the outstanding shares
of the Trust or such Fund or such class, or (b) 67% or more of the shares of
the Trust or such Fund or such class present at a meeting at which the holders
of more than 50% of the outstanding shares of the Trust or such Fund or such
class are represented in person or by proxy.

PERFORMANCE DATA AND COMPARISONS

Yield and total return data for both classes of shares may, from time to
time, be included in advertisements about the Funds.

Each of the Money Market Funds may show its yield and effective yield for
both classes of shares. A Money Market Fund's yield represents an
annualization of the change in value of a shareholder account excluding any
capital changes in the Fund for a specific seven-day period. Effective yield
compounds the Fund's yield for a year and is, for that reason, greater than
the Fund's yield.

Yield for both classes of shares of each of the other Funds is calculated by
dividing the Fund's annualized net investment income per share during a recent
30-day period by the maximum public offering price per share on the last day
of that period. With respect to the Ohio Funds, the tax-equivalent yield of
each class of shares shows the effect on performance of the tax-exempt status
of distributions received from a Fund. Tax-equivalent yield reflects the
approximate yield that a taxable investment must earn for shareholders at
stated income levels to produce an after-tax yield equivalent to a Fund's tax-
exempt yield. Total return for the one-year period and for the life of a Fund
through the most recent calendar quarter represents the average annual
compounded rate of return on a $1,000 investment in each class of the Fund.
Total return may also be presented for other periods.

Yield, effective yield, tax-equivalent yield, and total return will be
calculated separately for Trust Shares and Investment Shares. Because
Investment Shares are subject to 12b-1 fees, the yield, effective yield, tax-
equivalent yield, and total return for Investment Shares will be lower than
that of Trust Shares for the same period. In addition, the sales load
applicable to Investment Shares of the Growth Fund, Mortgage Securities Fund,
Ohio Tax-Free Fund and Fixed Income Securities Fund also contributes to a
lower total return for such Funds' Investment Shares. The total return figures
quoted in advertisements will normally reflect the effect of the maximum sales
load. However, from time to time, these advertisements may include total
returns which do not reflect the effect of an applicable sales load.

All data is based on a Fund's past investment results and is not intended to
indicate future performance. Investment performance for both classes is based
on many factors, including market conditions, the composition of a Fund's
portfolio, and the operating expenses of a Fund or a particular class.
Investment performance also often reflects the risks associated with the
Fund's investment objective and policies. These factors should be considered
when comparing a Fund's investment results to those of other mutual funds and
other investment vehicles.

From time to time, advertisements for a Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare a
Fund's performance to certain indices.

SHAREHOLDER INQUIRIES

Shareholder inquiries regarding the Funds should be directed to The
Huntington Trust Company N.A., Huntington Center, 41 South High Street,
Columbus, Ohio 43287, Attn: Mutual Fund Services Center.

OTHER CLASSES OF SHARES

Certain of the Funds also offer another class of shares called Investment
Shares. Investment Shares are sold primarily through The Huntington Investment
Company, Huntington Personal Bankers or the Mutual Fund Services Center
pursuant to respective agreements between The Huntington
Investment Company or The Huntington Trust Company, N.A. and the Distributor.
Investment Shares are sold at net asset value plus, in the case of the Growth
Fund, the Mortgage Securities Fund, the Ohio Tax-Free Fund and the Fixed
Income Securities Fund, an applicable sales charge. Purchases of Investment
Shares are subject to a minimum initial investment of $1,000.

Trust Shares and Investment Shares of any Fund are subject to certain of the
same expenses; however, Investment Shares are distributed under a Rule 12b-1
Plan pursuant to which the Distributor is paid a fee based upon a percentage
of the average daily net assets attributable to a Fund's Investment Shares.
Expense differences between a Fund's Trust Shares and Investment Shares may
affect the performance of each class.

Investors may obtain information about Investment Shares by contacting The
Huntington Investment Company, Huntington Personal Bankers or the Mutual Fund
Services Center.

PENDING LEGAL PROCEEDINGS RELATING TO PIPER

Complaints have been filed in U.S. District Court against Piper, relating to
several other investment companies for which Piper acts as investment adviser
or subadviser. These lawsuits do not involve the Mortgage Securities Fund and
Piper does not believe that the lawsuits will have a material adverse effect
upon their ability to perform under their agreement with The Huntington Trust
Company, N.A. An agreement in principle has been reached to settle one such
lawsuit. Piper intends to defend the other lawsuits vigorously. See "Pending
Litigation Relating to Piper" in the Statement of Additional Information.

APPENDIX I

Rule 2a-7, as amended, defines the terms NRSRO, Eligible Securities, Unrated
Securities, First Tier Securities and Second Tier Securities in establishing
risk limiting conditions for money market mutual funds.

A summary of those definitions follows.

NRSRO is any nationally recognized statistical rating organization as that
term is used in the Securities Exchange Act of 1934, that is not an affiliated
person of the issuer, guarantor or provider of credit support for the
instrument. (While the Appendix to the Statement of Additional Information
identifies each NRSRO, examples include Standard & Poor's Corporation
("Standard & Poor's"), Moody's Investors Service, Inc. ("Moody's") and Fitch
Investors Service, Inc.)

ELIGIBLE SECURITIES are defined as those with a remaining maturity of 397
days or less and which (i) have a short-term rating in one of the two highest
rating categories by an NRSRO (e.g. A-1/P-1 or A-2/P-2 by Standard & Poor's
and Moody's, respectively), (ii) securities that are comparable in priority
and security to other short-term debt of the issuer having a short-term rating
in one of the two highest rating categories or (iii) Unrated Securities that
are of comparable quality. A long-term security without a short-term rating
but with a long-term rating below the two highest rating categories (i.e. a
rating of A or below) is not an Eligible Security.

UNRATED SECURITIES include (i) securities that do not have a current short-
term rating and that are not comparable in priority or security to another
class of the issuer's securities having a short-term rating and (ii)
securities that do have a rating, but are subject to an external credit
support agreement that was not in effect when the rating was assigned.

FIRST TIER SECURITY means any Eligible Security which has, or is comparable
to short-term debt of the issuer having, the highest short-term rating by any
two NRSROs that have issued a rating with respect to a security or class of
debt obligations of an issuer. If only one NRSRO has issued a rating with
respect to such security it must be the highest short-term rating given by
such NRSRO.

SECOND TIER SECURITY means any Eligible Security that is not a First Tier
Security.

<PAGE>
[This Page Intentionally Left Blank]

INVESTMENT ADVISER
- -------------------------------------
The Huntington Trust Company, N.A.
Huntington Center
Columbus, OH 43287
1-800-253-0412

ADMINISTRATOR
- -------------------------------------
Federated Administrative Services
Federated Investors Tower
Pittsburgh, PA 15222-3779

DISTRIBUTOR
- -------------------------------------
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, PA 15222-3779

No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the
offering made by this Prospectus and, if given or made, such information or
representations may not be relied upon as having been authorized by a Fund or
the Distributor. This Prospectus does not constitute an offering by a Fund or
by the Distributor in any jurisdiction in which such offering may not lawfully
be made.

609409107 609409776
609409305 609409404
609409503 609409800
609409602 609409883
609409701 1032204A-I (4/95)

[LOGO] RECYCLED PAPER

[LOGO]
THE MONITOR FUNDS

Trust Shares

MONEY MARKET FUNDS
- -----------------------------
The Monitor Money Market Fund
The Monitor Ohio Municipal Money Market Fund
The Monitor U.S. Treasury Money Market Fund

EQUITY FUNDS
- -----------------------------
The Monitor Growth Fund
The Monitor Income Equity Fund

INCOME FUNDS
- -----------------------------
The Monitor Mortgage Securities Fund
The Monitor Ohio Tax-Free Fund
The Monitor Fixed Income Securities Fund
The Monitor Short/Intermediate
Fixed Income Securities Fund

April 30, 1995

[LOGO]

PROSPECTUS

April 30, 1995

The Monitor Funds, a Massachusetts business trust (the "Trust"), consists of
separate series (the "Funds") which have different investment objectives and
policies. All seven of the Funds noted below offer two classes of shares.
Investment Shares in each of the Funds may be purchased through The Huntington
Investment Company, Huntington Personal Bankers or the Mutual Fund Services
Center pursuant to respective agreements between The Huntington Investment
Company or The Huntington Trust Company, N.A. and Federated Securities Corp.
(the "Distributor"), the Trust's distributor. The different Funds for which
Investment Shares are available through this Prospectus include:
MONEY MARKET FUNDS--INVESTMENT SHARES
The Monitor Money Market Fund
The Monitor Ohio Municipal Money Market Fund
The Monitor U.S. Treasury Money Market Fund
EQUITY FUND--INVESTMENT SHARES
The Monitor Growth Fund
INCOME FUNDS--INVESTMENT SHARES
The Monitor Mortgage Securities Fund
The Monitor Ohio Tax-Free Fund
The Monitor Fixed Income Securities Fund
These Funds also offer a second class of shares, known as Trust Shares. (A
Fund's Investment and Trust Shares may be hereinafter referred to collectively
as "shares.")
This Prospectus relates only to Investment Shares of the Funds listed above.
This Prospectus sets forth concisely what a shareholder should know before
investing in Investment Shares of any of the Funds and should be read
carefully and retained for future reference. The Combined Statement of
Additional Information for Investment Shares and Trust Shares has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference. FOR A FREE COPY OF THE COMBINED STATEMENT OF
ADDITIONAL INFORMATION CALL THE MUTUAL FUND SERVICES CENTER AT: (IN OHIO) 614-
463-5580 OR (OUTSIDE THE 614 AREA CODE) 800-253-0412.
THE HUNTINGTON TRUST COMPANY, N.A.
Investment Adviser
FEDERATED ADMINISTRATIVE SERVICES
Administrator
FEDERATED SECURITIES CORP.
Distributor
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INVESTMENT COMPANY SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY, THE HUNTINGTON TRUST COMPANY,
N.A., NOR ARE THEY INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN
INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT
OR ANY AGENCY SPONSORED BY THE FEDERAL GOVERNMENT OR ANY STATE. INVESTMENT IN
THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. EACH MONEY MARKET FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT A FUND WILL BE ABLE
TO DO SO.

TABLE OF CONTENTS
PAGE

SYNOPSIS...................................................................... 1
FEE TABLE AND EXAMPLE.................................................... 3
SUPPLEMENTARY INFORMATION-- FINANCIAL HIGHLIGHTS............................. 4
THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES................................10
MONEY MARKET FUNDS............................................................10
Money Market Fund............................................................10
Ohio Municipal Money Market Fund.............................................11
U.S. Treasury Money Market Fund..............................................13
EQUITY FUND...................................................................13
Growth Fund..................................................................13
INCOME FUNDS..................................................................14
Mortgage Securities Fund.....................................................14
Ohio Tax-Free Fund...........................................................19
Fixed Income Securities Fund.................................................19
ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES................20
Ohio Tax-Exempt Securities...................................................20
Non-Diversification..........................................................20
Defensive Investment Strategies..............................................21
Options and Futures Contracts................................................21
Foreign Investments..........................................................22
Repurchase Agreements........................................................23
When-Issued and Delayed Delivery Transactions................................23
Lending of Portfolio Securities..............................................24
INVESTMENT RESTRICTIONS.......................................................24
HOW THE FUNDS VALUE THEIR SHARES..............................................25
HOW TO BUY INVESTMENT SHARES..................................................25
To Place an Order............................................................26
Minimum Investment Required..................................................26
What Shares Cost.............................................................27
Money Market Funds..........................................................27
Equity Fund.................................................................27
Income Funds................................................................27
Purchases At Net Asset Value................................................27
Dealer Concession...........................................................27
Reducing the Sales Charge...................................................28
Quantity Discounts and Accumulated Purchases................................28
PAGE

Letter of Intent............................................................28
Reinstatement Privilege.....................................................29
Concurrent Purchases........................................................29
Systematic Investment Program................................................29
HOW TO EXCHANGE INVESTMENT SHARES AMONG THE FUNDS.............................29
By Telephone.................................................................30
By Mail......................................................................31
HOW TO REDEEM INVESTMENT SHARES...............................................31
Redeeming by Telephone.......................................................31
Redeeming by Mail............................................................32
Redeeming by Check...........................................................32
Redeeming by Fax.............................................................32
SYSTEMATIC WITHDRAWAL PROGRAM.................................................33
ACCOUNTS WITH LOW BALANCES....................................................33
MANAGEMENT OF THE TRUST.......................................................33
Adviser's Background........................................................33
Sub-Adviser.................................................................34
Sub-Adviser's Background....................................................34
Distribution of Investment Shares............................................35
Distribution Plans...........................................................35
Shareholder Servicing Arrangements..........................................37
Administration of the Funds..................................................37
Custodian, Recordkeeper, Transfer Agent, and Dividend Disbursing Agent.......37
Independent Public Accountants...............................................37

DISTRIBUTIONS AND TAXES.......................................................38
Money Market Funds...........................................................38
Other Funds..................................................................38
Distribution Options.........................................................38
Federal Income Taxes.........................................................38
Ohio Personal Income Taxes...................................................39
ORGANIZATION OF THE TRUST.....................................................40
Voting Rights................................................................40
PERFORMANCE DATA AND COMPARISONS..............................................41
SHAREHOLDER INQUIRIES.........................................................42
OTHER CLASSES OF SHARES.......................................................42

PENDING LEGAL PROCEEDINGS RELATING TO PIPER .............................42

APPENDIX I....................................................................43

SYNOPSIS

The Trust, a management investment company, was established as Massachusetts
business trust under a Declaration of Trust dated February 10, 1987. The
Declaration of Trust permits the Trust to offer separate series of shares of
beneficial interest representing interests in separate portfolios of
securities. The shares in any one Fund may be offered in separate classes. As
of the date of this Prospectus, the Board of Trustees has established two
classes of shares, known as Trust Shares and Investment Shares, in the Money
Market Fund, the Ohio Municipal Money Market Fund, the U.S. Treasury Money
Market Fund, the Growth Fund, the Mortgage Securities Fund, the Ohio Tax-Free
Fund, and the Fixed Income Securities Fund. All of the portfolios of the
Trust, with the exception of the Ohio Municipal Money Market Fund and the Ohio
Tax-Free Fund, are diversified. This Prospectus relates solely to the
Investment Shares of each Fund as set forth below.

As of the date of this Prospectus, the Funds offered in the Investment Share
class by this Prospectus are as follows:

MONEY MARKET FUNDS--INVESTMENT SHARES
MONEY MARKET FUND--seeks to maximize current income while preserving
capital and maintaining liquidity by investing in a portfolio of high
quality money market instruments;
OHIO MUNICIPAL MONEY MARKET FUND--seeks to provide income exempt from
both federal regular income tax and Ohio personal income taxes while
preserving capital and maintaining liquidity by investing in Ohio tax-
exempt securities;
U.S. TREASURY MONEY MARKET FUND--seeks to maximize current income while
preserving capital and maintaining liquidity by investing exclusively
in obligations issued by the U.S. Government and backed by its full
faith and credit, and in repurchase agreements with respect to such
obligations;
EQUITY FUND--INVESTMENT SHARES
GROWTH FUND--seeks to achieve long-term capital appreciation by
investing primarily in equity securities;
INCOME FUNDS--INVESTMENT SHARES
MORTGAGE SECURITIES FUND--seeks to achieve current income by investing
in mortgage securities and in U.S. Government securities;
OHIO TAX-FREE FUND--seeks to provide current income exempt from federal
income taxes and Ohio personal income taxes by investing in Ohio tax-
exempt securities; and
FIXED INCOME SECURITIES FUND--seeks to achieve high current income by
investing in fixed income securities where the average maturity of the
Fund will not exceed 10 years.

For information on how to purchase Investment Shares of any of the Funds,
please refer to "How to Buy Investment Shares." A minimum initial investment
of $1,000 is required for each Fund. Subsequent investments in a Fund must be
in amounts of at least $50. Investment Shares of each Fund are sold at net
asset value plus a sales charge where applicable. Shares of each Fund are
redeemed at net asset value. Information on redeeming shares may be found
under "How to Redeem Investment Shares." The Funds are advised by The
Huntington Trust Company, N.A. In addition, Piper Capital Management, Inc.
("Piper") serves as sub-adviser to the Mortgage Securities Fund.

FEE TABLE AND EXAMPLE
The following Fee Table and Example summarize the various costs and expenses
that a shareholder of Investment Shares will bear, either directly or
indirectly.

SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
MORTGAGE OHIO TAX-FREE FIXED INCOME
GROWTH FUND SECURITIES FUND FUND SECURITIES FUND
----------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Maximum Sales Load Im-
posed on Purchases
(as a percentage of
offering price)....... 4.00% 2.00% 2.00% 2.00%
</TABLE>

ANNUAL INVESTMENT SHARES OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)
<TABLE>
<CAPTION>
TOTAL
INVESTMENT
SHARES
OPERATING
NET EXPENSES NET OF
MANAGEMENT 12B-1 OTHER ANY WAIVERS OR
FEES (1) FEES (2) EXPENSES (3) REIMBURSEMENTS
---------- -------- ------------ ---------------
<S> <C> <C> <C> <C>
Money Market Fund............. 0.30% 0.10% 0.21% 0.61%
Ohio Municipal Money Market
Fund (4)* ................... 0.15% 0.10% 0.30% 0.55%
U.S. Treasury Money Market
Fund (4)..................... 0.20% 0.10% 0.22% 0.52%
Growth Fund................... 0.60% 0.25% 0.28% 1.13%
Mortgage Securities Fund (5)*. 0.00% 0.25% 0.52% 0.77%
Ohio Tax-Free Fund............ 0.50% 0.25% 0.27% 1.02%
Fixed Income Securities Fund.. 0.50% 0.25% 0.25% 1.00%
</TABLE>
- --------
(1) Fees paid by each Fund for investment advisory services. See "Management of
the Trust."

(2) Fees paid by Investment Shares of each Fund for distribution and/or
administrative services provided with respect to Investment Shares. Total
payments of up to 0.10 of 1% for the Money Market Fund and Ohio Municipal
Money Market Fund, up to 0.25 of 1% for the U.S. Treasury Money Market
Fund, Growth Fund, Ohio Tax-Free Fund and Fixed Income Securities Fund and
up to 0.50 of 1% for the Mortgage Securities Fund of the average daily net
assets attributable to Investment Shares are permitted under the
Distribution Plans. See "Management of the Trust--Distribution Plans."

(3) Includes administration fees. See "Management of the Trust--Administration
of the Funds."

(4) The Total Investment Shares Operating Expenses for the Ohio Municipal
Money Market Fund would have been 0.70%, absent the voluntary waiver of
management fees. The maximum management fee for Ohio Municipal Money
Market Fund is 0.30%. The Total Investment Shares Operating Expenses for
the U.S. Treasury Money Market Fund would have been 0.67%, absent the
voluntary waiver by the distributor.

5) The Total Investment Shares Operating Expenses for the Mortgage Securities
Fund in the table above are based on net expenses expected during the
fiscal year ending December 31, 1995. Absent the voluntary waiver of
management, administrative, custody and distribution fees, the anticipated
gross expenses are 1.60%. The maximum management, administrative and
custody fees are 0.50%, 0.06% and 0.026%, respectively. The Total
Investment Shares Operating Expenses were 1.13% for the fiscal year ended
December 31, 1994 and were 1.46% absent the voluntary waivers of the
management, administrative and distribution fees and the voluntary
reimbursement of certain other operating expenses.

* The adviser, administrator and/or custodian can terminate these voluntary
waivers at any time at their sole discretion.

EXAMPLE:

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period, and (3)
payment of maximum sales load:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Fund............................... $ 6 $20 $ 34 $ 76
Ohio Municipal Money Market Fund................ $ 6 $18 $ 31 $ 69
U.S. Treasury Money Market Fund................. $ 5 $17 $ 29 $ 65
Growth Fund..................................... $51 $74 $100 $172
Mortgage Securities Fund........................ $28 $44 $ 62 $114
Ohio Tax-Free Fund.............................. $30 $52 $ 75 $142
Fixed Income Securities Fund.................... $30 $51 $ 74 $140
</TABLE>

The purpose of the foregoing Example is to assist an investor in
understanding the various costs and expenses that a shareholder of Investment
Shares will bear directly or indirectly. The Example should not be considered
a representation of past or future expenses. Actual expenses may be greater or
less than those shown.

Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.

FINANCIAL HIGHLIGHTS--MONEY MARKET FUNDS (FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD)

* Reflects operations for the period from May 1, 1991 (effective date of
Investment Shares) to December 31, 1991.

** Reflects operations for the period from October 19, 1993 (date of initial
public investment) to December 31, 1993.

+ Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a) Computed on an annualized basis.

(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

<TABLE>
<CAPTION>
NET NET ASSETS,
INVESTMENT EXPENSE WAIVER/ END OF PERIOD
INCOME REIMBURSEMENT(B) (000 OMITTED)
- ---------------------------------------------------
<S> <C> <C>
5.08%(a) -- $17,936
3.26% -- $19,962
2.60% 0.02% $21,583
3.85% 0.02% $41,629
3.69%(a) 0.02%(a) $425
2.35% 0.14% $2,452
1.88% 0.20% $20,312
2.30% 0.19% $37,134
2.65%(a) 0.16%(a) $948
3.66% 0.17% $20,390
</TABLE>
- --------------------------------------------------

FINANCIAL HIGHLIGHTS--EQUITY FUNDS (FOR A SHARE OUTSTANDING THROUGHOUT EACH
PERIOD)

*Reflects operations for the period from May 1, 1991 (effective date of
Investment Shares) to December 31, 1991.

+ Distributions in excess of net investment income were the result of
certain book and timing differences. These distributions do not represent
a return of capital for federal income tax purposes.

++Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a)Computed on an annualized basis.

(b)This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about the Funds' performance is contained in the Funds'
Annual Report dated February 28, 1995, which can be obtained free of charge.

FINANCIAL HIGHLIGHTS--INCOME FUNDS

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following information has been audited by the Trust's independent
accountants, Price Waterhouse LLP. Their report on the Trust's financial
statements and financial highlights for the year ended December 31, 1994 is
included in the Annual Report to Shareholders which is incorporated by
reference into the Statement of Additional Information.
<TABLE>
<CAPTION>
DISTRIBUTIONS TO
DIVIDENDS TO SHAREHOLDERS DISTRIBUTIONS
NET ASSET NET REALIZED SHAREHOLDERS FROM NET IN EXCESS
VALUE, NET AND UNREALIZED TOTAL FROM FROM NET REALIZED GAIN OF NET
YEAR ENDED BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT ON INVESTMENT INVESTMENT
DECEMBER 31, OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME TRANSACTIONS INCOME+
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT SHARES
OHIO TAX-FREE
1991* $20.56 0.67 0.51 1.18 (0.69) -- --
1992 $21.05 0.93 0.26 1.19 (0.93) -- --
1993 $21.31 0.90 0.73 1.63 (0.90) -- --
1994 $22.04 0.94 (1.56) (0.62) (0.92) -- --
<CAPTION>
FIXED INCOME SECURITIES
<S> <C> <C> <C> <C> <C> <C> <C>
1991* $20.17 0.91 1.47 2.38 (0.87) (0.10) --
1992 $21.58 1.33 (0.04) 1.29 (1.37) (0.12) (0.06)
1993 $21.32 1.19 0.92 2.11 (1.33) (0.06) --
1994 $22.04 1.23 (2.29) (1.06) (1.28) -- --
<CAPTION>
MORTGAGE SECURITIES
<S> <C> <C> <C> <C> <C> <C> <C>
1992**(c) $10.00 0.62 0.28 0.90 (0.60) (0.03) --
1993(c) $10.27 1.47 (0.27) 1.20 (1.43) (0.10) --
1994(c) $ 9.94 0.87 (3.19) (2.32) (0.91) -- (0.01)
- --------------------------------------------------------------------------------------------------------
</TABLE>

* Reflects operations for the period from May 1, 1991 (effective date of
Investment Shares) to December 31, 1991.

** Reflects operations for the period from June 2, 1992 (date of initial
public investment) to December 31, 1992.

+ Distributions in excess of net investment income were the result of certain
book and timing differences. These distributions do not represent a return
of capital for federal income tax purposes.

++ Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a) Computed on an annualized basis.

(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

(c) Per share information presented is based upon the monthly number of shares
outstanding due to large fluctuations in the number of shares outstanding
during the period.

Further information about the Funds' performance is contained in the Funds'
Annual Report dated February 28, 1995, which can be obtained free of charge.

THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of the various Funds are described
below. There can, of course, be no guarantee that a Fund will achieve its
investment objective.

MONEY MARKET FUNDS

. Each Fund (except the Ohio Municipal Money Market Fund) must limit
investments in "Second Tier Securities" to 5% of total assets and 1% of
total assets in the securities of a single Second Tier issuer.

MONEY MARKET FUND

(a) obligations, such as notes, bills or bonds, issued by or guaranteed as
to principal and interest by the U.S. Government or its agencies or
instrumentalities;

(b) commercial paper, including U.S. dollar denominated eurodollar
commercial paper, considered under the Rule to be rated in the highest
category by an NRSRO(s) or, if not rated, of comparable quality as
determined by Huntington pursuant to guidelines established by the
Trustees;

(c) negotiable certificates of deposit and bankers' acceptances issued by
domestic banks and U.S. branches of foreign banks which are subject to
the same regulation as U.S. banks and which, at the time of purchase,
have capital, surplus, and undivided profits in excess of $100,000,000
(as of the bank's most recently published financial statements);

(d) corporate debt obligations, including bonds, notes and debentures
considered under the Rule to be rated in the two highest categories by
an NRSRO(s) or, if not rated, of comparable quality as determined by
Huntington pursuant to guidelines established by the Trustees; and

(e) repurchase agreements and master demand notes.

RESTRICTED AND ILLIQUID SECURITIES. The Fund intends to invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies but which
are subject to restriction on resale under federal securities law. However,
the Fund will limit investments in illiquid securities, including certain
restricted securities not determined by the Trustees to be liquid, non-
negotiable time deposits, and repurchase agreements providing for settlement
in more than seven days after notice, to 10% of its net assets.

The Fund may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law, and is generally sold to institutional investors, such as the
Fund, who agree that they are purchasing the paper for investment purposes and
not with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) commercial paper is normally resold to
other institutional investors like the Fund through or with the assistance of
the issuer or investment dealers who make a market in Section 4(2) commercial
paper, thus providing liquidity. The Fund believes that Section 4(2)
commercial paper and possibly certain other restricted securities which meet
the criteria for liquidity established by the Trustees are quite liquid. The
Fund intends, therefore, to treat the restricted securities which meet the
criteria for liquidity established by the Trustees, including Section 4(2)
commercial paper, as determined by Huntington, as liquid and not subject to
the investment limitation applicable to illiquid securities. In addition,
because Section 4(2) commercial paper is liquid, the Fund intends to not
subject such paper to the limitation applicable to restricted securities.

OHIO MUNICIPAL MONEY MARKET FUND

The objective of the Ohio Municipal Money Market Fund is to provide income
exempt from both federal regular income tax and Ohio personal income taxes
while preserving capital and maintaining liquidity. As a fundamental policy,
the Fund invests its assets so that at least 80% of its annual interest income
is exempt from federal regular income tax. The Fund invests primarily in Ohio
tax-exempt securities which, under normal market conditions, will comprise at
least 65% of the Fund's assets. Ohio tax-exempt securities are debt
obligations issued by or on behalf of the State of Ohio, its political
subdivisions, or agencies, or financing authorities of any of these, the
income from which is, in the opinion of qualified legal counsel, exempt from
both federal regular income tax and the personal income taxes imposed by the
State of Ohio. Examples of tax-exempt securities include, but are not limited
to:

. tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;

. bond anticipation notes ("BANs") that are intended to be refinanced through
a later issuance of longer-term bonds;

. municipal commercial paper and other short-term notes;

. variable rate demand notes;

. municipal bonds (including bonds having serial maturities and pre-refunded
bonds); and

. participation, trust and partnership interests in any of the foregoing
obligations.

VARIABLE RATE DEMAND OBLIGATIONS. Variable rate demand obligations are long-
term tax-exempt securities that have variable or floating interest rates and
provide the Fund with the right to tender the security for repurchase at its
stated principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at par.
The interest rate may float or be adjusted at regular intervals (ranging from
daily to annually), and is normally established by the remarketing agent of
the respective securities. Most variable rate demand obligations allow the
Fund to demand the repurchase of the security on not more than seven days
prior notice. Other obligations only permit the Fund to tender the security at
the time of each interest rate adjustment or at other fixed intervals. See
"Demand Features." The Fund treats variable rate demand obligations as
maturing on the later of the date of the next interest adjustment or the date
on which the Fund may next tender the security for redemption.

PARTICIPATION INTERESTS. The Fund may purchase interests in tax-exempt
securities from financial institutions such as commercial and investment
banks, savings and loan associations and insurance companies. These interests
may take the form of participations, beneficial interests in a trust,
partnership interests or any other form of indirect ownership that allows the
Fund to treat the income from the investment as exempt from federal income
tax. The Fund invests in these participation interests in order to obtain
credit enhancement or demand features that would not be available through
direct ownership of the underlying tax-exempt securities.

CREDIT ENHANCEMENT. Certain of the portfolio investments of the Fund may
have been credit enhanced by a guaranty, letter of credit or insurance. The
Fund typically evaluates the credit quality and ratings of credit enhanced
securities based upon the financial condition and ratings of the party
providing the credit enhancement (the "credit enhancer"), rather than the
issuer. However, credit enhanced securities will not be treated as having been
issued by the credit enhancer for diversification purposes, unless the Fund
has invested more than 10% of its assets in securities issued, guaranteed or
otherwise credit enhanced by the credit enhancer, in which case the securities
will be treated as having been issued both by the issuer and the credit
enhancer. The bankruptcy, receivership or default of the credit enhancer will
adversely affect the quality and marketability of the underlying security.

The Fund may have more than 25% of its total assets invested in securities
credit enhanced by banks.

DEMAND FEATURES. The Fund may acquire securities that are subject to puts
and standby commitments ("demand features") to purchase the securities at
their principal amount (usually with accrued interest) within a fixed period
(usually seven days) following a demand by the Fund. The demand feature may be
issued by the issuer of the underlying securities, a dealer in the securities
or by another third party, and may not be transferred separately from the
underlying security. The Fund
uses these arrangements to provide the Fund with liquidity and not to protect
against changes in the market value of the underlying securities. The
bankruptcy, receivership or default by the issuer of the demand feature, or a
default on the underlying security or other event that terminates the demand
feature before its exercise, will adversely affect the liquidity of the
underlying security. Demand features that are exercisable even after a payment
default on the underlying security may be treated as a form of credit
enhancement.

TEMPORARY INVESTMENTS. The Fund invests its assets so that at least 80% of
its annual interest income is exempt from federal regular income taxes and at
least 65% of its assets are invested in securities the income from which is
exempt from Ohio personal income taxes. However, from time to time, when
Huntington determines that market conditions call for a temporary defensive
posture, the Fund may invest in temporary investments with remaining
maturities of 13 months or less at the time of purchase by the Fund, or hold
Fund assets in cash. Interest income from temporary investments may be taxable
to shareholders as ordinary income. These temporary investments include:
obligations issued by or on behalf of municipal or corporate issuers having
the same quality characteristics as Ohio tax-exempt securities purchased by
the Fund; marketable obligations issued or guaranteed by the U.S. Government,
its agencies, or instrumentalities; instruments issued by a U.S. branch of a
domestic bank or other depository institutions having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment;
repurchase agreements (arrangements in which the organization selling the Fund
a temporary investment agrees at the time of sale to repurchase it at a
mutually agreed upon time and price); and commercial paper rated in one of the
two highest short-term rating categories by an NRSRO(s).

Although the Fund is permitted to make taxable, temporary investments that
may have Ohio state tax implications, there is no current intention of
generating income subject to federal regular or Ohio personal income taxes.

U.S. TREASURY MONEY MARKET FUND
The objective of the U.S. Treasury Money Market Fund is to maximize current
income while preserving capital and maintaining liquidity by investing
exclusively in obligations issued by the U.S. Government and backed by its
full faith and credit and in repurchase agreements with respect to such
obligations. At least 65% of the Fund's total assets will be invested in
Treasury bills, notes and bonds which are direct obligations of the U.S.
Treasury, and repurchase agreements with respect to such obligations.

EQUITY FUND

GROWTH FUND

The objective of the Growth Fund is to achieve long-term capital
appreciation primarily through investments in equity securities. Current
income will be only an incidental consideration in the selection of
investments. Equity securities in which the Fund may invest include common
stocks, preferred stocks, securities convertible into or exchangeable for
common stocks, and other securities which Huntington believes have common
stock characteristics, such as rights and warrants. The Fund may invest in
foreign securities and, subject to its investment restrictions, securities
restricted as to resale under federal securities laws. The Fund's common stock
selection emphasizes those companies which Huntington believes have
characteristics such as above average earnings and dividend growth, superior
balance sheets, and potential for capital gains, but the Fund's investment
policy recognizes
that securities of other companies may be attractive for capital appreciation
purposes by virtue of special developments or depression in price believed to
be temporary. The Fund will be primarily invested in large capitalization
growth companies but will also include representation in medium-sized
companies with similar financial and growth characteristics. In managing the
investments of the Fund, Huntington seeks to purchase equity securities whose
potential for capital gains is balanced by an ability to better withstand
overall downward market movements. As a matter of fundamental policy, under
normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities described in this paragraph. The Fund may
also, under normal market conditions, invest a portion of its assets in cash
equivalents, including repurchase agreements and the shares of money market
mutual funds, for liquidity purposes.

INCOME FUNDS

MORTGAGE SECURITIES FUND

The Fund may invest up to 35% of the value of its total assets in:

(i) non-mortgage related securities issued or guaranteed by the U.S.
Government, its agencies, or instrumentalities;

The Fund will maintain a dollar-weighted average portfolio maturity of more
than three years but no more than ten years. A mortgage-related security will
be deemed to have an average maturity equal to its average life as determined
by the portfolio manager based upon the prepayment experience of the
underlying mortgage pools. In order to maintain a dollar-weighted average
portfolio maturity, Huntington will monitor the prepayment experience of the
underlying mortgage pools of the mortgage-
related securities and will purchase and sell securities in the portfolio to
shorten or lengthen the average maturity of the portfolio, as appropriate.

ADJUSTABLE RATE MORTGAGE SECURITIES. The Fund may also invest in adjustable
rate mortgage securities ("ARMS"). ARMS are pass-through mortgage securities
collateralized by mortgages with interest rates that are adjusted from time to
time. The adjustments usually are determined in accordance with a
predetermined interest rate index and may be subject to certain limits. While
the values of ARMS, like other debt securities, generally vary inversely with
changes in market interest rates (increasing in value during periods of
declining interest rates and decreasing in value during periods of increasing
interest rates), the values of ARMS should generally be more resistant to
price swings than other debt securities because the interest rates of ARMS
move with market interest rates. The adjustable rate feature of ARMS will not,
however, eliminate fluctuations in the prices of ARMS, particularly during
periods of extreme fluctuations in interest rates. Also, since many adjustable
rate mortgages only reset on an annual basis, it can be expected that the
prices of ARMS will fluctuate to the extent that changes in prevailing
interest rates are not immediately reflected in the interest rates payable on
the underlying adjustable rate mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS. The Fund may invest in CMOs
(collateralized mortgage obligations and multi-class pass-through securities
unless the context otherwise indicates), which are
derivative mortgage securities. Collateralized mortgage obligations are debt
instruments issued by special purpose entities which are secured by pools of
mortgage loans or other mortgage-related securities. Multi-class pass-through
securities are equity interests in a trust composed of mortgage loans or other
mortgage-related securities. Payments of principal and interest on underlying
collateral provide the funds to pay debt service on the collateralized
mortgage obligation or make scheduled distributions on the multi-class pass-
through security. The Fund will invest only in CMOs which are rated AAA by an
NRSRO.

The Fund may invest in any CMO tranche, including "inverse floaters" and "Z
tranches." An inverse floater is a CMO tranche with a coupon rate that moves
inversely to a designated index, such as LIBOR (London Inter-Bank Offered
Rate) or COFI (Cost of Funds Index). Like most other fixed-income securities,
the value of inverse floaters will decrease as interest rates increase.
Inverse floaters, however, exhibit greater price volatility than the majority
of mortgage pass-through securities or CMOs. Coupon rates on inverse floaters
typically change at a multiple of the changes in the relevant index rate.
Thus, any rise in the index rate (as a consequence of an increase in interest
rates) causes a correspondingly greater drop in the coupon rate of an inverse
floater while any drop in the index rate causes a correspondingly greater
increase in the coupon of an inverse floater. Some inverse floaters also
exhibit extreme sensitivity to changes in prepayments. Inverse floaters would
be purchased by the Fund to attempt to protect against a reduction in the
income earned on the Fund's investments due to a decline in interest rates.

Z tranches of CMOs defer interest and principal payments until one or more
other classes of the CMO have been paid in full. Interest accretes on the Z
tranche, being added to principal, and is compounded through the accretion
period. After the other classes have been paid in full, interest payments
begin and continue through maturity. Z tranches have characteristics similar
to zero coupon bonds. Like a zero coupon bond, during its accretion period a Z
tranche has the advantage of
eliminating the risk of reinvesting interest payments at lower rates during a
period of declining market interest rates. At the same time, however, and also
like a zero coupon bond, the market value of a Z tranche can be expected to
fluctuate more widely with changes in market interest rates than would the
market value of a tranche which pays interest currently. In addition, changes
in prepayment rates on the underlying mortgage loans will affect the accretion
period of a Z tranche, and therefore also will influence its market value.

STRIPPED MORTGAGE-BACKED SECURITIES. Some of the mortage-related securities
purchased by the Fund may represent an interest solely in the principal
repayments or solely in the interest payments on mortgage-backed securities
(stripped mortgage-backed securities or "SMBSs"). SMBSs are derivative multi-
class securities. SMBSs are usually structured with two classes and receive
different proportions of the interest and principal distributions on the pool
of underlying mortgage-backed securities. Due to the possibility of
prepayments on the underlying mortgages, SMBSs may be more interest-rate
sensitive than other securities purchased by the Fund. If prevailing interest
rates fall below the level at which SMBSs were issued, there may be
substantial prepayments on the underlying mortgages, leading to the relatively
early prepayments of principal-only SMBSs (the principal-only or "PO" class)
and a reduction in the amount of payments made to holders of interest-only
SMBSs (the interest-only or "IO" class). Therefore, interest-only SMBSs
generally increase in value as interest rates rise and decrease in value as
interest rates fall, counter to changes in value experienced by most fixed
income securities. If the underlying mortgages experience slower than
anticipated prepayments of principal, the yield on a PO class will be affected
more severely than would be the case with a traditional mortgage-related
security. Because the yield to maturity of an IO class is extremely sensitive
to the rate of principal payments (including prepayments) on the related
underlying mortgage-backed securities, it is possible that the Fund might not
recover its original investment on interest-only SMBSs if there are
substantial prepayments on the underlying mortgages. The Fund's inability to
fully recoup its investment in these securities as a result of a rapid rate of
principal prepayments may occur even if the securities are rated AAA by an
NRSRO. In view of these considerations, Huntington or Piper intends to use
these characteristics of interest-only SMBSs to reduce the effects of interest
rate changes on the value of the Fund's portfolio, while continuing to pursue
current income.

U.S. GOVERNMENT SECURITIES. The U.S. government securities in which the Fund
invests are either issued or guaranteed as to payment of principal and
interest by the U.S. Government, its agencies, or instrumentalities. The
current market prices for such securities are not guaranteed and will
fluctuate. Investments in U.S. Government securities are limited to:

(a)direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and

Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. Government, such as Government National Mortgage Association
participation certificates, are backed by the full

faith and credit of the U.S. Treasury. No assurances can be given that the
U.S. Government will provide financial support to other agencies or
instrumentalities, since it is not obligated to do so. These instruments are
supported by:

(a)the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;

(b)the discretionary authority of the U.S. Government to purchase certain
obligations of an agency or instrumentality; or

(c)the credit of the agency or instrumentality.

. When interest rates fall and additional mortgage prepayments must be
reinvested at lower interest rates, the income of the Fund will be reduced.

The Fund's investments in mortgage-related securities include derivative
mortgage securities such as CMOs and stripped mortgage-backed securities
which, as discussed above, may involve risks in addition to those found in
other mortgage-related securities. The market experience of 1994 has shown
that certain derivative mortgage securities may be highly sensitive to changes
in interest and
prepayment rates and, as a result, the prices of such securities may be highly
volatile. In addition, the market experience of 1994 has shown that during
periods of rising interest rates, the market for certain derivative mortgage
securities may become more unstable and such securities may become more
difficult to sell as market makers either choose not to repurchase such
securities or offer prices, based on current market conditions, which are
unacceptable to the Fund.

OHIO TAX-FREE FUND

The Fund may also invest in numerous types of short-term tax-exempt
instruments, which may be used to fund short-term cash requirements such as
interim financing in anticipation of the collections, revenue receipts or bond
sales to finance various public purposes.

CREDIT ENHANCEMENT. Certain of the portfolio investments of the Fund may
have been credit enhanced by a guaranty, letter of credit or insurance. The
Fund typically evaluates the credit quality and ratings of credit enhanced
securities based upon the financial condition and ratings of the party
providing the credit enhancement (the "credit enhancer"), rather than the
issuer. However, credit enhanced securities will not be treated as having been
issued by the credit enhancer for diversification purposes, unless the Fund
has invested more than 10% of its assets in securities issued, guaranteed or
otherwise credit enhanced by the credit enhancer, in which case the securities
will be treated as having been issued both by the issuer and the credit
enhancer. The bankruptcy, receivership or default of the credit enhancer will
adversely affect the quality and marketability of the underlying security.

FIXED INCOME SECURITIES FUND

The objective of the Fixed Income Securities Fund is to achieve high current
income through investment in fixed income securities where the average
maturity of the Fund will not exceed 10 years.

The Fund may purchase obligations of the U.S. Government and its agencies and
instrumentalities, corporate bonds, debentures, nonconvertible fixed income
preferred stocks, mortgage pass-through securities, eurodollar certificates of
deposit and eurodollar bonds. The Fund may also invest up to 10% of its net
assets in non-U.S. dollar denominated bonds. Both fixed and variable rate
issues may be purchased. Debt securities will be rated at the time of purchase
in one of the top three categories by an NRSRO(s) or, if not rated, of
comparable quality as determined by Huntington under guidelines established by
the Trustees. As a matter of fundamental policy, under normal market
conditions, the Fund will invest at least 65% of its assets in fixed income
securities. The Fund may also, under normal market conditions, invest a
portion of its assets in cash equivalents, including repurchase agreements and
the shares of money market mutual funds, for liquidity purposes.

ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES

OHIO TAX-EXEMPT SECURITIES

The two principal classifications of Ohio tax-exempt securities are general
obligation and limited obligation (or revenue) securities. General obligation
securities involve the credit of an issuer possessing taxing power and are
payable from the issuer's general unrestricted revenues. The characteristics
and methods of enforcement of general obligation securities vary according to
the law
applicable to the particular issuer. Limited obligation securities are payable
only from the revenues derived from a particular facility or class of
facilities, or a specific revenue source, and generally are not payable from
the unrestricted revenues of the issuer. Private activity bonds and industrial
development bonds generally are limited obligation securities, the credit and
quality of which are usually directly related to the credit of the private
user of the facilities.

NON-DIVERSIFICATION

The Ohio Municipal Money Market Fund and the Ohio Tax-Free Fund (the "Ohio
Funds") are non-diversified Funds under the Investment Company Act of 1940,
which means that they may invest their assets in the obligations of fewer
issuers than would be the case if they were "diversified". The Ohio Funds'
ability to invest a relatively high percentage of their assets in the
securities of a limited number
of issuers involves an increased risk of loss to an Ohio Fund if any one
issuer is unable to make interest or principal payments or if the market value
of the issuer's securities declines.

DEFENSIVE INVESTMENT STRATEGIES

OPTIONS AND FUTURES CONTRACTS (ALL FUNDS OTHER THAN THE MONEY MARKET FUNDS AND
THE OHIO TAX-FREE FUND)

A Fund may seek to increase its current return by writing covered call
options and covered put options on its portfolio securities or other
securities in which it may invest. A Fund receives a premium from writing a
call or put option, which increases a Fund's return if the option expires
unexercised or is closed out at a net profit. A Fund may also buy and sell put
and call options on its securities for hedging purposes. When a Fund writes a
call option on a portfolio security, it gives up the opportunity to profit
from any increases in the price of the security above the exercise price of
the option. When it writes a put option, a Fund takes the risk that it will be
required to purchase a security from the option holder at a price above the
current market price of the security. A Fund may terminate an option that it
has written prior to expiration by entering into a closing purchase
transaction in which it purchases an option having the same terms as the
option written.

In connection with its futures transactions, a Fund will be required to
deposit as "initial margin" an amount of cash and/or securities. Thereafter,
subsequent payments (referred to as "variation margin") are made to and from
the broker to reflect changes in the value of the futures contract. A Fund
will not
generally purchase or sell futures contracts or purchase or sell options on
futures contracts if as a result the sum of initial margin deposits on a
Fund's existing futures contracts and options written by a Fund plus premiums
paid for outstanding options on futures contracts purchased by a Fund, would
exceed 5% of a Fund's net assets.

The Funds generally expect that their options and futures transactions will
be conducted on recognized exchanges. In certain instances, however, a Fund
may purchase and sell options in the over-the-counter ("OTC") markets. A
Fund's ability to terminate options in the OTC market may be more limited than
for exchange-traded options and may also involve the risk that securities
dealers participating in such transactions would be unable to meet their
obligations to a Fund. A Fund will, however, engage in OTC market transactions
only when appropriate exchange-traded transactions are unavailable and when,
in the opinion of Huntington, the pricing mechanism and liquidity of the OTC
market is satisfactory and the participants are responsible parties likely to
meet their contractual obligations.

For more information about any of the options or futures portfolio
transactions described above, see the Statement of Additional Information.

FOREIGN INVESTMENTS

In addition, with respect to certain foreign countries, there is a
possibility of nationalization or expropriation of assets, confiscatory
taxation, political or financial instability and diplomatic
developments which could affect the value of investments in those countries.
In certain countries, legal remedies available to investors may be more
limited than those available with respect to investments in the United States
or other countries. The laws of some foreign countries may limit a Fund's
ability to invest in securities of certain issuers located in those countries.
Special tax considerations apply to foreign securities.

A Fund may buy or sell foreign currencies and forward foreign currency
exchange contracts for hedging purposes in connection with its foreign
investments.

A more detailed explanation of foreign investments, and the risks associated
with them, is included in the Statement of Additional Information.

REPURCHASE AGREEMENTS

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

A Fund may dispose of a commitment prior to settlement if the Fund's adviser
deems it appropriate to do so.

In connection with its ability to purchase securities on a when-issued or
delayed delivery basis, the Mortgage Securities Fund may enter into mortgage
"dollar rolls" in which the Fund sells securities for delivery in the current
month and simultaneously contracts with the same counterparty to repurchase
similar (same type, coupon and maturity) but not identical securities on a
specified future date. The Fund gives up the right to receive principal and
interest paid on the securities sold. However, the Fund would benefit to the
extent of any difference between the price received for the securities
sold and the lower forward price for the future purchase plus any fee income
received. Unless such benefits exceed the income, capital appreciation and
gain or loss due to mortgage prepayments that would have been realized on the
securities sold as part of the mortgage dollar roll, the use of this technique
will diminish the investment performance of the Fund compared with what such
performance would have been without the use of mortgage dollar rolls. The Fund
will hold and maintain in a segregated account until the settlement date, cash
or liquid high-grade debt securities in an amount equal to the forward
purchase price. The benefits derived from the use of mortgage dollar rolls may
depend upon Piper's ability to predict correctly mortgage prepayments and
interest rates. There is no assurance that mortgage dollar rolls can be
successfully employed. In addition, the use of mortgage dollar rolls by the
Fund while remaining substantially fully invested increases the amount of the
Fund's assets that are subject to market risk to an amount that is greater
than the Fund's net asset value, which could result in increased volatility of
the price of the Fund's shares. The Mortgage Securities Fund may invest up to
35% of its total assets in securities purchased on a when-issued or delayed
delivery basis.

LENDING OF PORTFOLIO SECURITIES

INVESTMENT RESTRICTIONS

No Fund will:

(1) Except for the Ohio Funds, invest more than 5% of the value of its
total assets in the securities of any one issuer (this limitation does
not apply to securities issued or guaranteed by the U.S. Government or
any of its agencies or instrumentalities or to repurchase agreements
secured by such obligations);

(2) Invest 25% or more of the value of its total assets (i) in securities
of companies primarily engaged in any one industry (other than the U.S.
Government, its agencies and instrumentalities), and (ii) with respect
to the Ohio Funds, in municipal obligations of one issuer or which are
related in such a way that, in the opinion of Huntington, an economic,
business or political development other than an Ohio state-wide,
national or international development, affecting one such obligation
would also affect the others in a similar manner. Such concentration
may occur as a result of changes in the market value of portfolio
securities, but such concentration may not result from investment;

(3) Except for investments by the Money Market Fund in commercial paper
issued under Section 4(2) of the Securities Act of 1933 and certain
other restricted securities which meet the criteria for liquidity as
established by the Trustees, invest more than 10% of the value of its
total assets in illiquid securities, including restricted securities,
repurchase agreements of over seven days' duration and OTC options; and

(4) Borrow in excess of 5% of its total assets (borrowings are permitted
only as a temporary measure for extraordinary or emergency purposes) or
pledge (mortgage) its assets as security for any indebtedness.

HOW THE FUNDS VALUE THEIR SHARES

Each Money Market Fund attempts to stabilize the net asset value of its
Investment Shares at $1.00 by valuing its portfolio securities using the
amortized cost method. The net asset value per Investment Share is determined
by adding the interest of the Investment Shares in the value of all securities
and other assets of a Fund, subtracting the interest of the Investment Shares
in the liabilities of a Fund and those attributable to Investment Shares, and
dividing the remainder by the total number of Investment Shares outstanding.

A Fund cannot guarantee that its net asset value will always remain at $1.00
per share.

The net asset value for Investment Shares of each of the other Funds is
determined by adding the interest of the Investment Shares in the market value
of all securities and other assets of a Fund, subtracting the interest of the
Investment Shares in the liabilities of a Fund and those attributable to
Investment Shares, and dividing the remainder by the total number of
Investment Shares outstanding. The net asset value of a Fund's Investment
Shares will differ from that of Trust Shares due to the expense of the Rule
12b-1 fee applicable to a Fund's Investment Shares.

The Money Market Funds calculate net asset value per Investment Share at
12:00 noon (Eastern Time) and as of the close of the New York Stock Exchange
(currently 4:00 p.m. Eastern Time) on each Business Day. The other Funds
calculate net asset value per Investment Share as of the close of the New York
Stock Exchange (currently 4:00 p.m. Eastern Time) on each Business Day. As
used herein, a "Business Day" constitutes Monday through Friday except (i)
days on which there are not sufficient changes in the value of a Fund's
portfolio securities that its net asset value might be materially affected;
(ii) days during which no shares are tendered for redemption and no orders to
purchase shares are received; and (iii) the following holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

HOW TO BUY INVESTMENT SHARES

Investment Shares of the Funds may be purchased through The Huntington
Investment Company, Huntington Personal Bankers or the Mutual Fund Services
Center (collectively, the "Huntington
Group") pursuant to respective agreements between The Huntington Investment
Company or The Huntington Trust Company, N.A. and the Distributor. Texas
residents must purchase shares through the Distributor at 1-800-618-8573.
Investors may purchase Investment Shares of the Funds on all Business Days.
Investment Shares in each Money Market Fund purchased prior to 10:30 a.m.
(Eastern Time) begin earning dividends that day; Investment Shares purchased
after such time begin earning dividends on the following day. In connection
with the sale of a Fund's Investment Shares, the Distributor may from time to
time offer certain items of nominal value to any shareholder.

From time to time, the Trust may temporarily suspend the offering of shares
of one or more of the Funds or any class thereof. During the period of any
such suspension and depending on the reasons for the suspension, persons who
are already shareholders of any such Fund or class may be permitted to
continue to purchase additional shares and to have dividends reinvested. The
Trust or the Distributor may refuse any order to purchase shares or waive any
minimum purchase requirements. The Funds will issue certificates representing
Investment Shares upon request.

TO PLACE AN ORDER

To purchase Investment Shares of the Funds, an investor may call The
Huntington Investment Company at 800-322-4600, or the investor's Personal
Banker directly. All other investors should call the Mutual Fund Services
Center at (in Ohio) 614-463-5580 or (outside the 614 Area Code) 800-253-0412.

Payment may be made either by check or wire transfer of federal funds. To
purchase by check, the check must be included with the order and made payable
to the name of the applicable Fund, designating Investment Shares. If a
shareholder pays for Investment Shares by check and the check does not clear,
the purchase will be cancelled, and the shareholder may be charged a fee and
will be liable for any losses incurred. Neither initial nor subsequent
investments will be made by third party check. Orders are considered received
after payment by check is converted into federal funds by the Funds' transfer
agent, Federated Services Company (the "Transfer Agent").

When payment is made through wire transfer of federal funds, the order is
considered received immediately upon receipt by the Transfer Agent. With
respect to the Money Market Fund, Ohio Municipal Money Market Fund and U.S.
Treasury Money Market Fund, payment by wire must be received by the applicable
member of the Huntington Group before 10:30 a.m. (Eastern Time) in order to
earn dividends for that day. With respect to the Growth Fund, Mortgage
Securities Fund, Ohio Tax-Free Fund and Fixed Income Securities Fund, payment
by wire must be received by the applicable member of the Huntington Group
before 4:00 p.m. (Eastern Time) in order for Investment Shares of a Fund to be
purchased at that day's price. Prior to purchasing by wire, investors should
call the applicable member of the Huntington Group. It is the responsibility
of the applicable member of the Huntington Group to transmit orders promptly
to the Transfer Agent. Federal funds should be wired as follows: Huntington
National Bank, ABA 044000024, Trust Department, Account Number 01891160404,
Monitor Retail, Attention: Shareholder Services.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in Investment Shares of a Fund is $1,000.
Subsequent investments must be in amounts of at least $50.

WHAT SHARES COST

Money Market Funds

With respect to the Money Market Fund, Ohio Municipal Money Market Fund and
U.S. Treasury Money Market Fund, Investment Shares are sold at their net asset
value next determined after an order is received. There is no sales charge
imposed by these Funds.

Equity Fund

With respect to the Growth Fund, Investment Shares are sold at their net
asset value per share next determined after an order is received, plus a sales
charge as follows:

<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE OF A PERCENTAGE OF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
--------------------- --------------------- -------------------
<S> <C> <C>
Less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $750,000 1.50% 1.52%
$750,000 but less than $1 million 0.75% 0.76%
$1 million or more 0.25% 0.25%
</TABLE>

Income Funds

With respect to the Mortgage Securities Fund, Ohio Tax-Free Fund and Fixed
Income Securities Fund, Investment Shares are sold at their net asset value
per share next determined after an order is received, plus a sales charge as
follows:

<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE OF A PERCENTAGE OF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
--------------------- --------------------- -------------------
<S> <C> <C>
Less than $500,000 2.00% 2.04%
$500,000 but less than $750,000 1.50% 1.52%
$750,000 but less than $1 million 0.75% 0.76%
$1 million or more 0.00% 0.00%
</TABLE>

Purchases at Net Asset Value. Investment Shares issued through reinvestment
of dividends and capital gains distributions are not subject to a sales
charge. In addition, Investment Shares of a Fund may be purchased at net asset
value, without a sales charge, by officers, directors, employees (and their
spouses and family members) and retirees of Huntington Bancshares Incorporated
and its subsidiaries.

Dealer Concession. For sales of Investment Shares of the Funds, a dealer
will normally receive up to 90% of the applicable sales charge. Any portion of
the sales charge which is not paid to a dealer will be retained by the
Distributor. However, the Distributor will, periodically, uniformly offer to
pay cash, or promotional incentives in the form of trips to sales seminars at
luxury resorts, tickets or other items, to all dealers selling Investment
Shares of the Funds, from that portion of the sales load which the Distributor
retains or any other source available to it. Such payments will be predicated
upon the amount of Investment Shares of the Funds that are sold by the dealer.

The sales charge for Investment Shares sold other than through registered
broker/dealers will be retained by the Distributor. The Distributor may pay
fees to banks out of the sales charge in exchange
for sales and/or administrative services performed on behalf of the banks'
customers in connection with the initiation of customer accounts and purchases
of Investment Shares of the Funds.

Reducing the Sales Charge. The sales charge can be reduced through:

. quantity discounts and accumulated purchases;

. signing a 13-month letter of intent;

. using the reinstatement privilege; or

. concurrent purchases.

Quantity Discounts and Accumulated Purchases. As shown in the table above,
larger purchases reduce the sales charge paid. The Distributor will combine
purchases made on the same day by the investor, his spouse, and his children
under age 21 when it calculates the sales charge. In addition, the sales
charge, if applicable, is reduced for purchases made at one time by a trustee
or fiduciary for a single trust estate or a single fiduciary account.

If an additional purchase of Investment Shares in a Fund which impose a
sales charge is made, the Distributor will aggregate such additional purchases
with previous purchases of Investment Shares of Funds imposing a sales charge
provided the prior purchase is still invested in the Funds. For example, if a
shareholder already owns Investment Shares having a current value at the
public offering price of $700,000 and he purchases $50,000 more at the current
public offering price, the sales charge on the additional purchase according
to the schedule now in effect would be 0.75%, not 1.5%.

To receive the sales charge reduction, an investor should complete the
appropriate section of the account application at the time the purchase is
made indicating that Investment Shares of Funds which impose a sales charge
have been purchased and are still invested or that such purchases are being
combined. The Distributor will reduce the sales charge after it confirms the
purchase.

Letter of Intent. If an investor intends to purchase at least $100,000 of
Investment Shares in a Fund that imposes a 4% sales charge or at least
$500,000 in one or more Funds that imposes a 2% sales charge, over the next 13
months, the sales charge may be reduced by completing the Letter of Intent
section of the account application. The Letter of Intent includes a provision
for a sales charge adjustment depending on the amount actually purchased
within the 13-month period. In addition, pursuant to a Letter of Intent, the
custodian will hold in escrow the difference between the sales charge
applicable to the amount initially purchased and the sales charge paid at the
time of the investment, which is based on the amount covered by the Letter of
Intent.

For example, assume an investor signs a Letter of Intent to purchase at
least $250,000 in Investment Shares of a Fund that imposes a 4% sales charge
and, at the time of signing the Letter of Intent, purchases $100,000 of
Investment Shares of one of these Funds. The investor would pay an initial
sales charge of 2.50% (the sales charge applicable to purchases of $250,000),
and 1.00% of the investment (representing the difference between the 3.50%
sales charge applicable to purchases of $100,000 and the 2.50% in sales
charges already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more of Investment Shares under his Letter of
Intent.

The amount held in escrow will be applied to the investor's account at the
end of the 13-month period unless the amount specified in the Letter of Intent
is not purchased. In order to qualify for a Letter of Intent, the investor
will be required to make a minimum initial investment of at least $25,000.

A Letter of Intent will not obligate the investor to purchase Investment
Shares, but if he does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within
the past 90 days.

Reinstatement Privilege. If Investment Shares in a Fund have been redeemed,
the shareholder has a one-time right, within 30 days of redemption, to
reinvest the redemption proceeds at the next-determined net asset value
without any sales charge. The applicable member of the Huntington Group must
be notified in writing of the reinvestment by the shareholder in order to
eliminate a sales charge. If the shareholder redeems his Investment Shares in
a Fund and utilizes the reinstatement privilege, there may be tax
consequences.

Concurrent Purchases. For purposes of qualifying for a sales charge
reduction, a shareholder has the privilege of combining concurrent purchases
of Investment Shares in two or more Funds in the Trust, the public offering
price of which includes a sales charge. For example, if a shareholder of the
Growth Fund concurrently invests $30,000 in one Fund with a sales charge, and
$70,000 in another Fund with a sales charge, the sales charge will be reduced.
In addition, if a shareholder of the Mortgage Securities Fund, Ohio Tax-Free
Fund or Fixed Income Securities Fund concurrently invests $50,000 in one Fund
with a sales charge, and $450,000 in another Fund with a sales charge, the
sales charge will be reduced.

To receive this sales charge reduction, the applicable Huntington Group
member must be notified in writing by the shareholder (at the address provided
below under "How to Exchange Investment Shares Among the Funds--By Mail") at
the time the concurrent purchases are made. The Distributor will reduce the
sales charge after it confirms the purchases.

SYSTEMATIC INVESTMENT PROGRAM

Once an account has been opened, holders of Investment Shares of a Fund may
add to their investment on a regular basis in minimum amounts of at least $50.
Under this program, funds will be automatically withdrawn periodically from
the shareholder's checking account and invested in Investment Shares of a Fund
at the applicable public offering price per share next determined after an
order is received by the Transfer Agent. Shareholders may apply for
participation in this program by completing the appropriate section of the
account application.

HOW TO EXCHANGE INVESTMENT SHARES AMONG THE FUNDS

Shareholders may exchange Investment Shares in any Fund for Investment
Shares in any other Fund offering Investment Shares at the respective net
asset values per Investment Share next determined after receipt of the request
in good order, plus the applicable sales charge (if any) as described below.
This privilege is available to shareholders resident in any state in which the
Fund shares being acquired may be sold.

No sales charge applies when Investment Shares are exchanged from a Fund
that imposes such a charge to a Fund with no sales charge. If, however, a
shareholder seeks to exchange shares of a Fund that does not have a sales
charge for shares of a Fund that imposes such a charge, the shareholder will
be required to pay the applicable sales charge of the Fund into which the
shares are exchanged. In all cases, shareholders will be required to pay a
sales charge only once. Thus, for example, no sales charge applies when shares
are exchanged among Funds that impose a sales charge. Similarly, no sales
charge applies where a shareholder exchanges shares of a Fund with a
sales charge for shares of a Fund that does not impose such a charge and
subsequently exchanges those shares back into a Fund with a sales charge.

If the exchanging shareholder does not have an account in the Fund whose
Investment Shares are being acquired, a new account will be established with
the same registration and reinvestment options for dividends and capital gains
distributions as the account of the Fund from which the Investment Shares are
exchanged, unless otherwise specified in writing by the shareholder. In the
event the new account registration is not identical to that of the existing
account, a signature guarantee will be required. (See "Redeeming By Mail"
below.)

An exchange is treated as a sale for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may
be realized. In addition, if a shareholder exchanges shares of a Fund that
imposes a sales charge into another Fund that imposes such a charge, there may
be special tax consequences.

The Trust's exchange privileges may be terminated or modified. Except as
indicated below, shareholders will be given 60 days' prior notice of any such
termination or any material amendment of existing exchange privileges. No
notice will be given when the only material effect of an amendment is to
reduce or eliminate any charges payable at the time of an exchange or under
certain extraordinary circumstances, such as in connection with the suspension
of the sale or redemption of Fund shares. Shareholders may obtain further
information on the exchange privilege by calling the applicable member of the
Huntington Group.

BY TELEPHONE

Shareholders may provide instructions for exchanges between Funds by
calling: The Huntington Investment Company at 800-322-4600; their Personal
Banker directly or Mutual Fund Services Center at (in Ohio) 614-463-5580 or
(outside the 614 Area Code) 800-253-0412. Investors may request the Trust's
telephone exchange privilege on their account application. Information on this
service can be obtained through the applicable member of the Huntington Group.

Investment Shares may be exchanged by telephone only between Fund accounts
having identical shareholder registrations. Exchange instructions given by
telephone may be electronically recorded and will be binding upon the
shareholder. Because telephone exchange requests will be honored from anyone
who provides the correct information (described below under "By Mail"), this
service involves a possible risk of loss if someone uses the service without
the shareholder's permission.

Telephone exchange instructions must be received by the applicable member of
the Huntington Group before 3:00 p.m. (Eastern Time) for Investment Shares to
be exchanged the same day. The telephone exchange privilege may be modified or
terminated at any time and shareholders will be notified of any such
modification or termination. Shareholders of a Fund may have difficulty in
making exchanges by telephone during times of extreme economic or market
conditions. If a shareholder cannot make contact by telephone, it is
recommended that an exchange request be made in writing and sent by overnight
mail to the appropriate member of the Huntington Group. Written instructions
may require a signature guarantee. If reasonable procedures are not followed
by the Funds, they may be liable for losses due to unauthorized or fraudulent
telephone instructions.

BY MAIL

Shareholders may provide instructions for exchanges between the Funds by
making a written request to the appropriate member of the Huntington Group at
Huntington Center, 41 South High Street, Columbus, Ohio 43287.

To exchange by letter or by telephone, a shareholder must state (1) the name
of the Fund from which the exchange is to be made (and designating that
Investment Shares are involved), (2) the name(s) and address on the
shareholder account, (3) the account number, (4) the dollar amount or number
of Investment Shares to be exchanged, and (5) the Fund into which the
Investment Shares are to be exchanged. Written exchange requests must be
signed by the shareholder, and it may be necessary to have the shareholder's
signature guaranteed by a member firm of a national securities exchange or by
a commercial bank, savings and loan association or trust company. Further
documentation may be required, and a signature guarantee is generally required
from corporations, executors, administrators, trustees and guardians.

HOW TO REDEEM INVESTMENT SHARES

Shareholders may redeem all or any portion of the Investment Shares in their
account on any Business Day at the appropriate net asset value per share next
determined after a redemption request in proper form is received by the
Transfer Agent. Under unusual circumstances, a Fund may suspend redemptions or
postpone payment for more than seven days, as permitted by federal securities
law.

REDEEMING BY TELEPHONE

A shareholder may redeem Investment Shares of a Fund by calling The
Huntington Investment Company at 800-322-4600, their Personal Banker directly
or the Mutual Fund Services Center at (in Ohio) 614-463-5580 or (outside the
614 Area Code) 800-253-0412.

Shareholders of the Money Market Fund, Ohio Municipal Money Market Fund, and
U.S. Treasury Money Market Fund who request a redemption before 10:30 a.m.
(Eastern Time) will usually have the proceeds wired the same day but will not
be entitled to that day's dividend; redemption requests received after 10:30
a.m. (Eastern Time) will receive that day's dividend and the proceeds will
normally be wired the following Business Day. Requests for redemptions in the
Income and Equity Funds must be received by the appropriate member of the
Huntington Group before 3:00 p.m. (Eastern Time) in order for Investment
Shares to be redeemed at that day's net asset value.

Members of the Huntington Group are responsible for promptly submitting
redemption requests and providing proper written redemption instructions to a
Fund. If at anytime the Trust shall determine it necessary to terminate or
modify this method of redemption, shareholders will be promptly notified.

Investors may request the Trust's telephone redemption privilege on their
account application. If not completed at the time of initial application,
authorization forms and information on this service can be obtained through
the members of the Huntington Group. Proceeds for redemptions will normally be
wired to the shareholder's account with proper authorization (at a domestic
commercial bank that is a member of the Federal Reserve System designated by
the shareholder in writing) or a check will be sent to the address of record.
Telephone redemption instructions may be recorded.

In the event of extreme economic or market conditions, a shareholder may
experience difficulty in redeeming by telephone. If such a case should occur,
another method of redemption, such as through written request, should be
considered. If reasonable procedures are not followed by the Funds, they may
be liable for losses due to unauthorized or fraudulent telephone instructions.

REDEEMING BY MAIL

Shareholders may redeem Investment Shares of a Fund by sending a written
request to the appropriate member of the Huntington Group. The written request
should include the shareholder's name, Fund name (designating Investment
Shares), the account number, and the Investment Share or dollar amount
requested.

Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Transfer
Agent, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:

--a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the FDIC;

--a member of the New York, American, Midwest, or Pacific Stock Exchanges;

--a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is
administered by the FDIC; or

-- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.

The Funds do not accept signatures guaranteed by a notary public.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request provided that Huntington has received payment for
Investment Shares from the shareholder. Shares will be redeemed at the net
asset value determined as of the end of the Business Day on which the written
redemption request is received by the Transfer Agent.

REDEEMING BY CHECK (MONEY MARKET FUNDS ONLY)

At the shareholder's request, the appropriate member of the Huntington Group
will establish a checking account for redeeming Investment Shares of the Money
Market Funds. Shareholders may be charged a fee for this service.

With a Fund checking account, Investment Shares may be redeemed simply by
writing a check for $250 or more. The redemption will be made at the
applicable net asset value per share on the date that the check is presented
to the Fund. A check may not be written to close an account. In addition, if a
shareholder wishes to redeem Investment Shares and have the proceeds
available, a check may be written and negotiated through the shareholder's
local bank. Checks should never be sent to the issuing bank to redeem
Investment Shares. Cancelled checks are sent to the shareholder each month.

REDEEMING BY FAX

Shareholders wishing to expedite the redemption process may Fax a copy of
their written request to the appropriate member of the Huntington Group at Fax
No. 614-480-4682 (The Huntington Investment Company) or 614-480-5516 (Mutual
Fund Services Center). Shareholders redeeming by Fax must call the appropriate
member of the Huntington Group to confirm receipt of the written request. See
"Redeeming By Telephone" in this Prospectus for a discussion of when
shareholders will receive redemption proceeds when redeeming by Fax.

SYSTEMATIC WITHDRAWAL PROGRAM

Shareholders who desire to receive payments of a predetermined amount may
take advantage of the Systematic Withdrawal Program. Under this program,
Investment Shares of a particular Fund are redeemed at the applicable net
asset value per Investment Share at the time of the withdrawal to provide for
periodic withdrawal payments in an amount directed by the shareholder.
Depending upon the amount of the withdrawal payments, the amount of dividends
paid and capital gains distributions with respect to Investment Shares, and
the fluctuation of the net asset value of Investment Shares redeemed under
this program, redemptions may reduce, and eventually deplete, the
shareholder's investment in Investment Shares of a particular Fund. For this
reason, payments under this program should not be considered as yield or
income on the shareholder's investment in Investment Shares of a Fund. To be
eligible to participate in this program, a shareholder must have an account
value of at least $10,000. A shareholder may apply for participation in this
program through the appropriate member of the Huntington Group.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, a Fund may
redeem Investment Shares in any account, except retirement plans, and pay the
proceeds to the shareholder if the account balance falls below the required
minimum value of $1,000 due to shareholder redemptions. This requirement does
not apply, however, if the balance falls below $1,000 because of changes in a
Fund's net asset value. Before Investment Shares are redeemed to close an
account, the shareholder will be notified in writing and allowed 30 days to
purchase additional Investment Shares to meet the minimum requirement.

MANAGEMENT OF THE TRUST

Subject to the supervision of the Trustees, Huntington provides a continuous
investment program for the Funds, including investment research and management
with respect to all securities, instruments, cash and cash equivalents in the
Funds. The Trust pays Huntington management fees, computed daily and payable
monthly, for each of the Funds at the following annual rates: Money Market
Fund and Ohio Municipal Money Market Fund: .30% of the first $500 million of
average daily net assets of the Fund, .25% of the next $500 million, and .20%
of any amount over $1 billion; U.S. Treasury Money Market Fund: .20% of the
Fund's average daily net assets; Growth Fund: .60% of the Fund's average daily
net assets; and Mortgage Securities Fund, Ohio Tax-Free Fund and Fixed Income
Securities Fund: .50% of the Fund's average daily net assets. Huntington may
periodically waive all or a portion of its management fee with respect to any
Fund to increase the net income of the Fund available for distribution as
dividends.

Adviser's Background. The Huntington Trust Company, N.A., a national banking
association, is an indirect, wholly-owned subsidiary of Huntington Bancshares
Incorporated ("HBI"). With $18 billion
in assets as of December 31, 1994, HBI is a major Midwest regional bank
holding company. Through its subsidiaries and affiliates, HBI offers a full
range of services to the public, including: commercial lending, depository
services, cash management, brokerage services, retail banking, international
services, mortgage banking, investment advisory services, and trust services.
Huntington, a recognized investment advisory and fiduciary services subsidiary
of HBI, provides investment advisory services for corporate, charitable,
governmental, institutional, personal trust and other assets. Huntington is
responsible for over $10 billion of assets, and has investment discretion over
approximately $3 billion of that amount.

Huntington has served as investment adviser to mutual funds since 1987 and
has over 75 years of experience providing investment advisory services to
fiduciary accounts.

Sub-Adviser's Background. Piper, located at Piper Jaffray Tower, Post Office
Box 28, Minneapolis, Minnesota, 55440, was formed in 1985. Piper is a wholly-
owned subsidiary of the publicly traded investment banking firm, Piper Jaffray
Companies, Inc. Piper provides investment management services, focusing on
ERISA/401 (k), public funds, Taft Hartley, endowment/foundation, pension
plans, and personal wealth. As of March 31, 1995, Piper managed 38 mutual
funds, five commingled funds, and individual/institutional accounts in excess
of $10.3 billion in assets.

Thomas J. Sauer, a Vice President of Huntington Trust Company, N.A., has
been a co-portfolio manager of the Growth Fund since November of 1993. Mr.
Sauer, a Chartered Financial Analyst, has more than 20 years of investment
experience including that of investment counselor and investment manager for a
major Midwest foundation and medical institution. He received his
undergraduate
degree from Ohio University, completed graduate course work at Case Western
Reserve University, and received an MBA from Baldwin Wallace College.

Marijo Goldstein has been a Senior Vice President of Piper Capital
Management since November, 1993, prior to which she had been a Vice President
of Piper Capital Management since 1991. She has been a co-portfolio manager of
the Mortgage Securities Fund since its inception. Ms. Goldstein joined Piper
Capital Management as a fixed income analyst in 1988. Prior to that, she was
an analyst in the Technical Research Department at Piper Jaffray, Inc.
beginning in 1985. She earned her MBA from the University of Minnesota and her
B.S. degree in Information Systems Management from the University of Maryland.

Stephen M. Geis, a Vice President of Huntington Trust Company, N.A., has
been the portfolio manager of the Fixed Income Securities Fund since October
of 1989. Mr. Geis, a Chartered Financial Analyst, serves as the Huntington's
senior fixed income manager. Prior to joining Huntington in 1988, he spent
nearly ten years as a fixed income manager for a major insurance company and
treasurer of a regional bank. Mr. Geis received his undergraduate degree from
the College of Wooster, his MBA from the University of Dayton, and his Juris
Doctorate from Capital University.

DISTRIBUTION OF INVESTMENT SHARES

DISTRIBUTION PLANS

Each Fund offering Investment Shares has adopted a Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"Distribution Plan"). The Distribution Plan provides for payments to be made
to the Distributor in connection with the provision of certain services
(described below) with respect to the Funds' Investment Shares.

In accordance with the Distribution Plan, the Distributor may enter into
agreements with brokers and dealers relating to distribution and/or
administrative services with respect to the Investment Shares of the Funds.
The Distributor may also enter into agreements with administrators (including
financial institutions, fiduciaries, custodians for public funds, and
investment advisers) to provide administrative services with respect to
Investment Shares. Administrative services may include, but are not limited
to, the following functions: providing office space, equipment, telephone
facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase
and redemption transactions and automatic investments of customer account cash
balances; answering routine customer inquiries regarding Investment Shares;
assisting customers in changing dividend options, account designations, and
addresses; and providing such other services as the Distributor may reasonably
request in connection with investments in Investment Shares. As of the date of
this Prospectus, The Huntington Investment Company and The Huntington Trust
Company, N.A. have entered into agreements with the Distributor concerning the
provision of administrative services to customers of the Huntington Group who
purchase Investment Shares of the Funds.

In connection with the provision of the distribution and administrative
services described above, the Distributor will pay brokers, dealers and
administrators (including The Huntington Investment Company) a fee based on
the amount of Investment Shares owned by their customers. For all of the Funds
except the Mortgage Securities Fund and the U.S. Treasury Money Market Fund,
the schedules of such fees and the basis upon which such fees will be paid
will be determined, from time to time, by the Trustees. Under such
Distribution Plan, fees paid by the Distributor for services rendered with
respect to a Fund's Investment Shares will be reimbursed by the Fund in an
amount which may not exceed an annual rate of .25 of 1% of the average daily
net assets attributable to the Fund's Investment Shares held in customer
accounts for which brokers, dealers, and administrators provide such services.
Fees under the Distribution Plan with respect to each Fund's Investment Shares
are accrued daily, payable quarterly, and calculated on an annual basis.

The Mortgage Securities Fund and the U.S. Treasury Money Market Fund have
adopted a separate Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Compensation Plan" and, with the
Distribution Plan, the "Distribution Plans"). The Mortgage Securities Fund
will pay to the Distributor an amount, computed at an annual rate of .50 of 1%
of the average daily net asset value of the Mortgage Securities Fund's
Investment Shares, to finance any activity which is principally intended to
result in the sale of Investment Shares subject to the Compensation Plan. The
U.S. Treasury Money Market Fund will pay to the Distributor an amount computed
at an annual rate of 0.25% of the average daily net asset value of the U.S.
Treasury Money Market Fund's Investment Shares to finance any activity which
is principally intended to result in the sale of Investment Shares subject to
the Compensation Plan. These activities are extremely similar, and in some
cases identical, to the types of administrative services that are furnished to
the Trust's other Funds pursuant to the Distribution Plan (and described
above). The Distributor may, from time to time and for such periods as it
deems appropriate, voluntarily reduce its compensation under the Compensation
Plan to the extent expenses attributable to the Mortgage Securities Fund's and
the U.S. Treasury Money Market Fund's Investment Shares exceed such lower
expense limitation as the Distributor may, by notice to the Trust, voluntarily
declare to be effective.

The Mortgage Securities and the U.S. Treasury Money Market Funds' plan is a
compensation type plan. As such, the Funds make no payments to the Distributor
except as described above. Therefore, the Funds do not pay for unreimbursed
expenses of the Distributor, including amounts expended by the Distributor in
excess of amounts received by it from the Funds, interest, carrying or other
financing charges in connection with excess amounts expended, or the
Distributor's overhead expenses. However, the Distributor may be able to
recover such amounts or may earn a profit from future payments made by the
Funds under the Compensation Plan.

The Glass-Steagall Act prohibits a depository institution (such as a
commercial bank or a savings and loan association) from being an underwriter
or distributor of most securities. In the event the Glass-Steagall Act is
deemed to prohibit depository institutions from acting in the administrative
capacities described above or should Congress relax current restrictions on
depository institutions, the Trustees will consider appropriate changes in the
administrative services performed in connection with the Distribution Plans.

State securities laws governing the ability of depository institutions to
act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks and
financial institutions may be required to register as brokers or dealers
pursuant to state law.

Shareholder Servicing Arrangements. In addition to the fees paid by the
Distributor to financial institutions under the Distribution Plans as
described above, the Distributor may also pay financial institutions a fee
based upon the average net asset value of Investment Shares held by their
customers for providing administrative services. This fee, if paid, will be
reimbursed by the Huntington and not the Funds.

ADMINISTRATION OF THE FUNDS

Federated Administrative Services, a subsidiary of Federated Investors,
provides the Funds with certain administrative personnel and services
necessary to operate the Funds.

For these services, each of the Growth Fund, the Mortgage Securities Fund,
Ohio Tax-Free Fund, Fixed Income Securities Fund, Money Market Fund, Ohio
Municipal Money Market Fund, and U.S. Treasury Money Market Fund pays a fee,
computed and payable daily, to Federated Administrative Services at a blended
annual rate, based on the daily net assets of the Trust taken as a whole, as
specified below:

<TABLE>
<CAPTION>
ADMINISTRATIVE FEE AVERAGE AGGREGATE DAILY NET ASSETS OF THE TRUST
------------------ -----------------------------------------------
<S> <C>
.160 of 1% on the first $750 million
.135 of 1% on the next $500 million
.110 of 1% on assets in excess of $1.25 billion
</TABLE>

The administrative fee paid by any Fund during any fiscal year will not be
less than $75,000 with regard to the above named Funds.

Federated Administrative Services has agreed not to enforce the applicable
minimum fee with respect to any Fund for a period of eighteen months following
the initiation of each Fund's public offering of shares. Federated
Administrative Services may limit voluntarily any portion of its fee at any
time.

CUSTODIAN, RECORDKEEPER, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants for the Trust are Price Waterhouse LLP,
Columbus, Ohio.

DISTRIBUTIONS AND TAXES

MONEY MARKET FUNDS

OTHER FUNDS

DISTRIBUTION OPTIONS

Shareholders of the Money Market Funds may choose to receive all
distributions in cash or to reinvest all distributions in additional
Investment Shares of a Fund. Shareholders of other Funds may choose to receive
all distributions in cash, to reinvest all distributions in additional
Investment Shares, or to reinvest all capital gains distributions in
additional Investment Shares and to receive all other distributions in cash.
Shareholders may choose a distribution option by selecting the appropriate
option on the Account Registration Form or by notifying the appropriate member
of the Huntington Group of their selection. If a shareholder fails to choose a
distribution option, all distributions will be reinvested in additional
Investment Shares of the Fund making the distribution.

FEDERAL INCOME TAXES

All distributions by a Fund to a shareholder (with the exception of
distributions of tax-exempt income by the Ohio Funds and other than long-term
capital gain distributions, if any) will be taxable as ordinary income to the
extent of a Fund's current and accumulated "earnings and profits." However,
shareholders not subject to tax on their income generally will not be required
to pay tax on amounts distributed to them. The dividends received deduction
for corporations will apply to ordinary income distributions to the extent the
distribution represents amounts that would qualify for the dividends received
deduction to the Fund if the Fund were a regular corporation, and to the
extent designated by the Fund as so qualifying. The Money Market Funds and the
Income Funds do not expect to pay
any distributions that would be eligible for the dividends received deduction.
If a Fund were to have net long-term capital gains in excess of short-term
losses in a particular year, distributions by a Fund of those gains will be
taxable to a shareholder as long-term capital gains, regardless of how long a
shareholder has held the shares. If a shareholder disposes of shares at a loss
before holding such shares for longer than six months, such loss will be
treated as a long-term capital loss to the extent the shareholder has received
a long-term capital gains dividend on the shares.

In general, dividends paid by the Ohio Funds that are designated by the
Funds as "exempt-interest dividends" will be exempt from regular income tax.
However, under the Internal Revenue Code of 1986, as amended (the "Code"),
dividends paid by the Ohio Funds attributable to interest on certain private
activity bonds issued after August 7, 1986 must be included as an item of tax
preference in computing alternative minimum taxable income for the purpose of
determining liability (if any) for the 26%-28% federal alternative minimum tax
for individuals and the 20% federal alternative minimum tax for corporations.
In addition, exempt-interest dividends paid by the Ohio Funds will be included
in a corporation's "adjusted current earnings" for purposes of the alternative
minimum tax. Thus, a corporation's alternative minimum tax base would
generally be increased by 75% of interest received which is excluded from
gross income for regular federal income tax purposes (other than dividends
paid by the Ohio Funds attributable to interest on certain private activity
bonds issued after August 7, 1986, which interest would already be included in
alternative minimum taxable income as a specific item of tax preference).

Early in each year each Fund will notify each of its shareholders of the
amount and the federal income tax status of the distributions paid or deemed
paid to the shareholder by the Fund during the preceding year.

OHIO PERSONAL INCOME TAXES

Dividends received from the Ohio Funds that are derived from interest on
Ohio tax-exempt securities are exempt from the Ohio personal income tax.
Specific state statutes authorizing the issuance of certain Ohio tax-exempt
securities provide that the interest on and gain from the sale or
other disposition of such obligations are exempt from all taxation in the
State. Dividends on shares of an Ohio Fund which are attributable to interest
on or gain from the sale of obligations issued pursuant to such statutes
should be exempt from the Ohio personal income tax. Ohio municipalities may
not impose income taxes on dividends or any intangible property, including
shares of the Ohio Funds, except that municipalities that taxed the types of
intangible income which were not exempt from municipal income taxation on or
before April 1, 1986, may tax such intangible income if such a tax was
approved by the electors of the municipality in an election held on November
8, 1988. Ohio residents should consult their own tax adviser regarding
potential municipal income tax liability in connection with their investment
in an Ohio Fund. The description in this paragraph, which is only a summary of
the Ohio tax treatment of dividends paid by the Ohio Funds, is based upon
current statutes and regulations and upon current policies of the Ohio
Department of Taxation, all of which are subject to change.

ORGANIZATION OF THE TRUST

The Trust is an open-end management investment company, whose Declaration of
Trust permits the Trust to offer separate series of shares of beneficial
interest representing interests in separate portfolios of securities. The
shares in any one portfolio may be offered in two or more separate classes. As
of the date of this Prospectus, the Trustees have established two classes of
shares, known as Investment Shares and Trust Shares, in the Money Market Fund,
the Ohio Municipal Money Market Fund, the U.S. Treasury Money Market Fund, the
Growth Fund, the Mortgage Securities Fund, the Ohio Tax-Free Fund, and the
Fixed Income Securities Fund.

Investment Shares and Trust Shares of a Fund are fully transferable. Each
class is entitled to dividends from the respective class assets of the Fund as
declared by the Trustees, and, if the Trust (or the Fund) were liquidated, the
shareholders of each class would receive the net assets of the Fund
attributable to each respective class.

VOTING RIGHTS

As a Massachusetts business trust, the Trust is not required to hold annual
meetings of shareholders, but may hold special meetings from time to time.

As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding shares" of the Trust or a particular
Fund or a particular class of shares of the Trust or a Fund means the
affirmative vote of the lesser of (a) more than 50% of the outstanding shares
of the Trust or such Fund or such class, or (b) 67% or more of the shares of
the Trust or such Fund or such class present at a meeting at which the holders
of more than 50% of the outstanding shares of the Trust or such Fund or such
class are represented in person or by proxy.

PERFORMANCE DATA AND COMPARISONS

Yield and total return data for both classes of shares may, from time to
time, be included in advertisements about the Funds.

Yield, effective yield, tax-equivalent yield, and total return will be
calculated separately for Investment Shares and Trust Shares. Because
Investment Shares are subject to 12b-1 fees, the yield, effective yield, tax-
equivalent yield, and total return for Investment Shares will be lower than
that of Trust Shares for the same period. In addition, the sales load
applicable to Investment Shares of the Growth Fund, Mortgage Securities Fund,
Ohio Tax-Free Fund and Fixed Income Securities Fund also contributes to a
lower total return for such Funds' Investment Shares. The total return figures
quoted in advertisements will normally reflect the effect of the maximum sales
load. However, from time to time, these advertisements may include total
returns which do not reflect the effect of an applicable sales load.

From time to time, advertisements for a Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare a
Fund's performance to certain indices.

SHAREHOLDER INQUIRIES

Shareholder inquiries regarding the Funds should be directed to The
Huntington Investment Company, Huntington Center, 41 South High Street,
Columbus, Ohio 43287.

OTHER CLASSES OF SHARES

Certain of the Funds also offer another class of shares called Trust Shares.
Trust Shares are sold through procedures established by the Distributor in
connection with the requirements of fiduciary, advisory, agency, and other
similar accounts maintained by or on behalf of customers of The Huntington
Trust Company, N.A. or its affiliates or correspondent banks. Trust Shares are
sold at net asset value and are subject to a minimum initial investment of
$1,000.

Investment Shares and Trust Shares of any Fund are subject to certain of the
same expenses; however, Investment Shares are distributed under a Rule 12b-1
Plan pursuant to which the Distributor is paid a fee based upon a percentage
of the average daily net assets attributable to a Fund's Investment Shares.
Expense differences between a Fund's Investment Shares and Trust Shares may
affect the performance of each class.

Investors may obtain information about Trust Shares by contacting the Funds'
Distributor.

PENDING LEGAL PROCEEDINGS RELATING TO PIPER

APPENDIX I

A summary of those definitions follows.

ELIGIBLE SECURITIES are defined as those with a remaining maturity of 397 or
less days and which (i) have a short-term rating in one of the two highest
rating categories by an NRSRO (e.g. A-1/P-1 or A-2/P-2 by Standard & Poor's
and Moody's, respectively), (ii) securities that are comparable in priority
and security to other short-term debt of the issuer having a short-term rating
in one of the two highest rating categories or (iii) Unrated Securities that
are of comparable quality. A long-term security without a short-term rating
but with a long-term rating below the two highest rating categories (i.e., a
rating of A or below) is not an Eligible Security.

FIRST TIER SECURITY means any Eligible Security which has, or is comparable
to short-term debt of the issuer having, the highest short-term rating by any
two NRSROs that have issued a rating with respect to a security or class of
debt obligations of an issuer. If only one NRSRO has issued a rating with
respect to such security, it must be the highest short-term rating given by
such NRSRO.

SECOND TIER SECURITY means any Eligible Security that is not a First Tier
Security.

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INVESTMENT ADVISER
- -------------------------------------
The Huntington Trust Company, N.A.
Huntington Center
Columbus, OH 43287
1-800-253-0412

ADMINISTRATOR
- -------------------------------------
Federated Administrative Services
Federated Investors Tower
Pittsburgh, PA 15222-3779

DISTRIBUTOR
- -------------------------------------
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, PA 15222-3779

609409875 609409784
609409867 609409834
609409768 609409826
609409842 1032204A-R (4/95)

[LOGO] RECYCLED PAPER

[LOGO]
THE MONITOR FUNDS

Investment Shares

MONEY MARKET FUNDS
- -----------------------------
The Monitor Money Market Fund
The Monitor Ohio Municipal Money Market Fund
The Monitor U.S. Treasury Money Market Fund

EQUITY FUNDS
- -----------------------------
The Monitor Growth Fund

INCOME FUNDS
- -----------------------------
The Monitor Mortgage Securities Fund
The Monitor Ohio Tax-Free Fund
The Monitor Fixed Income Securities Fund

April 30, 1995

[LOGO]

The Monitor Funds
Investment Shares
Trust Shares
The Monitor Money Market Fund
The Monitor Ohio Municipal Money Market Fund
The Monitor U.S. Treasury Money Market Fund
The Monitor Growth Fund
The Monitor Income Equity Fund*
The Monitor Mortgage Securities Fund
The Monitor Ohio Tax-Free Fund
The Monitor Fixed Income Securities Fund
The Monitor Short/Intermediate Fixed Income Securities Fund*
*Trust Shares Only
Form N-1A
Part B
Combined Statement of Additional Information

This Statement of Additional Information contains information
which may be of interest to investors in The Monitor Funds (the
"Trust") but which is not included in the applicable Prospectuses
for Trust Shares or Investment Shares. This Statement is not a
prospectus and is only authorized for distribution when
accompanied or preceded by the respective Prospectus for Trust
Shares or Investment Shares of the Trust dated April 30, 1995.
This Statement should be read together with the applicable
Prospectus. Investors may obtain a free copy of a Prospectus by
calling the Mutual Fund Services Center: (in Ohio) 614/463-5580 or
(outside the 614 Area Code) 800/253-0412.
April 30, 1995

FEDERATED SECURITIES CORP.
Distributor
A subsidiary of
Federated Investors
Definitions 1
Investment Objectives and
Policies of the Trust 1
Foreign Securities 1
Shares of Other Mutual
Funds 1
Securities Loans 1
When-Issued and Delayed
Delivery Transactions 2
Ohio Tax-Exempt
Securities 2
Mortgage-Related
Securities 3
Options on Securities 4
Risk Factors in Options
Transactions 5
Futures Contracts 6
Special Risks of
Transactions in Futures
Contracts and Related
Options 9
Foreign Currency
Transactions 10
Zero-Coupon Securities 12
Investment Restrictions 13
Portfolio Turnover 14
Management of the Trust 15
Trustees and Officers 15
Fund Ownership 16
Trustees Compensation 17
Investment Adviser 18
Glass-Steagall Act 19
Portfolio Transactions 19
Brokerage and Research
Services 20
Administrator 20
Distributor 21
The Distribution Plans 21
Determination of Net Asset
Value 22
Additional Purchase
Information-Payment in Kind 23
Taxes 24
Federal Income Taxation 24
Dividends and Distributions 26
Performance Information 27
Money Market Funds 27
Other Funds 27
Tax-Equivalent Yield 29
Tax-Equivalency Table 29
Custodian 30
Transfer Agent and Dividend
Disbursing Agent 30
Independent Public
Accountants 30
Additional Information
About the Trust and Its
Shares 31
Shareholder Inquiries 31
Pending Litigation
Relating to Piper 31
Financial Statements 31
Appendix 32

Definitions
The "Trust" - The Monitor Funds.
"Huntington" - The Huntington Trust
Company, N.A., the Trust's
investment adviser.
"Federated" - Federated Administrative
Services, the Trust's
administrator.
"Federated Securities Corp." - Federated Securities
Corp., the Trust's
distributor.
The Trust consists of nine separate investment portfolios (the "Funds")
with separate investment objectives and policies. Seven of the Funds are
offered in two classes, Investment Shares and Trust Shares, and two of
the Funds offer only Trust Shares. The investment objectives and
policies of each of the Funds of the Trust are described in the
applicable Prospectuses for Trust Shares or Investment Shares. (The
Prospectus for Trust Shares and the Prospectus for Investment Shares may
be hereinafter referred to collectively as the "Prospectus.") This
Statement relates to both Trust Shares and Investment Shares. A Fund's
Trust Shares and Investment Shares may be hereinafter referred to
collectively as "shares". Capitalized terms used but not defined herein
have the meanings as set forth in the Prospectus.
Investment Objectives and Policies of the Trust
Except as described below under "Investment Restrictions" or as
otherwise indicated, the investment policies described in the Prospectus
and in this Statement are not fundamental.
The investment practices and techniques described below may be used by
certain of the Funds. See the Prospectus to determine whether a
particular Fund may engage in any such practice or technique.
Foreign Securities
Except as otherwise limited by a Fund's investment objective and
policies as described in the Prospectus, a Fund may invest in securities
principally traded in markets outside the United States. Foreign
investments can be affected favorably or unfavorably by changes in
currency rates and in exchange control regulations. There may be less
publicly available information about a foreign company than about a U.S.
company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements comparable
to those applicable to U.S. companies. Securities of some foreign
companies are less liquid or more volatile than securities of U.S.
companies, and foreign brokerage commissions and custodian fees are
generally higher than in the United States. Investments in foreign
securities can involve other risks different from those affecting U.S.
investments, including local political or economic developments,
expropriation or nationalization of assets and imposition of withholding
taxes on dividend or interest payments. Foreign securities, like other
assets of a Fund, will be held by the Trust's custodian or by a
subcustodian. For information regarding transactions relating to foreign
currency exchange rates, see "Foreign Currency Transactions" below.
Shares of Other Mutual Funds
Each of the Growth Fund, the Fixed Income Securities Fund, the Mortgage
Securities Fund, and the Short/ Intermediate Fixed Income Securities
Fund may invest up to 5% of its total assets in the shares of money
market mutual funds (other than the Trust's Money Market Funds) for
liquidity purposes. The Ohio Municipal Money Market Fund may also invest
up to 5% of its total assets in the shares of one or more tax-exempt
money market mutual funds for liquidity purposes. When a Fund invests in
the shares of other mutual funds, investment advisory and other fees
will apply, and the investment's yield will be reduced accordingly.
Under the Investment Company Act of 1940, a Fund may not invest more
than 5% of its total assets in the shares of any one mutual fund, nor
may a Fund own more than 3% of the shares of any one fund; in addition,
although each Fund intends to limit its investments in mutual funds to
no more than 5% of total assets, under the Investment Company Act of
1940, no more than 10% of a Fund's total assets may be invested at any
one time in the shares of other funds.
Securities Loans
In order to generate additional income, a Fund may make secured loans of
its portfolio securities amounting to not more than 20% of its total
assets. The risks in lending portfolio securities, as with other
extensions of credit, consist of possible delay in recovery of the
securities or possible loss of rights in the collateral should the
borrower fail financially. Securities loans may be made to brokers,
dealers or financial institutions pursuant to agreements requiring that
loans be continuously secured by collateral in cash or U.S. Government
obligations at least equal at all times to 102% of the value of the
securities on loan. The borrower pays to the Fund an amount equal to any
dividends or interest received on securities loaned. The Fund retains
all or a portion of the interest received on investment of the
collateral or receives a fee from the borrower. Although voting rights,
or rights to consent, with respect to the loaned securities pass to the
borrower, a Fund retains the right to call the loans at any time on
reasonable notice, and it will do so to enable a Fund to exercise voting
rights on any matters materially affecting the investment. A Fund may
also call such loans in order to sell the securities.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for a Fund. No fees or other expenses, other
than normal transaction costs, are incurred. However, liquid assets of a
Fund sufficient to make payment for the securities to be purchased are
segregated on the Fund's records at the trade date. These assets are
marked to market daily and are maintained until the transaction has been
settled. With the exception of the Mortgage Securities Fund, which may
invest a percentage of its total assets in securities purchased on a
when-issued or delayed delivery basis which is disclosed in the
Prospectus, a Fund does not intend to engage in when-issued and delayed
delivery transactions to an extent that would cause the segregation of
more than 20% of the total value of its assets.
Ohio Tax-Exempt Securities
As used in the Prospectus and this Statement, the term "Ohio tax-exempt
securities" refers to debt obligations which (i) are issued by or on
behalf of the State of Ohio or its respective authorities, agencies,
instrumentalities, and political subdivisions, and (ii) produce interest
which, in the opinion of bond counsel at the time of issuance, is exempt
from federal income tax and Ohio personal income taxes. Ohio tax-exempt
securities are issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as
bridges, highways, roads, schools, water and sewer works, and other
utilities. Other public purposes for which Ohio tax-exempt securities
may be issued include refunding outstanding obligations, obtaining funds
for general operating expenses and obtaining funds to lend to other
public institutions and facilities.
In addition, the Ohio Municipal Money Market Fund and the Ohio Tax-Free
Fund (the "Ohio Funds") may invest in certain debt obligations known as
"private activity bonds" (or "industrial development bonds" under prior
federal law) so long as, in the case of the Ohio Tax-Free Fund, the
interest therefrom is not treated as a preference item for purposes of
the federal alternative minimum tax. Private activity bonds and
industrial development bonds may be issued by or on behalf of public
authorities to obtain funds to provide certain privately owned or
operated facilities. The Ohio Funds may not be a desirable investment
for "substantial users" of facilities financed by private activity bonds
or industrial development bonds or for "related persons" of substantial
users, for whom dividends attributable to interest on such bonds may not
be tax exempt. Shareholders should consult their own tax adviser
regarding the potential effect on them (if any) of any investment in the
Ohio Funds.
The two principal classifications of Ohio tax-exempt securities are
general obligation securities and limited obligation (or revenue)
securities. General obligation securities are obligations involving the
credit of an issuer possessing taxing power and are payable from the
issuer's general unrestricted revenues and not from any particular fund
or source. The characteristics and method of enforcement of general
obligation securities vary according to the law applicable to the
particular issuer. Limited obligation securities are payable only from
the revenues derived from a particular facility or class of facilities
or, in some cases, from the proceeds of a special excise or other
specific revenue source. Private activity bonds and industrial
development bonds generally are revenue securities and thus not payable
from the unrestricted revenues of the issuer. The credit and quality of
such bonds is usually directly related to the credit of the private user
of the facilities. Payment of principal of and interest on industrial
development revenue bonds is the responsibility of the private user (and
any guarantor). The Ohio Funds may also invest in numerous types of
short-term tax-exempt instruments, which may be used to fund short-term
cash requirements such as interim financing in anticipation of tax
collections, revenue receipts or bond sales to finance various public
purposes.
Prices and yields on Ohio tax-exempt securities are dependent on a
variety of factors, including general money market conditions, the
financial condition of the issuer, general conditions in the market for
tax-exempt obligations, the size of a particular offering, the maturity
of the obligation and ratings of particular issues, and are subject to
change from time to time. Information about the financial condition of
an issuer of tax-exempt bonds or notes may not be as extensive as that
which is made available by corporations whose securities are publicly
traded.
The ratings of Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Ratings Group ("S&P") represent their opinions and are not
absolute standards of quality. Ohio tax-exempt securities with the same
maturity, interest rate and rating may have different yields while tax-
exempt obligations of the same maturity and interest rate with different
ratings may have the same yield.
Obligations of issuers of Ohio tax-exempt securities and notes are
subject to the provisions of bankruptcy, insolvency and other laws, such
as the Federal Bankruptcy Reform Act of 1978, affecting the rights and
remedies of creditors.
Congress or state legislatures may seek to extend the time for payment
of principal or interest, or both, or to impose other constraints upon
enforcement of such obligations. There is also the possibility that, as
a result of litigation or other conditions, the power or ability of
issuers to meet their obligations to pay interest on and principal of
their tax-exempt bonds or notes may be materially impaired or their
obligations may be found to be invalid or unenforceable. Such litigation
or conditions may from time to time have the effect of introducing
uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect
to particular bonds or notes. Adverse economic, business, legal or
political developments might affect all or a substantial portion of the
Ohio Funds' Ohio tax-exempt securities in the same manner.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
certain continuing requirements on issuers of tax-exempt bonds regarding
the use, expenditure and investment of bond proceeds and the payment of
rebates to the United States of America. Failure by the issuer to comply
subsequent to the issuance of tax-exempt bonds with certain of these
requirements could cause interest on the bonds to become includable in
gross income retroactive to the date of issuance.
The Ohio Funds may invest in Ohio tax-exempt securities either by
purchasing them directly or by purchasing certificates of accrual or
similar instruments evidencing direct ownership of interest payments or
principal payments, or both, on Ohio tax-exempt securities, provided
that, in the opinion of counsel to the initial seller of each such
certificate or instrument, any discount accruing on such certificate or
instrument that is purchased at a yield not greater than the coupon rate
of interest on the related Ohio tax-exempt securities will to the same
extent as interest on such Ohio tax-exempt securities be exempt from
federal regular income tax and Ohio personal income taxes and as to the
Ohio Tax-Free Fund not treated as a preference item for purposes of the
federal alternative minimum tax. The Ohio Funds may also invest in Ohio
tax-exempt securities by purchasing from banks participation interests
in all or part of specific holdings of Ohio tax-exempt securities. Such
participations may be backed in whole or in part by an irrevocable
letter of credit or guarantee of the selling bank. The selling bank may
receive a fee from the Ohio Funds in connection with the arrangement.
The Ohio Funds will not purchase participation interests unless it
receives an opinion of counsel or a ruling of the Internal Revenue
Service that interest earned by it on Ohio tax-exempt securities in
which it holds such participation interest is exempt from federal
regular income tax and Ohio personal income taxes and as to the Ohio Tax-
Free Fund not treated as a preference item for purposes of the federal
alternative minimum tax.
Risk considerations
Since the Ohio Funds invest primarily in Ohio tax-exempt
securities, the value of the Funds' shares may be especially
affected by factors pertaining to the economy of Ohio and other
factors specifically affecting the ability of issuers of Ohio tax-
exempt securities to meet their obligations. As a result, the
value of the Funds' shares may fluctuate more widely than the
value of shares of a fund investing in securities relating to a
number of different states. The ability of Ohio state, county, or
local governments to meet their obligations will depend primarily
on the availability of tax and other revenues to those governments
and on their fiscal conditions generally. The amounts of tax and
other revenues available to issuers of Ohio tax-exempt securities
may be affected from time to time by economic, political and
demographic conditions within the State. In addition,
constitutional or statutory restrictions may limit a government's
power to raise revenues or increase taxes. The availability of
federal, state, and local aid to issuers of Ohio tax-exempt
securities may also affect their ability to meet their
obligations. Payments of principal and interest on limited
obligation securities will depend on the economic condition of the
facility or specific revenue source from whose revenues the
payments will be made, which in turn could be affected by
economic, political, and demographic conditions in the State. Any
reduction in the actual or perceived ability to meet obligations
on the part of either an issuer of an Ohio tax-exempt security or
a provider of credit enhancement for such security (including a
reduction in the rating of its outstanding securities) would
likely affect adversely the market value and marketability of that
Ohio tax-exempt security and could affect adversely the values of
other Ohio tax-exempt securities as well.
Mortgage-Related Securities
A Fund may invest in mortgage-related securities issued by the
Government National Mortgage Association ("GNMA") representing GNMA
Mortgage Pass-Through Certificates (also known as "Ginnie Maes"), in
other mortgage-related securities issued or guaranteed by the U.S.
Government, its agencies, or its instrumentalities or those issued by
nongovernmental entities, and in collateralized mortgage obligations.
Mortgage-related securities represent pools of mortgage loans assembled
for sale to investors by various governmental agencies such as the GNMA
or by government-related organizations such as the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation.
Mortgage-related securities may also be assembled and sold by
nongovernment entities such as commercial banks, savings and loan
institutions, mortgage bankers, and private mortgage insurance
companies. Although certain mortgage-related securities are guaranteed
by a third party or otherwise similarly secured, the market value of the
security, which may fluctuate, is not so secured. If a Fund purchases a
mortgage-related security at a premium, that portion may be lost if
there is a decline in the market value of the security whether resulting
from changes in interest rates or prepayments in the underlying mortgage
collateral. As with other interest-bearing securities, the prices of
mortgage-related securities are inversely affected by changes in
interest rates. However, though the value of a mortgage-related security
may decline when interest rates rise, the converse is not necessarily
true, since in periods of declining interest rates the mortgages
underlying the security are prone to prepayment. For this and other
reasons, a mortgage-related security's effective maturity may be
shortened by unscheduled prepayments on the underlying mortgages and,
therefore, it is not possible to predict accurately the security's
return to the Fund. In addition, regular payments received in respect of
mortgage-related securities include both interest and principal. No
assurance can be given as to the return a Fund will receive when these
amounts are reinvested.
There are a number of important differences both among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related
securities and among the securities themselves. As noted above, Ginnie
Maes are issued by GNMA, which is a wholly-owned U.S. Government
corporation within the Department of Housing and Urban Development.
Ginnie Maes are guaranteed as to the timely payment of principal and
interest by GNMA and GNMA's guarantee is backed by the full faith and
credit of the U.S. Treasury. In addition, Ginnie Maes are supported by
the authority of GNMA to borrow funds from the U.S. Treasury to make
payments under GNMA's guarantee. Mortgage-related securities issued by
the Federal National Mortgage Association ("FNMA") include FNMA
Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie
Maes") which are solely the obligations of the FNMA. The FNMA is a
government-sponsored organization owned entirely by private
stockholders. Fannie Maes are guaranteed as to timely payment of
principal and interest by FNMA but are not backed by or entitled to the
full faith and credit of the U.S. Treasury. Mortgage-related securities
issued by the Federal Home Loan Mortgage Corporation ("FHLMC") include
FHLMC Mortgage Participation Certificates (also known as "Freddie Macs"
or "PCs"). The FHLMC is a corporate instrumentality of the U.S.
Government, created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks. Freddie Macs are not guaranteed by
the U.S. Treasury or by any Federal Home Loan Banks and do not
constitute a debt or obligation of the U.S. Government or of any Federal
Home Loan Bank. Freddie Macs entitle the holder to timely payment of
interest, which is guaranteed by the FHLMC. The FHLMC guarantees either
ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When the FHLMC does not guarantee timely
payment of principal, FHLMC may remit the amount due on account of its
guarantee of ultimate payment of principal at any time after default on
an underlying mortgage, but in no event later than one year after it
becomes payable.
Options on Securities
Writing covered options
A Fund may write covered call options and covered put options on
optionable securities held in its portfolio, when in the opinion
of Huntington such transactions are consistent with the Fund's
investment objectives and policies. Call options written by a Fund
give the purchaser the right to buy the underlying securities from
the Fund at a stated exercise price; put options give the
purchaser the right to sell the underlying securities to the Fund
at a stated price.
A Fund may write only covered options, which means that, so long
as the Fund is obligated as the writer of a call option, it will
own the underlying securities subject to the option (or comparable
securities satisfying the cover requirements of securities
exchanges). In the case of put options, a Fund will hold cash
and/or high-grade short-term debt obligations equal to the price
to be paid if the option is exercised. In addition, a Fund will be
considered to have covered a put or call option if and to the
extent that it holds an option that offsets some or all of the
risk of the option it has written. A Fund may write combinations
of covered puts and calls on the same underlying security.
A Fund will receive a premium from writing a put or call option,
which increases the Fund's return on the underlying security in
the event that option expires unexercised or is closed out at a
profit. The amount of the premium reflects, among other things,
the relationship between the exercise price and the current market
value of the underlying security, the volatility of the underlying
security, the amount of time remaining until expiration, current
interest rates, and the effect of supply and demand in the options
market and in the market for the underlying security. By writing a
call option, a Fund limits its opportunity to profit from any
increase in the market value of the underlying security above the
exercise price of the option but continues to bear the risk of a
decline in the value of the underlying security. By writing a put
option, a Fund assumes the risk that it may be required to
purchase the underlying security for an exercise price higher than
its then-current market value, resulting in a potential capital
loss unless the security substantially appreciates in value.
A Fund may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction, in
which it purchases an offsetting option. A Fund realizes a profit
or loss from a closing transaction if the cost of the transaction
(option premium plus transaction costs) is less or more than the
premium received from writing the option. Because increases in the
market price of a call option generally reflect increases in the
market price of the security underlying the option, any loss
resulting from a closing purchase transaction may be offset in
whole or in part by unrealized appreciation of the underlying
security owned by a Fund.
Purchasing put options
A Fund may purchase put options to protect its portfolio holdings
in an underlying security against a decline in market value. Such
protection is provided during the life of the put option since the
Fund, as holder of the option, is able to sell the underlying
security at the option's exercise price regardless of any decline
in the underlying security's market price. In order for a put
option to be profitable, the market price of the underlying
security must decline sufficiently below the exercise price to
cover the premium and transaction costs. By using put options in
this manner a Fund will reduce any profit it might otherwise have
realized from appreciation of the underlying security by the
premium paid for the put option and by transaction costs.
Purchasing call options
A Fund may purchase call options to hedge against an increase in
the price of securities that the Fund wants ultimately to buy.
Such hedge protection is provided during the life of the call
option since the Fund, as holder of the call option, is able to
buy the underlying security at the exercise price regardless of
any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the
underlying security must rise sufficiently above the exercise
price to cover the premium and transaction costs.
Risk Factors in Options Transactions
The successful use of a Fund's options strategies depends on the ability
of Huntington to forecast interest rate and market movements. For
example, if a Fund were to write a call option based on Huntington's
expectation that the price of the underlying security would fall, but
the price were to rise instead, the Fund could be required to sell the
security upon exercise at a price below the current market price.
Similarly, if a Fund were to write a put option based on Huntington's
expectations that the price of the underlying security would rise, but
the price were to fall instead, the Fund could be required to purchase
the security upon exercise at a price higher than the current market
price.
When it purchases an option, a Fund runs the risk that it will lose its
entire investment in the option in a relatively short period of time,
unless the Fund exercises the option or enters into a closing sale
transaction with respect to the option during the life of the option. If
the price of the underlying security does not rise (in the case of a
call) or fall (in the case of a put) to an extent sufficient to cover
the option premium and transaction costs, a Fund will lose part or all
of its investment in the option. This contrasts with an investment by a
Fund in the underlying security, since the Fund will not lose any of its
investment in such security if the price does not change.
The effective use of options also depends on the Fund's ability to
terminate option positions at times when Huntington deems it desirable
to do so. Although a Fund will take an option position only if
Huntington believes there is a liquid secondary market for the option,
there is no assurance that the Fund will be able to effect closing
transactions at any particular time or at an acceptable price.
If a secondary trading market in options were to become unavailable, a
Fund could no longer engage in closing transactions. Lack of investor
interest might adversely affect the liquidity of the market for
particular options or series of options. A market may discontinue
trading of a particular option or options generally. In addition, a
market could become temporarily unavailable if unusual events-such as
volume in excess of trading or clearing capability-were to interrupt its
normal operations.
A market may at times find it necessary to impose restrictions on
particular types of options transactions, such as opening transactions.
For example, if an underlying security ceases to meet qualifications
imposed by the market or the Options Clearing Corporation, new series of
options on that security will no longer be opened to replace expiring
series, and opening transactions in existing series may be prohibited.
If an options market were to become unavailable, a Fund as a holder of
an option would be able to realize profits or limit losses only by
exercising the option, and the Fund, as option writer, would remain
obligated under the option until expiration.
Disruptions in the markets for the securities underlying options
purchased or sold by a Fund could result in losses on the options. If
trading is interrupted in an underlying security, the trading of options
on that security is normally halted as well. As a result, a Fund as
purchaser or writer of an option will be unable to close out its
positions until options trading resumes, and it may be faced with
considerable losses if trading in the security reopens at a
substantially different price. In addition, the Options Clearing
Corporation or other options markets may impose exercise restrictions.
If a prohibition on exercise is imposed at the time when trading in the
option has also been halted, a Fund as a purchaser or writer of an
option will be locked into its position until one of the two
restrictions has been lifted. If the Options Clearing Corporation were
to determine that the available supply of an underlying security appears
insufficient to permit delivery by the writers of all outstanding calls
in the event of exercise, it may prohibit indefinitely the exercise of
put options by holders who would be unable to deliver the underlying
interest. A Fund, as holder of such a put option, could lose its entire
investment if the prohibition remained in effect until the put option's
expiration and the Fund was unable either to acquire the underlying
security or to sell the put option in the market.
Special risks are presented by internationally-traded options. Because
of time differences between the United States and various foreign
countries, and because different holidays are observed in different
countries, foreign options markets may be open for trading during hours
or on days when U.S. markets are closed. As a result, option premium may
not reflect the current prices of the underlying interest in the United
States.
Risks involved in the sale of options
Options transactions involve certain risks, including the risks
that Huntington will not forecast interest rate or market
movements correctly, that a Fund may be unable at times to close
out such positions, or that hedging transactions may not
accomplish their purpose because of imperfect market correlations.
The successful use of these strategies depends on the ability of
Huntington to forecast market and interest rate movements
correctly.
An exchange-listed option may be closed out only on an exchange
which provides a secondary market for an option of the same
series. There is no assurance that a liquid secondary market on an
exchange will exist for any particular option or at any particular
time. If no secondary market were to exist, it would be impossible
to enter into a closing transaction to close out an option
position. As a result, a Fund may be forced to continue to hold,
or to purchase at a fixed price, a security on which it has sold
an option at a time when Huntington believes it is inadvisable to
do so.
Higher than anticipated trading activity or order flow or other
unforeseen events might cause the Options Clearing Corporation or
an exchange to institute special trading procedures or
restrictions that might restrict a Fund's use of options. The
exchanges have established limitations on the maximum number of
calls and puts of each class that may be held or written by an
investor or group of investors acting in concert. It is possible
that the Trust and other clients of Huntington may be considered
such a group. These position limits may restrict the Trust's
ability to purchase or sell options on particular securities.
Options which are not traded on national securities exchanges may
be closed out only with the other party to the option transaction.
For that reason, it may be more difficult to close out unlisted
options than listed options. Furthermore, unlisted options are not
subject to the protection afforded purchasers of listed options by
the Options Clearing Corporation.
Futures Contracts
Futures on debt securities and related options
A futures contract on a debt security is a binding contractual
commitment which, if held to maturity, will result in an
obligation to make or accept delivery, during a particular month,
of securities having a standardized face value and rate of return.
By purchasing futures on debt securities-assuming a "long"
position-a Fund will legally obligate itself to accept the future
delivery of the underlying security and pay the agreed price. By
selling futures on debt securities-assuming a "short" position-it
will legally obligate itself to make the future delivery of the
security against payment of the agreed price. Open futures
positions on debt securities will be valued at the most recent
settlement price, unless that price does not in the judgment of
the Trustees reflect the fair value of the contract, in which case
the positions will be valued by or under the direction of the
Trustees. Positions taken in the futures markets are not normally
held to maturity, but are instead liquidated through offsetting
transactions which may result in a profit or a loss. While futures
positions taken by a Fund will usually be liquidated in this
manner, a Fund may instead make or take delivery of the underlying
securities whenever it appears economically advantageous to the
Fund to do so. A clearing corporation associated with the exchange
on which futures are traded assumes responsibility for such
closing transactions and guarantees that the Fund's sale and
purchase obligations under closed-out positions will be performed
at the termination of the contract.
Hedging by use of futures on debt securities seeks to establish
more certainly than would otherwise be possible the effective rate
of return on portfolio securities. A Fund may, for example, take a
"short" position in the futures market by selling contracts for
the future delivery of debt securities held by the Fund (or
securities having characteristics similar to those held by the
Fund) in order to hedge against an anticipated rise in interest
rates that would adversely affect the value of the Fund's
portfolio securities. When hedging of this character is
successful, any depreciation in the value of portfolio securities
may be offset by appreciation in the value of the futures
position.
On other occasions, a Fund may take a "long" position by
purchasing futures on debt securities. This would be done, for
example, when Huntington expects to purchase for a Fund particular
securities when it has the necessary cash, but expects the rate of
return available in the securities markets at that time to be less
favorable than rates currently available in the futures markets.
If the anticipated rise in the price of the securities should
occur (with its concomitant reduction in yield), the increased
cost to the Fund of purchasing the securities may be offset by the
rise in the value of the futures position taken in anticipation of
the subsequent securities purchase.
Successful use by a Fund of futures contracts on debt securities
is subject to Huntington's ability to predict correctly movements
in the direction of interest rates and other factors affecting
markets for debt securities. For example, if a Fund has hedged
against the possibility of an increase in interest rates which
would adversely affect the market prices of debt securities held
by it and the prices of such securities increase instead, the Fund
will lose part or all of the benefit of the increased value of its
securities which it has hedged because it will have offsetting
losses in its futures positions. In addition, in such situations,
if the Fund has insufficient cash, it may have to sell securities
to meet daily margin maintenance requirements. A Fund may have to
sell securities at a time when it may be disadvantageous to do so.
A Fund may purchase and write put and call options on debt futures
contracts, as they become available. Such options are similar to
options on securities except that options on futures contracts
give the purchaser the right, in return for the premium paid, to
assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put) at a
specified exercise price at any time during the period of the
option. As with options on securities, the holder or writer of an
option may terminate its position by selling or purchasing an
option of the same series. There is no guarantee that such closing
transactions can be effected. A Fund will be required to deposit
initial margin and variation margin with respect to put and call
options on futures contracts written by it pursuant to brokers'
requirements, and, in addition, net option premiums received will
be included as initial margin deposits. See "Margin Payments"
below. Compared to the purchase or sale of futures contracts, the
purchase of call or put options on futures contracts involves less
potential risk to a Fund because the maximum amount at risk is the
premium paid for the options plus transactions costs. However,
there may be circumstances when the purchases of call or put
options on a futures contract would result in a loss to a Fund
when the purchase or sale of the futures contracts would not, such
as when there is no movement in the prices of debt securities. The
writing of a put or call option on a futures contract involves
risks similar to those risks relating to the purchase or sale of
futures contracts.
U.S. Treasury security futures contracts and options
If a Fund invests in tax-exempt securities issued by a
governmental entity, the Fund may purchase and sell futures
contracts and related options on U.S. Treasury securities when, in
the opinion of Huntington, price movements in Treasury security
futures and related options will correlate closely with price
movements in the tax-exempt securities which are the subject of
the hedge. U.S. Treasury security futures contracts require the
seller to deliver, or the purchaser to take delivery of, the type
of U.S. Treasury security called for in the contract at a
specified date and price. Options on U.S. Treasury securities
futures contracts give the purchaser the right in return for the
premium paid to assume a position in a U.S. Treasury security
futures contract at the specified option exercise price at anytime
during the period of the option. Successful use of U.S. Treasury
security futures contracts by a Fund is subject to Huntington's
ability to predict movements in the direction of interest rates
and other factors affecting markets for debt securities. For
example, if a Fund has sold U.S. Treasury security futures
contracts in order to hedge against the possibility of an increase
in interest rates which would adversely affect tax-exempt
securities held in its portfolio, and the prices of the Fund's tax-
exempt securities increase instead as a result of a decline in
interest rates, the Fund will lose part or all of the benefit of
the increased value of its securities which it has hedged because
it will have offsetting losses in its futures positions. In
addition, in such situations, if the Fund has insufficient cash,
it may have to sell securities to meet daily maintenance margin
requirements at a time when it may be disadvantageous to do so.
There is also a risk that price movements in U.S. Treasury
security futures contracts and related options will not correlate
closely with price movements in markets for tax-exempt securities.
For example, if a Fund has hedged against a decline in the values
of tax-exempt securities held by it by selling Treasury securities
futures and the values of Treasury securities subsequently
increase while the values of its tax-exempt securities decrease,
the Fund would incur losses on both the Treasury security futures
contracts written by it and the tax-exempt securities held in its
portfolio. Huntington will seek to reduce this risk by monitoring
movements in markets for U.S. Treasury security futures and
options and for tax-exempt securities closely. A Fund will only
purchase or sell Treasury security futures or related options
when, in the opinion of Huntington, price movements in Treasury
security futures and related options will correlate closely with
price movements in tax-exempt securities in which the Fund
invests.
Index futures contracts and options
A Fund may invest in debt index futures contracts and stock index
futures contracts, and in related options. A debt index futures
contract is a contract to buy or sell units of a specified debt
index at a specified future date at a price agreed upon when the
contract is made. A unit is the current value of the index. A
stock index futures contract is a contract to buy or sell units of
a stock index at a specified future date at a price agreed upon
when the contract is made. A unit is the current value of the
stock index.
The following example illustrates generally the manner in which
index futures contracts operate. The Standard & Poor's 100 Stock
Index is composed of 100 selected common stocks, most of which are
listed on the New York Stock Exchange. The S&P 100 Index assigns
relative weightings to the common stocks included in the Index,
and the Index fluctuates with changes in the market values of
those common stocks. In the case of the S&P 100 Index, contracts
are to buy or sell 100 units. Thus, if the value of the S&P 100
Index were $180, one contract would be worth $18,000 (100 units X
$180). The stock index futures contract specifies that no delivery
of the actual stocks making up the index will take place. Instead,
settlement in cash must occur upon the termination of the
contract, with the settlement being the difference between the
contract price and the actual level of the stock index at the
expiration of the contract. For example, if a Fund enters into a
futures contract to buy 100 units of the S&P 100 Index at a
specified future date at a contract price of $180 and the S&P 100
Index is at $184 on that future date, the Fund will gain $400 (100
units X gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a
contract price of $180 and the S&P 100 Index is at $182 on that
future date, the Fund will lose $200 (100 units X loss of $2). A
Fund may purchase or sell futures contracts with respect to any
stock index. Positions in index futures may be closed out only on
an exchange or board of trade which provides a secondary market
for such futures.
A Fund will purchase and sell index futures in order to hedge its
investments. To hedge its investments successfully, however, a
Fund must invest in futures contracts with respect to indexes or
sub-indexes the movements of which will, in its judgment, have a
significant correlation with movements in the prices of the Fund's
securities.
Options on index futures contracts are similar to options on
securities except that options on index futures contracts give the
purchaser the right, in return for the premium paid, to assume a
position in an index futures contract (a long position if the
option is a call and a short position if the option is a put) at a
specified exercise price at any time during the period of the
option. Upon exercise of the option, the holder would assume the
underlying futures position and would receive a variation margin
payment of cash or securities approximating the increase in the
value of the holder's option position. If an option is exercised
on the last trading day prior to the expiration date of the
option, the settlement will be made entirely in cash based on the
difference between the exercise price of the option and the
closing level of the index on which the futures contract is based
on the expiration date. Purchasers of options who fail to exercise
their options prior to the exercise date suffer a loss of the
premium paid.
As an alternative to purchasing call and put options on index
futures contracts, a Fund may purchase call and put options on the
underlying indexes themselves to the extent that such options are
traded on national securities exchanges. Index options are similar
to options on individual securities in that the purchaser of an
index option acquires the right to buy, and the writer undertakes
the obligation to sell, an index at a stated exercise price during
the term of the option. Instead of giving the right to take or
make actual delivery of securities, the holder of an index option
has the right to receive a cash "exercise settlement amount". This
amount is equal to the amount by which the fixed exercise price of
the option exceeds (in the case of a put) or is less than (in the
case of a call) the closing value of the underlying index on the
date of the exercise, multiplied by a fixed "index multiplier".
Margin payments
When a Fund purchases or sells a futures contract, it is required
to deposit with its custodian an amount of cash, U.S. Treasury
bills, or other permissible collateral equal to a small percentage
of the amount of the futures contract. This amount is known as
"initial margin". The nature of initial margin is different from
that of margin in security transactions in that it does not
involve borrowing money to finance transactions. Rather, initial
margin is similar to a performance bond or good faith deposit that
is returned to the Fund upon termination of the contract, assuming
the Fund satisfies its contractual obligations. Subsequent
payments to and from the broker occur on a daily basis in a
process known as "marking to market". These payments are called
"variation margin" and are made as the value of the underlying
futures contract fluctuates. For example, when a Fund sells a
futures contract and the price of the underlying debt security
rises above the delivery price, the Fund's position declines in
value. The Fund then pays the broker a variation margin payment
equal to the difference between the delivery price of the futures
contract and the market price of the securities underlying the
futures contract. Conversely, if the price of the underlying
security falls below the delivery price of the contract, the
Fund's futures position increases in value. The broker then must
make a variation margin payment equal to the difference between
the delivery price of the futures contract and the market price of
the securities underlying the futures contract.
When a Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid
by or to the Fund, and the Fund realizes a loss or a gain. Such
closing transactions involve additional commission costs.
Special Risks of Transactions in Futures Contracts and Related Options
Liquidity risks
Positions in futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market for
such futures. Although the Trust intends to purchase or sell
futures only on exchanges or boards of trade where there appears
to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange or board of trade will
exist for any particular contract or at any particular time. If
there is not a liquid secondary market at a particular time, it
may not be possible to close a futures position at such time and,
in the event of adverse price movements, a Fund would continue to
be required to make daily cash payments of variation margin.
However, in the event financial futures are used to hedge
portfolio securities, such securities will not generally be sold
until the financial futures can be terminated. In such
circumstances, an increase in the price of the portfolio
securities, if any, may partially or completely offset losses on
the financial futures.
In addition to the risks that apply to all options transactions,
there are several special risks relating to options on futures
contracts. The ability to establish and close out positions in
such options will be subject to the development and maintenance of
a liquid secondary market. It is not certain that such a market
will develop. Although a Fund generally will purchase only those
options for which there appears to be an active secondary market,
there is no assurance that a liquid secondary market on an
exchange will exist for any particular option or at any particular
time. In the event no such market exists for particular options,
it might not be possible to effect closing transactions in such
options, with the result that the Fund would have to exercise the
options in order to realize any profit.
Hedging risks
There are several risks in connection with the use by a Fund of
futures contracts and related options as a hedging device. One
risk arises because of the imperfect correlation between movements
in the prices of the futures contracts and options and movements
in the prices of securities which are the subject of the hedge.
Huntington will, however, attempt to reduce this risk by
purchasing and selling, to the extent possible, futures contracts
and related options on securities and indexes the movements of
which will, in its judgment, correlate closely with movements in
the prices of the portfolio securities sought to be hedged.
Successful use of futures contracts and options by a Fund for
hedging purposes is also subject to Huntington's ability to
predict correctly movements in the direction of the market. It is
possible that, where a Fund has purchased puts on futures
contracts to hedge its portfolio against a decline in the market,
the securities or index on which the puts are purchased may
increase in value and the value of securities held in the
portfolio may decline. If this occurred, the Fund would lose money
on the puts and also experience a decline in value in its
portfolio securities. In addition, the prices of futures, for a
number of reasons, may not correlate perfectly with movements in
the underlying securities or index due to certain market
distortions. First, all participants in the futures market are
subject to margin deposit requirements. Such requirements may
cause investors to close futures contracts through offsetting
transactions which could distort the normal relationship between
the underlying security or index and futures markets. Second, the
margin requirements in the futures markets are less onerous than
margin requirements in the securities markets in general, and as a
result the futures markets may attract more speculators than the
securities markets do. Increased participation by speculators in
the futures markets may also cause temporary price distortions.
Due to the possibility of price distortion, even a correct
forecast of general market trends by Huntington may still not
result in a successful hedging transaction over a very short time
period.
Other risks
Funds will incur brokerage fees in connection with their futures
and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain
risks, those transactions themselves entail certain other risks.
Thus, while a Fund may benefit from the use of futures and related
options, unanticipated changes in interest rates or stock price
movements may result in a poorer overall performance for the Fund
than if it had not entered into any futures contracts or options
transactions. Moreover, in the event of an imperfect correlation
between the futures position and the portfolio position which is
intended to be protected, the desired protection may not be
obtained and the Fund may be exposed to risk of loss.
Foreign Currency Transactions
A Fund may engage in currency exchange transactions to protect against
uncertainty in the level of future foreign currency exchange rates and
to increase current return. A Fund may engage in both "transaction
hedging" and "position hedging".
When it engages in transaction hedging, a Fund enters into foreign
currency transactions with respect to specific receivables or payables
generally arising in connection with the purchase or sale of its
portfolio securities. A Fund will engage in transaction hedging when it
desires to "lock in" the U.S. dollar price of a security it has agreed
to purchase or sell, or the U.S. dollar equivalent of a dividend or
interest payment in a foreign currency. By transaction hedging a Fund
will attempt to protect against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and the
applicable foreign currency during the period between the date on which
the security is purchased or sold or on which the dividend or interest
payment is declared, and the date on which such payments are made or
received.
A Fund may purchase or sell a foreign currency on a spot (or cash) basis
at the prevailing spot rate in connection with transaction hedging. A
Fund may also enter into contracts to purchase or sell foreign
currencies at a future date ("forward contracts") and purchase and sell
foreign currency futures contracts. For transaction hedging purposes a
Fund may also purchase exchange-listed and over-the-counter call and put
options on foreign currency futures contracts and on foreign currencies.
A put option on a futures contract gives a Fund the right to assume a
short position in the futures contract until expiration of the option. A
put option on currency gives a Fund the right to sell a currency at an
exercise price until the expiration of the option. A call option on a
futures contract gives a Fund the right to assume a long position in the
futures contract until the expiration of the option. A call option on
currency gives a Fund the right to purchase a currency at the exercise
price until the expiration of the option.
When it engages in position hedging, a Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the
foreign currencies in which securities held by it are denominated or are
quoted in their principle trading markets or an increase in the value of
currency for securities which the Fund expects to purchase. In
connection with position hedging, a Fund may purchase put or call
options on foreign currency and foreign currency futures contracts and
buy or sell forward contracts and foreign currency futures contracts.
The Trust may also purchase or sell foreign currency on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in
foreign currencies will change as a consequence of market movements in
the values of those securities between the dates the currency exchange
transactions are entered into and the dates they mature.
It is impossible to forecast with precision the market value of a Fund's
portfolio securities at the expiration or maturity of a forward or
futures contract. Accordingly, it may be necessary for a Fund to
purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security or
securities being hedged is less than the amount of foreign currency the
Fund is obligated to deliver and if a decision is made to sell the
security or securities and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security or
securities of a Fund if the market value of such security or securities
exceeds the amount of foreign currency the Fund is obligated to deliver.
To offset some of the costs of hedging against fluctuations in currency
exchange rates, a Fund may write covered call options on those
currencies. Transaction and position hedging do not eliminate
fluctuations in the underlying prices of the securities which a Fund
owns or intends to purchase or sell. They simply establish a rate of
exchange which one can achieve at some future point in time.
Additionally, although these techniques tend to minimize the risk of
loss due to a decline in the value of the hedged currency, they tend to
limit any potential gain which might result from the increase in the
value of such currency.
A Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, and by purchasing and selling
options on foreign currencies and on foreign currency futures contracts,
and by purchasing and selling foreign currency forward contracts.
Forward foreign currency exchange contracts and foreign currency
futures contracts
A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of
the contract. In the case of a cancelable forward contract, the
holder has the unilateral right to cancel the contract at maturity
by paying a specified fee. The contracts are traded in the
interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions
are charged at any stage for trades. A foreign currency futures
contract is a standardized contract for the future delivery of a
specified amount of a foreign currency at a future date at a price
set at the time of the contract. Foreign currency futures
contracts traded in the United States are designed by and traded
on exchanges regulated by the Commodity Futures Trading Commission
(the "CFTC"), such as the New York Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the
maturity date of a forward contract may be any fixed number of
days from the date of the contract agreed upon by the parties,
rather than a predetermined date in a given month. Forward
contracts may be in any amounts agreed upon by the parties rather
than predetermined amounts. Also, forward foreign exchange
contracts are traded directly between currency traders so that no
intermediary is required. A forward contract generally requires no
margin or other deposit.
At the maturity of a forward or futures contract, a Fund may
either accept or make delivery of the currency specified in the
contract, or at or prior to maturity enter into a closing
transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts
are usually effected with the currency trader who is a party to
the original forward contract. Closing transactions with respect
to futures contracts are effected on a commodities exchange; a
clearing corporation associated with the exchange assumes
responsibility for closing out such contracts.
Positions in foreign currency futures contracts and related
options may be closed out only on an exchange or board of trade
which provides a secondary market in such contracts or options.
Although it is intended that a Fund will purchase or sell foreign
currency futures contracts and related options only on exchanges
or boards of trade where there appears to be an active secondary
market, there is no assurance that a secondary market on an
exchange or board of trade will exist for any particular contract
or option or at any particular time. In such event, it may not be
possible to close a futures or related option position and, in the
event of adverse price movements, a Fund would continue to be
required to make daily cash payments of variation margin on its
futures positions.
Foreign currency options
Options on foreign currencies operate similarly to options on
securities, and are traded primarily in the over-the-counter
market, although options on foreign currencies have recently been
listed on several exchanges. Such options will be purchased or
written only when Huntington believes that a liquid secondary
market exists for such options. There can be no assurance that a
liquid secondary market will exist for a particular option at any
specific time. Options on foreign currencies are affected by all
of those factors which influence exchange rates and investments
generally.
The value of a foreign currency option is dependent upon the value
of the foreign currency and the U.S. dollar, and may have no
relationship to the investment merits of a foreign security.
Because foreign currency transactions occurring in the interbank
market involve substantially larger amounts than those that may be
involved in the use of foreign currency options, investors may be
disadvantaged by having to deal in an odd lot market (generally
consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable
than for round lots.
There is no systematic reporting of last sale information for
foreign currencies and there is no regulatory requirement that
quotations available through dealers or other market sources be
firm or revised on a timely basis. Available quotation information
is generally representative of very large transactions in the
interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less
favorable. The interbank market in foreign currencies is a global,
around-the-clock market. To the extent that the U.S. options
markets are closed while the markets for the underlying currencies
remain open, significant price and rate movements may take place
in the underlying markets that cannot be reflected in the U.S.
options markets.
Foreign currency conversion
Although foreign exchange dealers do not charge a fee for currency
conversion, they do realize a profit based on the difference (the
"spread") between prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to
a Fund at one rate, while offering a lesser rate of exchange
should a Fund desire to resell that currency to the dealer.
Zero-Coupon Securities
Zero-coupon securities in which a Fund may invest are debt obligations
which are generally issued at a discount and payable in full at
maturity, and which do not provide for current payments of interest
prior to maturity. Zero-coupon securities usually trade at a deep
discount from their face or par value and are subject to greater market
value fluctuations from changing interest rates than debt obligations of
comparable maturities which make current distributions of interest. As a
result, the net asset value of shares of a Fund investing in zero-coupon
securities may fluctuate over a greater range than shares of other Funds
and other mutual funds investing in securities making current
distributions of interest and having similar maturities.
Zero-coupon securities may include U.S. Treasury bills issued directly
by the U.S. Treasury or other short-term debt obligations, and longer-
term bonds or notes and their unmatured interest coupons which have been
separated by their holder, typically a custodian bank or investment
brokerage firm. A number of securities firms and banks have stripped the
interest coupons from the underlying principal (the "corpus") of U.S.
Treasury securities and resold them in custodial receipt programs with a
number of different names, including Treasury Income Growth Receipts
("TIGRS") and Certificates of Accrual on Treasuries ("CATS"). The
underlying U.S. Treasury bonds and notes themselves are held in book-
entry form at the Federal Reserve Bank or, in the case of bearer
securities (i.e., unregistered securities which are owned ostensibly by
the bearer or holder thereof), in trust on behalf of the owners thereof.
In addition, the U.S. Treasury has facilitated transfers of ownership of
zero-coupon securities by accounting separately for the beneficial
ownership of particular interest coupons and corpus payments on U.S.
Treasury securities through the Federal Reserve book-entry record-
keeping system. The Federal Reserve program, as established by the U.S.
Treasury Department, is known as "STRIPS" or "Separate Trading of
Registered Interest and Principal of Securities." Under the STRIPS
program, a Fund will be able to have its beneficial ownership of U.S.
Treasury zero-coupon securities recorded directly in the book-entry
record-keeping system in lieu of having to hold certificates or other
evidence of ownership of the underlying U.S. Treasury securities. When
debt obligations have been stripped of their unmatured interest coupons
by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the
right to receive a future fixed payment on the security and does not
receive any rights to periodic cash interest payments. Once stripped or
separated, the corpus and coupons may be sold separately. Typically, the
coupons are sold separately or grouped with other coupons with like
maturity dates and sold in such bundled form. Purchasers of stripped
obligations acquire, in effect, discount obligations that are
economically identical to the zero-coupon securities issued directly by
the obligor.
Investment Restrictions
Without a vote of a majority of the outstanding shares of a Fund, the
Trust shall not take any of the following actions with respect to such
Fund:
(1) Except for the Ohio Funds, invest more than 5% of the value of its
total assets in the securities of any one issuer (this limitation
does not apply to securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities or to
repurchase agreements secured by such obligations).
(2) Purchase more than 10% of the voting securities of any issuer.
(3) Invest 25% or more of the value of its total assets (i) in
securities of companies primarily engaged in any one industry
(other than the U. S. Government, its agencies and
instrumentalities), and (ii) with respect to the Ohio Funds, in
municipal obligations of one issuer or which are related in such a
way that, in the opinion of Huntington, an economic, business or
political development other than an Ohio state-wide, national or
international development, affecting one such obligation would
also affect others in a similar manner. Such concentration may
occur as a result of changes in the market value of portfolio
securities, but such concentration may not result from investment.
(4) Loan more than 20% of the Funds' portfolio securities to brokers,
dealers or other financial organizations. All such loans will be
collateralized by cash or U.S. Government obligations that are
maintained at all times in an amount equal to at least 102% of the
current value of the loaned securities.
(5) Except for investments by the Money Market Fund in commercial
paper issued under Section 4(2) of the Securities Act of 1933 and
certain other restricted securities which meet the criteria for
liquidity as established by the Trustees, invest more than 10% of
the value of its total assets in illiquid securities including
restricted securities, repurchase agreements of over seven days'
duration and OTC options.
(6) Borrow in excess of 5% of its total assets (borrowings are
permitted only as a temporary measure for extraordinary or
emergency purposes) or pledge (mortgage) its assets as security
for an indebtedness.
(7) Invest more than 5% of its total assets in securities of any
issuer which, together with any predecessor, has been in operation
for less than three years.
(8) Purchase or sell real estate or real estate mortgage loans;
provided, however, that the Funds may invest in securities secured
by real estate or interests therein or issued by companies which
invest in real estate or interests therein.
(9) Purchase or sell commodities or commodities contracts, or
interests in oil, gas, or other mineral exploration or development
programs provided, however, that the Funds may invest in futures
contracts for bona fide hedging transactions, as defined in the
General Regulations under the Commodity Exchange Act, or for other
transactions permitted to entities exempt from the definition of
the term commodity pool operator, as long as, immediately after
entering a futures contract no more than 5% of the fair market
value of the Funds' assets would be committed to initial margins.
(10) Purchase securities on margin or effect short sales (except that
the Funds may obtain such short-term credits as may be necessary
for the clearance of purchases or sales of securities).
(11) Engage in the business of underwriting securities issued by others
or purchase securities, other than time deposits and restricted
securities (i.e., securities which cannot be sold without
registration or an exemption from registration), subject to legal
or contractual restrictions on disposition.
(12) Make loans to any person or firm except as provided below;
provided, however, that the making of a loan shall not be
construed to include (i) the acquisition for investment of bonds,
debentures, notes or other evidences of indebtedness of any
corporation or government which are publicly distributed or of a
type customarily purchased by institutional investors (which are
debt securities, generally rated not less than A by Moody's or
S&P, or the equivalent, privately issued and purchased by such
entities as banks, insurance companies and investment companies),
or (ii) the entry into repurchase agreements. However, the Funds
may lend their portfolio securities to brokers, dealers or other
institutional investors deemed by Huntington, the Trust's manager,
pursuant to criteria adopted by the Trustees, to be creditworthy
if, as a result thereof, the aggregate value of all securities
loaned does not exceed 20% of the value of the total assets of the
Funds and the loan is collateralized by cash or U.S. Government
obligations that are maintained at all times in an amount equal to
at least 102% of the current market value of the loaned
securities. Such transactions will comply with all applicable laws
and regulations.
(13) Purchase from or sell portfolio securities to officers, Trustees
or other "interested persons" (as defined in the Investment
Company Act of 1940, as amended) of the Funds, including its
investment manager and its affiliates, except as permitted by the
Investment Company Act of 1940, as amended and exemptive Rules or
Orders thereunder.
(14) Issue senior securities.
(15) Purchase or retain the securities of any issuer if, to the Funds'
knowledge, one or more of the officers, directors or Trustees of
the Trust, the investment adviser or the administrator,
individually own beneficially more than one-half of one percent of
the securities of such issuer and together own beneficially more
than 5% of such securities.
(16) Purchase the securities of other investment companies except by
purchase in the open market where no commission or profit to a
sponsor or dealer results from such purchase other than the
customary broker's commission or except when such purchase is part
of a plan of merger, consolidation, reorganization or acquisition
and except as permitted pursuant to Section 12(d)(1) of the
Investment Company Act of 1940, as amended.
All percentage limitations on investments will apply at the time of the
making of an investment and should not be considered violated unless an
excess or deficiency occurs or exists immediately after and as a result
of such investment.
To comply with certain state requirements, the Trust, with respect to
each Fund, agrees as follows: (1) A Fund will not invest more than 5% of
its net assets in warrants, valued at the lower of cost or market. No
more than 2% of this 5% may be warrants not listed on the New York or
American Stock Exchanges. (2) A Fund will not invest in oil, gas, or
mineral leases. (3) A Fund will not invest in real estate limited
partnerships. If state requirements change, these restrictions may be
modified or terminated without notice to shareholders.
In order to comply with requirements of a particular state, the Funds
will invest in other investment companies only to invest short-term cash
on a temporary basis. Huntington will waive its investment advisory fee
on assets invested in securities of other investment companies.
Portfolio Turnover
The portfolio turnover rate of a Fund is defined by the Securities and
Exchange Commission as the ratio of the lesser of annual sales or
purchases to the monthly average value of the portfolio, excluding from
both the numerator and the denominator securities with maturities at the
time of acquisition of one year or less. Under that definition, the
Money Market Funds will have no portfolio turnover. Portfolio turnover
generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transactions costs on the sale
of securities and reinvestment in other securities.
For the fiscal years ended December 31, 1994 and 1993 the portfolio
turnover rates for each of the following Funds were as follows:
Fund 1994 1993
Growth Fund 42% 29%
Income Equity Fund 50% 10%
Mortgage Securities Fund 91% 154%
Ohio Tax-Free Fund 12% 2%
Fixed Income Securities Fund 23% 7%
Short/Intermediate Fixed Income Securities Fund 38% 24%
Management of the Trust
Trustees and Officers
Trustees and officers of the Trust and their principal occupations
during the past five years are as set forth below. ("Federated Funds"
refers to certain investment companies distributed, administered and/or
advised by subsidiaries or affiliates of Federated Investors.)
Positions Held Principal Occupations
Name With The Trust During Past Five Years
David S. Schoedinger
229 East State Street
Columbus, OH
Birthdate: November 27, 1942
Trustee
Chairman of the Board, Schoedinger Funeral Service; President of
Schoedinger Financial Services, Inc.; Past President of Ohio Funeral
Directors Association (1986-1987); and Past President, Board of
Directors of National Selected Morticians (1992-1993).
John M. Shary
7677 Riverside Drive
Dublin, OH
Birthdate: November 30, 1930
Trustee
Member, Business Advisory Board, DPEC-Data Processing Education Corp.;
Member, Business Advisory Board, Hublink, Inc.; Member, Business
Advisory Board, Miratel Corporation; Member, Board of Directors, Applied
Information Technology Research Center (1988-1992); Member, Board of
Directors, AIT (1987-1992); Chief Financial Officer of OCLC Online
Computer Library Center, Inc. (1972-1992).
William R. Wise
613 Valley Forge Court
Westerville, OH
Birthdate: October 20, 1931
Trustee
Formerly, Corporate Director of Financial Services and Treasurer,
Childrens Hospital, Columbus, Ohio; Associate Executive Director and
Treasurer, Childrens Hospital, Columbus, Ohio (1985-1989).
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Federated
Funds; Vice President and Treasurer of the Federated Funds.
Ronald M. Petnuch
Federated Investors Tower
Pittsburgh, PA
Birthdate: February 27, 1960
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services; Vice President and
Assistant Treasurer of some of the Federated Funds; formerly, Associate
Corporate Counsel, Federated Investors.

Joseph M. Huber
Federated Investors Tower
Pittsburgh, PA
Birthdate: August 18, 1949
Secretary
Corporate Counsel, Federated Investors.
Except as stated above, the principal occupations of the officers and
Trustees for the last five years have been with the employers as shown
above, although in some cases they have held different positions with
such employers.
Fund Ownership
As of April 7, 1995, the Trustees and officers as a group owned less
than 1% of the shares of the Trust.
As of April 7, 1995, the following shareholders of record owned 5% or
more of the outstanding Investment Shares of The Monitor Money Market
Fund: Telamon Electronics Corp., Indianapolis, IN, owned approximately
5,061,087 shares (9.88%); Huntington Trust Company, Columbus, OH, acting
in various capacities for numerous accounts, owned approximately
8,863,623 shares (17.31%); National Financial Services, Corp., New York,
NY, owned approximately 23,911,484 shares (46.69%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor Money Market Fund:
Huntington Trust Company, N.A., Columbus, OH, acting in various
capacities for numerous accounts, owned approximately 260,728,615 shares
(98.47%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Investment Shares of The Monitor Ohio Municipal
Money Market Fund: Huntington Trust Company, Columbus, OH, acting in
various capacities for numerous accounts, owned approximately 37,252,887
shares (78.37%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor Ohio Municipal Money
Market Fund: Huntington Trust Company, N.A., Columbus, OH, acting in
various capacities for numerous accounts, owned approximately 50,994,516
shares (99.93%).
As of April 7, 1995, the following shareholders of record owned 5% or
more of the outstanding Investment Shares of The Monitor U.S. Treasury
Money Market Fund: Medical Center Company, Cleveland, OH, owned
approximately 1,802,570 shares (7.09%); Huntington Trust Company,
Columbus, OH, acting in various capacities for numerous accounts, owned
approximately 2,914,749 shares (11.47%); Lenora J. Petrarca, Akron, OH,
owned approximately 3,252,898 shares (12.80%); Allied Fidelity Insurance
Co., Indianapolis, IN, owned approximately 3,428,038 shares (13.49%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor U.S. Treasury Money
Market Fund: Huntington Trust Company, N.A., Columbus, OH, acting in
various capacities for numerous accounts, owned approximately
309,482,741 shares (99.87%).
As of April 7, 1995, no shareholders of record owned 5% or more of the
outstanding Investment Shares of The Monitor Growth Fund.
As of April 7, 1995, the following shareholders of record owned 5% or
more of the outstanding Trust Shares of The Monitor Growth Fund:
Huntington Trust Company, N.A., Columbus, OH, acting in various
capacities for numerous accounts, owned approximately 1,359,044 shares
(32.74%); Huntington Trust Company, Inc., Columbus, OH, acting in
various capacities for numerous accounts, owned approximately 2,750,047
shares (66.24%).
As of April 7, 1995, the following shareholders of record owned 5% or
more of the outstanding Trust Shares of The Monitor Income Equity Fund:
Huntington Trust Company, N.A., Columbus, OH, acting in various
capacities for numerous accounts, owned approximately 1,706,813 shares
(32.60%); Huntington Trust Company, Inc., Columbus, OH, acting in
various capacities for numerous accounts, owned approximately 3,477,852
shares (66.43%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Investment Shares of The Monitor Mortgage
Securities Fund: Alex Barna, Shaker Heights, OH, owned approximately
23,300 shares (8.80%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor Mortgage Securities
Fund: Huntington Trust Company, N.A., Columbus, OH, acting in various
capacities for numerous accounts, owned approximately 7,628,741 shares
(98.63%).
As of April 7, 1995, the following shareholders of record owned 5% or
more of the outstanding Investment Shares of The Monitor Ohio Tax-Free
Fund: Leroy L. and Louise E. Sawatsky, Columbus, OH, owned approximately
5,670 shares (5.13%); John W. and Arlene J. Warbritton, Westerville, OH,
owned approximately 5,738 shares (5.20%); Charles M. Ridenour, Lima, OH,
owned approximately 6,419 shares (5.81%); Ursula E.M. and William J.
Umberg, Cincinnati, OH, owned approximately 9,514 shares (8.61%);
Florence M., Ralph E., and Gerald L. Brinkman, Grove City, OH, owned
approximately 10,209 shares (9.24%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor Ohio Tax-Free Fund:
Huntington Trust Company, N.A., Columbus, OH, acting in various
capacities for numerous accounts, owned approximately 2,669,747 shares
(95.37%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Investment Shares of The Monitor Fixed Income
Securities Fund: Robert S. Obenour, Columbus, OH, owned approximately
5,650 shares (5.85%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor Fixed Income
Securities Fund: Huntington Trust Company, N.A., Columbus, OH, acting in
various capacities for numerous accounts, owned approximately 6,255,795
shares (99.49%).
As of April 7, 1995, the following shareholder of record owned 5% or
more of the outstanding Trust Shares of The Monitor Short/Intermediate
Fixed Income Securities Fund: Huntington Trust Company, N.A., Columbus,
OH, acting in various capacities for numerous accounts, owned
approximately 6,609,293 shares (99.34%).
The Declaration of Trust of the Trust provides that the Trust will, to
the fullest extent permitted by law, indemnify its Trustees and officers
against all liabilities and against all expenses reasonably incurred in
connection with any claim, action, suit or proceeding in which they may
be involved because of their offices with the Trust, except if it is
determined in the manner specified in the Declaration of Trust that they
have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust or that such indemnification
would relieve any officer or Trustee of any liability to the Trust or
its shareholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his or her duties. The Trust, at
its expense, may provide liability insurance for the benefit of its
Trustees and officers.
Trustees Compensation

AGGREGATE
NAME, COMPENSATION
POSITION WITH FROM
TRUST TRUST*#

David S. Schoedinger $13,000.00
Trustee

John M. Shary $14,000.00
Trustee

William R. Wise $13,000.00
Trustee

*Information is furnished for the fiscal year ended December 31, 1994.
The Trust is the only investment company in the Fund Complex.
#The aggregate compensation is provided for the Trust which is comprised
of nine portfolios.
Investment Adviser
Huntington Trust Company, National Association, a national banking
association, is an indirect, wholly-owned subsidiary of Huntington
Bancshares Incorporated ("HBI"). With $18 billion in assets as of
December 31, 1994, HBI is a major Midwest regional bank holding company.
Piper Capital Management, Inc., sub-adviser to the Monitor Mortgage
Securities Fund, is a wholly-owned subsidiary of the publicly traded
investment banking firm, Piper Jaffray, Inc.
Under the investment advisory agreement between the Trust and Huntington
(the "Investment Advisory Agreement"), Huntington, at its expense,
furnishes continuously an investment program for the various Funds and
makes investment decisions on their behalf, all subject to such policies
as the Trustees may determine.
In providing investment advisory services to the various Funds,
Huntington regularly provides the Funds with investment research,
advice, and supervision and continuously furnishes investment programs
consistent with the investment objectives and policies of the various
Funds, and determines, for the various Funds, what securities shall be
purchased, what securities shall be held or sold, and what portion of a
Fund's assets shall be held uninvested, subject always to the provisions
of the Trust's Declaration of Trust and By-laws, and of the Investment
Company Act of 1940, and to a Fund's investment objectives, policies,
and restrictions, and subject further to such policies and instructions
as the Trustees may, from time to time, establish.
During the fiscal years ended 1992, 1993, and 1994, each of the Funds in
operation during such periods paid fees to Huntington pursuant to the
Investment Advisory Agreement as follows:
<TABLE>
<CAPTION>
Fund 1992 1993 1994
<S> <C> <C> <C>
Money Market Fund $1,001,809 $1,018,882 $1,018,586
Ohio Municipal Money Market Fund $93,856* $72,193* $102,856*
U.S. Treasury Money Market Fund $312,690 $374,536 $495,003
Growth Fund $493,531* $624,290 $647,947
Income Equity Fund $517,410* $670,607 $754,255
Mortgage Securities Fund $169,508* $503,669 $379,126*
Ohio Tax-Free Fund $220,585 $284,430 $299,882
Fixed Income Securities Fund $351,252* $528,960 $578,719
Short/Intermediate Fixed Income Securities Fund $566,811* $644,764 $636,447
</TABLE>
*During the fiscal year ended December 31, 1992, gross investment
advisory fees were $173,024, $504,841, $530,350, $249,276, $355,112, and
$569,736, of which $79,168, $11,310, $12,940, $79,768, $3,860, and
$2,925 was voluntarily waived for the Ohio Municipal Money Market Fund,
Growth Fund, Income Equity Fund, Mortgage Securities Fund, Fixed Income
Securities Fund, and Short/Intermediate Fixed Income Securities Fund,
respectively. During the fiscal year ended December 31, 1993, gross
investment advisory fees were $144,386 of which $72,193 was voluntarily
waived for the Ohio Municipal Money Market Fund. During the fiscal year
ended December 31, 1994, gross investment advisory fees were $205,712
and $387,126, of which $102,856 and $8,000 were voluntarily waived for
the Ohio Municipal Money Market Fund and the Mortgage Securities Fund,
respectively. In addition, the Mortgage Securities Fund was reimbursed
for other operating expenses in the amount of $50,000.
The Investment Advisory Agreement provides that Huntington shall not be
subject to any liability for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to
which the Investment Advisory Agreement relates, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance,
bad faith, gross negligence, or reckless disregard of its obligations
and duties on the part of Huntington.
The Investment Advisory Agreement may be terminated without penalty with
respect to any Fund at any time by the vote of the Trustees or by the
shareholders of that Fund upon 60 days' written notice, or by Huntington
on 90 days' written notice. It may be amended only by a vote of the
shareholders of the affected Fund(s). The Agreement also terminates
without payment of any penalty in the event of its assignment. The
Investment Advisory Agreement provides that it will continue in effect
from year to year only so long as such continuance is approved at least
annually with respect to each Fund by the vote of either the Trustees or
the shareholders of the Fund, and, in either case, by a majority of the
Trustees who are not "interested persons" of Huntington.
Because of the internal controls maintained by The Huntington Trust
Company, N.A. to restrict the flow of non-public information, the Funds'
investments are typically made without any knowledge of Huntington's or
its affiliates' lending relationships with an issuer.
Glass-Steagall Act
In 1971, the United States Supreme Court held in Investment Company
Institute v. Camp that the federal statute commonly referred to as the
Glass-Steagall Act prohibits a national bank from operating a mutual
fund for the collective investment of managing agency accounts.
Subsequently, the Board of Governors of the Federal Reserve System (the
"Board") issued a regulation and interpretation to the effect that the
Glass-Steagall Act and such decision: (a) forbid a bank holding company
registered under the Federal Bank Holding Company Act of 1956 (the
"Holding Company Act") or any non-bank affiliate thereof from
sponsoring, organizing, or controlling a registered, open-end investment
company continuously engaged in the issuance of its shares, but (b) do
not prohibit such a holding company or affiliate from acting as
investment adviser, transfer agent, and custodian to such an investment
company. In 1981, the United States Supreme Court held in Board of
Governors of the Federal Reserve System v. Investment Company Institute
that the Board did not exceed its authority under the Holding Company
Act when it adopted its regulation and interpretation authorizing bank
holding companies and their non-bank affiliates to act as investment
advisers to registered closed-end investment companies. In the Board of
Governors case, the Supreme Court also stated that if a national bank
complies with the restrictions imposed by the Board in its regulation
and interpretation authorizing bank holding companies and their non-bank
affiliates to act as investment advisers to investment companies, a
national bank performing investment advisory services for an investment
company would not violate the Glass-Steagall Act.
Huntington believes that it possesses the legal authority to perform the
services for the Trust contemplated by the Investment Advisory
Agreement. Future changes in either federal or state statutes and
regulations relating to the permissible activities of banks or bank
holding companies and the subsidiaries or affiliates of those entities,
as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations could
prevent or restrict Huntington from continuing to perform such services
for the Trust. Depending upon the nature of any changes in the services
which could be provided by Huntington, the Board of Trustees of the
Trust would review the Trust's relationship with Huntington and consider
taking all action necessary in the circumstances.
Should further legislative, judicial, or administrative action prohibit
or restrict the activities of Huntington, its affiliates, and its
correspondent banks in connection with customer purchases of shares of
the Trust, such banks might be required to alter materially or
discontinue the services offered by them to customers. It is not
anticipated, however, that any change in the Funds' method of operations
would affect their net asset values per share or result in financial
losses to any customer.
State securities laws governing the ability of depository institutions
to act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks
and financial institutions may be required to register as dealers
pursuant to state law.
Portfolio Transactions
Huntington may place portfolio transactions with broker-dealers which
furnish, without cost, certain research, statistical, and quotation
services of value to Huntington and its affiliates in advising the Trust
and other clients, provided that they shall always seek best price and
execution with respect to the transactions. Certain investments may be
appropriate for the Trust and for other clients advised by Huntington.
Investment decisions for the Trust and other clients are made with a
view to achieving their respective investment objectives and after
consideration of such factors as their current holdings, availability of
cash for investment, and the size of their investments generally.
Frequently, a particular security may be bought or sold for only one
client or in different amounts and at different times for more than one
but less than all clients. Likewise, a particular security may be bought
for one or more clients when one or more other clients are selling the
security. In addition, purchases or sales of the same security may be
made for two or more clients of an investment adviser on the same day.
In such event, such transactions will be allocated among the clients in
a manner believed by Huntington to be equitable to each. In some cases,
this procedure could have an adverse effect on the price or amount of
the securities purchased or sold by the Trust. Purchase and sale orders
for the Trust may be combined with those of other clients of Huntington
in the interest of achieving the most favorable net results for the
Trust.
Brokerage and Research Services
Transactions on U.S. stock exchanges and other agency transactions
involve the payment by a Fund of negotiated brokerage commissions. Such
commissions vary among different brokers. Also, a particular broker may
charge different commissions according to such factors as the difficulty
and size of the transaction. Transactions in foreign securities often
involve the payment of fixed brokerage commissions, which are generally
higher than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-counter
markets, but the price paid by a Fund usually includes an undisclosed
dealer commission or mark-up. In underwritten offerings, the price paid
by a Fund includes a disclosed, fixed commission or discount retained by
the underwriter or dealer.
Huntington places all orders for the purchase and sale of portfolio
securities for a Fund and buys and sells securities for a Fund through a
substantial number of brokers and dealers. In so doing, it uses its best
efforts to obtain for a Fund the best price and execution available. In
seeking the best price and execution, Huntington, having in mind a
Fund's best interests, considers all factors it deems relevant,
including, by way of illustration, price, the size of the transaction,
the nature of the market for the security, the amount of the commission,
the timing of the transaction taking into account market prices and
trends, the reputation, experience, and financial stability of the
broker-dealer involved, and the quality of service rendered by the
broker-dealer in other transactions.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional
investors to receive research, statistical, and quotation services from
broker-dealers that execute portfolio transactions for the clients of
such advisers. Consistent with this practice, Huntington receives
research, statistical, and quotation services from many broker-dealers
with which it places a Fund's portfolio transactions. These services,
which in some cases may also be purchased for cash, include such matters
as general economic and security market reviews, industry and company
reviews, evaluations of securities, and recommendations as to the
purchase and sale of securities. Some of these services are of value to
Huntington and its affiliates in advising various of their clients
(including the Trust), although not all of these services are
necessarily useful and of value in managing the Trust. The fee paid by a
Fund to Huntington is not reduced because Huntington and its affiliates
receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and by the Investment Advisory Agreement, Huntington may cause
a Fund to pay a broker-dealer that provides brokerage and research
services to Huntington an amount of disclosed commission for effecting a
securities transaction for the Fund in excess of the commission which
another broker-dealer would have charged for effecting that transaction.
Huntington's authority to cause a Fund to pay any such greater
commissions is also subject to such policies as the Trustees may adopt
from time to time.
In the fiscal years ended December 31, 1992, 1993 and 1994, the Funds
named below paid the following brokerage commissions:
Fund 1992 1993 1994
Growth Fund $117,343 $89,776 $121,407
Income Equity Fund $ 56,616 $64,330 $121,749
Administrator
Federated serves as administrator to the Trust pursuant to an
Administrative Services Agreement dated January 11, 1991 (the
"Administration Agreement"). Pursuant to the Administration Agreement,
Federated maintains office facilities for the Trust, maintains the
Trust's financial accounts and records, and furnishes the Trust
statistical and research data, data processing, clerical, accounting,
and bookkeeping services, and certain other services required by the
Trust. In addition, Federated prepares annual and semi-annual reports to
the Securities and Exchange Commission, prepares federal and state tax
returns, prepares filings with state securities commissions, and
generally assists in all aspects of the Trust's operations.
The Administration Agreement became effective on January 11, 1991 and
will continue in effect for a period of five years from that date,
unless sooner terminated by the Trust for cause, as provided in the
Agreement.
The Administration Agreement provides that Federated shall not be liable
for any error of judgment or mistake of law or any loss suffered by the
Trust in connection with the matters to which the Administration
Agreement relates, except a loss resulting from willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or from the
disregard by Federated of its obligations and duties thereunder.
For the fiscal years ended December 31, 1992, 1993, and 1994, the Funds
paid the following fees to Federated, pursuant to the administration
agreement in effect for those periods:
<TABLE>
<CAPTION>
Fund 1992 1993 1994
<S> <C> <C> <C>
Money Market Fund $510,119 $442,605* $433,373*
Ohio Municipal Money Market Fund $ 88,206 $ 51,912* $73,218*
U.S. Treasury Money Market Fund $172,715 $202,984* $310,007*
Growth Fund $128,630 $117,936* $119,967*
Income Equity Fund $ 97,864 $117,976 $131,350
Mortgage Securities Fund $ 62,692* $114,000* $78,753*
Ohio Tax-Free Fund $ 67,417 $ 60,265* $62,952*
Fixed Income Securities Fund $108,440 $120,126* $130,878*
Short/Intermediate Fixed Income
Securities Fund $125,943 $136,220 $133,654
</TABLE>
* During the fiscal year ended December 31, 1992, gross administrator
fees were $75,616, of which $12,924 was voluntarily waived for the
Mortgage Securities Fund. During the fiscal year ended December 31,
1993, gross administrator fees were $509,368, $71,994, $213,122,
$156,023, $151,016, $85,257, and $158,636 of which $66,763, $20,082,
$10,138, $38,087, $37,016, $24,992, and $38,510 was voluntarily waived
for the Money Market Fund, Ohio Municipal Money Market Fund, U.S.
Treasury Money Market Fund, Growth Fund, Mortgage Securities Fund, Ohio
Tax-Free Fund, and Fixed Income Securities Fund, respectively. During
the fiscal year ended December 31, 1994, gross administrator fees were
$506,567, $102,392, $370,331, $160,907, $115,132, $89,540, and $172,811,
of which $73,194, $29,174, $60,324, $40,940, $36,379, $26,588, and
$41,933 were voluntarily waived for the Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth
Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, and Fixed Income
Securities Fund, respectively.
Distributor
The Trust has a Distributor's Contract with Federated Securities Corp.,
under which the Distributor sells and distributes shares of each of the
Funds. The Distributor is not obligated to sell any specific amount of
shares of any Fund. The Contract may be terminated at any time as to any
Fund on not more than 60 days' notice by vote of a majority of the
Trustees who are not parties to such agreement or "interested persons"
of any such party or by the vote of a majority of the outstanding voting
securities of the Fund.
The Distribution Plans
The services provided and the fees payable under the Distribution Plans
to which Investment Shares are subject are described in the Prospectus
for Investment Shares under "Distribution of Investment
Shares-Distribution Plans."
The Distribution Plan for all Funds (except the Plan for the Mortgage
Securities Fund, which was approved by the Trustees on January 22, 1992,
and the Plan for the U.S. Treasury Money Market Fund, which was approved
by the Trustees on May 26, 1993) was initially approved on February 21,
1991 by the Trustees, including a majority of the Trustees who are not
interested persons of the Trust (as defined in the Investment Company
Act of 1940) and who have no direct or indirect financial interest in
the Distribution Plan (the "Independent Trustees").
In accordance with Rule 12b-1 under the Investment Company Act of 1940,
the Distribution Plans may be terminated with respect to any Fund by a
vote of a majority of the Independent Trustees, or by a vote of a
majority of the outstanding Investment Shares of that Fund. The
Distribution Plans may be amended by vote of the Trustees, including a
majority of the Independent Trustees, cast in person at a meeting called
for such purpose, except that any change in the Distribution Plans that
would materially increase the fee payable thereunder with respect to a
Fund requires the approval of the holders of that Fund's Investment
Shares. The Trustees will review on a quarterly and annual basis written
reports of the amounts received and expended under the Distribution
Plans (including amounts expended by the Distributor to brokers, dealers
and administrators pursuant to the agreement entered into under the
Distribution Plans) indicating the purposes for which such expenditures
were made.
The Distribution Plans provides that they will continue in effect with
respect to each Fund for successive one-year periods, provided that each
such continuance is specifically approved (i) by the vote of a majority
of the Independent Trustees and (ii) by the vote of a majority of all
the Trustees, cast in person at a meeting called for such purpose. For
so long as the Distribution Plans remains in effect, the selection and
nomination of those Trustees who are not interested persons of the Trust
(as defined in the Investment Company Act of 1940) shall be committed to
the discretion of such disinterested persons.
For the fiscal years ended December 31, 1992, 1993 and 1994, the Funds
named below paid the following fees pursuant to the Distribution Plans:
<TABLE>
<CAPTION>
Fund 1992 1993 1994
<S> <C> <C> <C>
Money Market Fund $21,858 $20,986 $26,329
Ohio Municipal Money Market Fund $1,651 $6,171 $31,216
U.S. Treasury Money Market Fund - $152* $6,160*
Growth Fund $6,788 $9,751 $8,652
Mortgage Securities Fund $37,220 $16,813 $15,644*
Ohio Tax-Free Fund $2,069 $4,955 $6,638
Fixed Income Securities Fund $1,288 $4,257 $5,746
</TABLE>
*For the fiscal year ended December 31, 1992, gross distribution fees
were $41,786, of which $4,566 was voluntarily waived for the Mortgage
Securities Fund. For the fiscal year ended December 31, 1993, gross
distribution fees were $379 and $33,627, of which $227 and $16,814 were
voluntarily waived for the U.S. Treasury Money Market Fund and the
Mortgage Securities Fund, respectively. For the fiscal year ended
December 31, 1994, gross distribution fees were $15,399 and $31,289, of
which $9,239 and $15,645 were voluntarily waived for the U.S. Treasury
Money Market Fund and the Mortgage Securities Fund, respectively.
Determination of Net Asset Value
The times and days on which the net asset value of each of the Funds is
calculated is described in the Prospectus.
The Money Market Funds have elected to use the amortized cost method of
valuation pursuant to Rule 2a-7 under the Investment Company Act of
1940. The amortized cost method involves valuing an instrument at its
cost initially and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. This
method may result in periods during which value, as determined by
amortized cost, is higher or lower than the price a Fund would receive
if it sold the instrument. The value of securities in a Fund can be
expected to vary inversely with changes in prevailing interest rates.
Pursuant to Rule 2a-7, each of the Money Market Funds will maintain a
dollar-weighted average portfolio maturity appropriate to maintaining a
stable net asset value per share, provided that no Fund will purchase
any security with a remaining maturity of more than 397 days (except as
described below) nor maintain a dollar-weighted average maturity of
greater than 90 days. Repurchase agreements involving the purchase of
securities with remaining maturities of greater than 397 days will be
treated as having a maturity equal to the period remaining until the
date on which the repurchase is scheduled to occur or, where no date is
specified and the agreement is subject to a demand feature, the notice
period applicable to the demand to repurchase those securities. A
variable rate instrument, the principal amount of which is scheduled to
be repaid in more than 397 days but which is subject to a demand
feature, shall be deemed to have a maturity equal to the longer of the
period remaining until the next readjustment of the interest rate or the
period remaining until the principal amount may be recovered through
exercise of the demand feature. A floating rate instrument, the
principal amount of which is scheduled to be repaid in more than 397
days but which is subject to a demand feature, shall be deemed to have a
maturity equal to the period remaining until the principal amount can be
recovered through demand. The Trustees have undertaken to establish
procedures reasonably designed, taking into account current market
conditions and each of the Money Market Funds' investment objective, to
stabilize the net asset value per share of each Money Market Fund for
purposes of sales and redemptions at $1.00. These procedures include a
review by the Trustees, at such intervals as they deem appropriate, to
determine the extent, if any, to which the net asset value per share of
each Fund, calculated by using available market quotations, deviates
from $1.00 per share. In the event such deviation exceeds one-half of
one percent, Rule 2a-7 requires that the Trustees promptly consider what
action, if any, should be initiated. If the Trustees believe that the
extent of any deviation from a Fund's $1.00 amortized cost price per
share may result in material dilution or other unfair results to
investors, the Trustees will take such steps as they deem appropriate to
eliminate or reduce to the extent reasonably practicable any such
dilution or unfair results. These steps may include selling portfolio
instruments prior to maturity, shortening the Fund's average portfolio
maturity, withholding or reducing dividends, reducing the number of a
Fund's outstanding shares without monetary consideration, or utilizing a
net asset value per share based on available market quotations. In
addition, if Huntington becomes aware that any Second Tier Security or
Unrated Security held by a Fund has received a rating from any NRSRO
below the NRSRO's two highest rating categories, the procedures adopted
by the Trustees in accordance with Rule 2a-7 require Huntington to
dispose of such security unless (i) the sale would cause the deviation
between the Fund's amortized cost and market-determined values per share
to exceed .40 of one percent (in which case the Trustees will meet to
determine what action to take) or (ii) the Trustees reassess the credit
quality of the security and determine that it is in the best interests
of shareholders to retain the investment. In the event a Fund holds a
defaulted security, a security that has ceased to be an Eligible
Security, or a security that has been determined to no longer present
minimal credit risks, Rule 2a-7 requires the Fund to dispose of the
security unless the Trustees determine that such action is not in the
best interest of shareholders. The Rule requires each Fund to limit its
investments to securities determined to present minimal credit risks
based on factors in addition to ratings assigned a security by an NRSRO
and which are at the time of acquisition Eligible Securities. (See
Appendix I to the Prospectus for a summary of the definition under Rule
2a-7 of capitalized terms used above and see the Appendix to this
Statement of Additional Information for a description of the ratings
assigned by the NRSROs utilized by Huntington in managing the Funds'
investments.)
Securities traded on a national securities exchange or quoted on the
NASDAQ National Market System are valued at their last-reported sale
price on the principal exchange or reported by NASDAQ or, if there is no
reported sale, and in the case of over-the-counter securities not
included in the NASDAQ National Market System, at a bid price estimated
by a broker or dealer. Debt securities, including zero-coupon
securities, and certain foreign securities will be valued by a pricing
service. Other foreign securities will be valued by the Trust's
custodian. Securities for which current market quotations are not
readily available and all other assets are valued at fair value as
determined in good faith by the Trustees, although the actual
calculations may be made by persons acting pursuant to the direction of
the Trustees.
If any securities held by a Fund are restricted as to resale, their fair
value is generally determined as the amount which the Fund could
reasonably expect to realize from an orderly disposition of such
securities over a reasonable period of time. The valuation procedures
applied in any specific instance are likely to vary from case to case.
However, consideration is generally given to the financial position of
the issuer and other fundamental analytical data relating to the
investment and to the nature of the restrictions on disposition of the
securities (including any registration expenses that might be borne by
the Fund in connection with such disposition). In addition, specific
factors are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of the same
class (both at the time of purchase and at the time of valuation), the
size of the holding, the prices of any recent transactions or offers
with respect to such securities, and any available analysts' reports
regarding the issuer.
Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of
the New York Stock Exchange. The values of these securities used in
determining the net asset value of the Fund's shares are computed as of
such times. Also, because of the amount of time required to collect and
process trading information as to large numbers of securities issues,
the values of certain securities (such as convertible bonds and U.S.
Government securities) are determined based on market quotations
collected earlier in the day at the latest practicable time prior to the
close of the Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the Exchange
which will not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair
value, in the manner described above.
The proceeds received by each Fund for each issue or sale of its shares,
and all income, earnings, profits, and proceeds thereof, subject only to
the rights of creditors, will be specifically allocated to such Fund,
and constitute the underlying assets of that Fund. The underlying assets
of each Fund will be segregated on the Trust's books of account, and
will be charged with the liabilities in respect of such Fund and with a
share of the general liabilities of the Trust. Expenses with respect to
any two or more Funds are to be allocated in proportion to the net asset
values of the respective Funds except where allocations of direct
expenses can otherwise be fairly made.
Additional Purchase Information-Payment in Kind
In addition to payment by check, shares of a Fund may be purchased by
customers of Huntington in exchange for securities held by an investor
which are acceptable to that Fund. Investors interested in exchanging
securities must first telephone Huntington at (800) 253-0412 for
instructions regarding submission of a written description of the
securities the investor wishes to exchange. Within five business days of
the receipt of the written description, Huntington will advise the
investor by telephone whether the securities to be exchanged are
acceptable to the Fund whose shares the investor desires to purchase and
will instruct the investor regarding delivery of the securities. There
is no charge for this review.
Securities accepted by a Fund are valued in the manner and on the days
described in the section entitled "Determination of Net Asset Value" as
of 4:00 p.m. (Eastern Time). Acceptance may occur on any day during the
five-day period afforded Huntington to review the acceptability of the
securities. Securities which have been accepted by a Fund must be
delivered within five days following acceptance.
The value of the securities to be exchanged and of the shares of the
Fund may be higher or lower on the day Fund shares are offered than on
the date of receipt by Huntington of the written description of the
securities to be exchanged. The basis of the exchange of such securities
for shares of the Fund will depend on the value of the securities and
the net asset value of Fund shares next determined following acceptance
on the day Fund shares are offered. Securities to be exchanged must be
accompanied by a transmittal form which is available from Huntington.
A gain or loss for federal income tax purposes may be realized by the
investor upon the securities exchange depending upon the cost basis of
the securities tendered. All interest, dividends, subscription or other
rights with respect to accepted securities which go "ex" after the time
of valuation become the property of the Fund and must be delivered to
the Fund by the investor forthwith upon receipt from the issuer.
Further, the investor must represent and agree that all securities
offered to the Fund are not subject to any restrictions upon their sale
by the Fund under the Securities Act of 1933, or otherwise.
Taxes
Federal Income Taxation
It is intended that each Fund qualify each year as a regulated
investment company under Subchapter M of the Code. In order so to
qualify and to qualify for the special tax treatment accorded regulated
investment companies and their shareholders, a Fund must, among other
things:
(a) derive at least 90% of its gross income from dividends, interest,
payments with respect to certain securities loans, and gains from
the sale of stock, securities and foreign currencies, or other
income (including but not limited to gains from options, futures,
or forward contracts) derived with respect to its business of
investing in such stock, securities, or currencies;
(b) derive less than 30% of its gross income from gains from the sale
or other disposition of assets (including securities) held for
less than three months;
(c) distribute with respect to each taxable year at least 90% of its
"investment company taxable income" (as that term is defined in
the Code) and tax-exempt income (less deductions attributable to
that income) for such year; and
(d) diversify its holdings so that, at the end of each fiscal quarter
(i) at least 50% of the market value of the Fund's assets is
represented by cash or cash items, U.S. Government securities,
securities of other regulated investment companies, and other
securities limited in respect of any one issuer to a value not
greater than 5% of the value of the Fund's total assets and 10% of
the outstanding voting securities of such issuer, and (ii) not
more than 25% of the value of its assets is invested in the
securities (other than those of the U.S. Government or other
regulated investment companies) of any one issuer or of two or
more issuers which the Fund controls and which are engaged in the
same, similar, or related trades or businesses.
If a Fund qualifies as a regulated investment company that is accorded
special tax treatment, the Fund will not be subject to federal income
tax on income paid to its shareholders in the form of dividends
(including capital gain dividends).
If a Fund fails to qualify as a regulated investment company accorded
special tax treatment in any taxable year, the Fund would be subject to
tax on its income at corporate rates, and could be required to recognize
unrealized gains, pay substantial taxes and interest and make
substantial distributions before requalifying as a regulated investment
company that is accorded special tax treatment. In addition, all
distributions by the Fund would be taxed as if made by a regular
corporation; thus a Fund could not pay exempt interest or capital gains
dividends.
If a Fund fails to distribute in a calendar year substantially all of
its ordinary income for such year and substantially all of its net
capital gains for the year ending October 31 (or later if the Fund is
permitted so to elect and so elects), plus any retained amount from the
prior year, the Fund will be subject to a 4% excise tax on the
undistributed amounts. Each Fund intends generally to make distributions
sufficient to avoid imposition of the 4% excise tax.
Return of capital distributions
If a Fund makes a distribution in excess of its current and
accumulated "earnings and profits" in any taxable year, the excess
distribution will be treated as a non-taxable return of capital to
the extent of a shareholder's tax basis in his shares. If the
shareholder's basis has been reduced to zero, any additional
return of capital distributions will be taxable as capital gain.
Exempt-interest dividends
A Fund will be qualified to pay exempt-interest dividends to its
shareholders only if, at the close of each quarter of the Fund's
taxable year, at least 50% of the total value of the Fund's assets
consists of obligations the interest on which is exempt from
federal income tax. If a Fund intends to pay only exempt-interest
dividends, the Fund may be limited in its ability to engage in
such taxable transactions as forward commitments, repurchase
agreements, financial futures, and options contracts on financial
futures, tax-exempt bond indices, and other assets.
In general, exempt-interest dividends, if any, attributable to
interest received on certain private activity bonds and certain
industrial development bonds will not be tax-exempt to any
shareholders who are "substantial users" of the facilities
financed by such bonds or who are "related persons" of such
substantial users (within the meaning of Section 147(a) of the
Code). Recipients of certain Social Security and Railroad
Retirement benefits may have to take into account exempt-interest
dividends from the Fund in determining the taxability of such
benefits. Shareholders should consult their own tax adviser
regarding the potential effect on them (if any) of any investment
in the Fund.
A Fund which is qualified to pay exempt-interest dividends will
inform investors within 60 days of the Fund's fiscal year end of
the percentage of its income distributions designated as tax-
exempt. The percentage is applied uniformly to all distributions
made during the year.
Hedging transactions
Certain investment and hedging activities of a Fund, including
transactions in options, futures contracts, straddles, forward
contracts, foreign currencies, foreign securities, or other
similar transactions will be subject to special tax rules. In a
given case, these rules may accelerate income to the Fund, defer
losses to the Fund, cause adjustments in the holding periods of
the Fund's assets, or convert short-term capital losses into long-
term capital losses. These rules could therefore affect the
amount, timing, and character of the Fund's income and
distributions to shareholders. Income earned as a result of these
transactions would, in general, not be eligible for the dividends
received deduction or for treatment as exempt-interest dividends
when distributed to shareholders. Each Fund will endeavor to make
any available elections pertaining to such transactions in a
manner believed to be in the best interests of the Fund.
Under the 30% of gross income test described above (see "Federal
Income Taxation"), a Fund will be restricted in selling assets
held or considered under Code rules to have been held for less
than three months, and in engaging in certain hedging transactions
(including hedging transactions in options and futures) that could
cause certain Fund assets to be treated as held for less than
three months.
Foreign currency-denominated securities and related hedging
transactions
A Fund's transactions in foreign currency-denominated debt
securities, certain foreign currency options, futures contracts,
and forward contracts may give rise to ordinary income or loss to
the extent such income or loss results from fluctuations in the
value of the foreign currency concerned.
Foreign Tax Credit
If more than 50% of a Fund's assets at year end consist of the
debt and equity securities of foreign corporations, that Fund
intends to qualify for and make the election permitted under
Section 853 of the Code so that shareholders will be able to claim
a credit or deduction on their income tax returns for, and will be
required to treat as part of the amount distributed to them, their
pro rata portion of qualified taxes paid by the Fund to foreign
countries (which taxes relate primarily to investment income).
Shareholders who do not itemize on their federal income tax
returns may claim a credit (but no deduction) for such foreign
taxes. A shareholder's ability to claim such a foreign tax credit
will be subject to certain limitations imposed by the Code, as a
result of which shareholders may not get full credit for the
amount of foreign taxes so paid by the Fund.
The foregoing is only a summary of some of the important federal
income tax considerations generally affecting purchases of shares
of a Fund. No attempt is made to present a detailed explanation of
the federal income tax treatment of each Fund or its shareholders,
and this discussion is not intended as a substitute for careful
tax planning. Accordingly, investors are urged to consult their
tax advisors with specific reference to their own tax situation.
Ohio Income Taxation
For a summary of the Ohio income tax treatment of dividends paid
by the Ohio Funds, see "Distributions and Taxes-Ohio Personal
Income Taxes" in the Prospectus.
Dividends and Distributions
Money Market Funds
The net investment income of each class of shares of each Money
Market Fund is determined as of 4:00 p.m. (Eastern Time) each
Business Day. All of the net investment income so determined
normally will be declared as a dividend daily to shareholders of
record of each class as of the close of business and prior to the
determination of net asset value. Unless the Business Day before a
weekend or holiday is the last day of an accounting period, the
dividend declared on that day will include an amount in respect of
the Fund's income for the subsequent non-business day or days. No
daily dividend will include any amount of net income in respect of
a subsequent semi-annual accounting period. Dividends declared
during any month will be invested as of the close of business on
the last calendar day of that month (or the next Business Day
after the last calendar day
of the month if the last calendar day of the month is a non-
business day) in additional shares of the same class of the Fund
at the net asset value per share, normally $1.00, determined as of
the close of business on that day, unless payment of the dividend
in cash has been requested.
Net income of a class of shares of a Money Market Fund consists of
all interest income accrued on portfolio assets less all expenses
of the Fund and the class and amortized market premium. Amortized
market discount is included in interest income. None of the Money
Market Funds anticipates that it will normally realize any long-
term capital gains with respect to its portfolio securities.
Normally each class of shares of the Money Market Funds will have
a positive net income at the time of each determination thereof.
Net income may be negative if an unexpected liability must be
accrued or a loss realized. If the net income of a class or
classes of shares of a Money Market Fund determined at any time is
a negative amount, the net asset value per share of such class or
classes will be reduced below $1.00 unless one or more of the
following steps, for which the Trustees have authority, are taken:
(1) reduce the number of shares in each shareholder's account of
the applicable class or classes, (2) offset each shareholder's pro
rata portion of negative net income against the shareholder's
accrued dividend account or against future dividends with regard
to the applicable class or classes, or (3) combine these methods
in order to seek to maintain the net asset value per share of the
applicable class or classes at $1.00. The Trustees may endeavor to
restore a Fund's net asset value per share to $1.00 by not
declaring dividends from net income on subsequent days until
restoration, with the result that the net asset value per share
will increase to the extent of positive net income which is not
declared as a dividend.
Should a Money Market Fund incur or anticipate, with respect to
its portfolio, any unusual or unexpected significant expense or
loss which would affect disproportionately the Fund's income for a
particular period, the Trustees would at that time consider
whether to adhere to the dividend policy described above or to
revise it in light of the then prevailing circumstances in order
to ameliorate, to the extent possible, the disproportionate effect
of such expense or loss on then existing shareholders. Such
expenses or losses may nevertheless result in a shareholder's
receiving no dividends for the period during which the shares are
held and receiving upon redemption a price per share lower than
that which was paid.
Other Funds
Each of the Funds other than the Money Market Funds will declare
and distribute dividends from net investment income of each class
of shares, if any, and will distribute its net realized capital
gains, with respect to each class of shares, if any, at least
annually.
Performance Information
Investors may use financial publications and/or indices to obtain a more
complete view of a Fund's performance. When comparing performance,
investors should consider all relevant factors, such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
a Fund uses in advertising may include: Morningstar, Inc., Lipper
Analytical Services, Inc., CDA Investment Technologies, Wisenberger
Dealer Services, Computer Directions Advisor Services, Inc., Moody's
Bond Survey Index, Salomon Brothers Corporate Bond Rate-of-Return Index,
Lehman Brothers Municipal Bond Index, Bond-20 Index, Standard & Poor's
Daily Stock Price Index of 500 Common Stocks, Dow Jones Industrial
Average, Lehman Brothers Government/Corporate (Total) Index, Merrill
Lynch 2-Year Treasury Index, Merrill Lynch 3-Year Treasury Index,
Donaghue's Money Fund Report, Lehman Brothers Intermediate
Government/Corporate Index, Lehman Brothers 5-Year Bond Index, and
Lehman Brothers Government (LT) Index. Advertisements may quote
performance information which does not reflect the effect of the sales
load. In addition, data may be used comparing the differences between
the yields of income funds, Ginnie Maes and U.S. Treasury notes. All
data is based on past performance and is not intended to indicate future
results.
Money Market Funds
Based on the seven-day period ended December 31, 1994 (the "base
period"), the yield and effective yield of the Trust Shares of each of
the Money Market Funds were as follows:
<TABLE>
<CAPTION>
Fund-Trust Shares Yield Effective Yield
<S> <C> <C>
Money Market Fund 5.33% 5.48%
Ohio Municipal Money Market Fund 4.11% 4.20%
U.S. Treasury Money Market Fund 5.21% 5.34%
</TABLE>
Based on the seven-day period ended December 31, 1994, (the "base
period"), the yield and effective yield of the Investment Shares of the
Money Market Funds listed below were as follows:
Fund-Investment Shares Yield Effective Yield
Money Market Fund 5.23% 5.37%
Ohio Municipal Money Market Fund 4.01% 4.09%
U.S. Treasury Money Market Fund 5.11% 5.24%
The yield for each class of shares of a Fund is computed by determining
the percentage net change, excluding capital changes, in the value of an
investment in one share of the class over the base period, and
multiplying the net change by 365/7 (or approximately 52 weeks). The
effective yield for each class of shares of a Fund represents a
compounding of the yield by adding 1 to the number representing the
percentage change in value of the investment during the base period,
raising the sum to a power equal to 365/7, and subtracting 1 from the
result.
Other Funds
(A) A Fund's yield for each class of shares is presented for a specified
30-day period (the "base period"). Yield is based on the amount
determined by (i) calculating the aggregate of dividends and interest
earned by the class during the base period less expenses accrued for
that period by the class, and (ii) dividing that amount by the product
of (A) the average daily number of shares of the class outstanding
during the base period and entitled to receive dividends and (B) the
offering price per share of the class on the last day of the base
period. The result is annualized on a compounding basis to determine the
yield of the class of shares of the Fund. For this calculation, interest
earned on debt obligations held by a Fund is generally calculated using
the yield to maturity (or first expected call date) of such obligations
based on their market values (or, in the case of receivables-backed
securities such as Ginnie Maes, based on cost). Dividends on equity
securities are accrued daily at their stated dividend rates.
The yield of Trust Shares of each of the following Funds for the 30-day
period ended December 31, 1994 was as follows:
Fund-Trust Shares Yield
Growth Fund 1.34%
Income Equity Fund 4.40%
Ohio Tax-Free Fund 4.75%
Fixed Income Securities Fund 7.35%
Short/Intermediate Fixed Income Securities Fund 7.13%
Mortgage Securities Fund 9.29%
The yield of Investment Shares of each of the following Funds based on
the maximum offering price per share of the Funds for the 30-day period
ended December 31, 1994 was as follows:
Fund-Investment Shares Yield
Growth Fund 1.05%
Ohio Tax-Free Fund 4.41%
Fixed Income Securities Fund 6.95%
Mortgage Securities Fund 8.84%
The average annual total returns for Trust Shares of each of the
following Funds for the one-year and five-year periods and for the life
of the respective Fund through December 31, 1994 were as follows:
<TABLE>
<CAPTION>
Fiscal Year Ended
Five-Years Ended Inception through
Fund-Trust Shares December 31, 1994
December 31, 1994 December 31, 1994
<S> <C> <C> <C>
Growth Fund 2.28% 7.67% 7.85%
Income Equity Fund (1.82%) 5.61% 5.73%
Ohio Tax-Free Fund (2.57%) 5.29% 5.55%
Fixed Income Securities Fund (4.62%) 6.95% 6.91%
Short/Intermediate Fixed Income Securities Fund (0.98%) 6.83% 6.94%
Mortgage Securities Fund (24.59%) N/A (2.78%)
</TABLE>
The average annual total returns for Investment Shares of each of the
following Funds for the one-year period and for the life of the
respective Fund through December 31, 1994 were as follows:
<TABLE>
<CAPTION>
Fiscal Year Ended Inception through
Fund-Investment Shares December 31, 1994 December 31, 1994
<S> <C> <C>
Growth Fund (2.00%) 4.83%
Ohio Tax-Free Fund (4.78%) 3.86%
Fixed Income Securities Fund (6.79%) 5.64%
Mortgage Securities Fund (26.19%) (3.73%)
</TABLE>
The average annual total return for each Fund is the average compounded
rate of return for a given period that would equate a $1,000 initial
investment to the ending redeemable value of that investment. The ending
redeemable value is computed by multiplying the number of shares owned
at the end of the period by the offering price value per share at the
end of the period. The number of shares owned at the end of the period
is based on the number of shares purchased at the beginning of the
period with $1,000, less any applicable sales load, adjusted over the
period by any additional shares, assuming the monthly/quarterly
reinvestment of all dividends and distributions. Any applicable
redemption fee is deducted from the ending value of the investment based
on the lesser of the original purchase price or the net asset value of
shares redeemed.
From time to time, Huntington and/or Federated may reduce its
compensation or assume expenses of a Fund in order to reduce the Fund's
expenses, as described in the Prospectus. Any such waiver or assumption
would increase a Fund's yield and total return during the period of the
waiver or assumption.
Tax-Equivalent Yield
With respect to the Ohio Funds, the Funds' tax-equivalent yield (or
effective yield) for each class of shares during the applicable base
period may be presented for shareholders in one or more stated tax
brackets. Tax-equivalent yield is calculated by adjusting a Fund's tax-
exempt yield with respect to the class by a factor designed to show the
approximate yield that a taxable investment would have to earn to
produce the same after-tax yield for that period. A Fund's tax-
equivalent yield with respect to each class will differ for shareholders
in different tax brackets.
The tax-equivalent yield for Trust Shares of the Ohio Municipal Money
Market Fund for the seven-day period ended December 31, 1994 was 6.29%
(assuming a 28% federal income tax bracket and a 5.201% Ohio income tax
bracket).
The tax-equivalent yield for the Trust Shares of the Ohio Tax-Free Fund
for the thirty-day period ended December 31, 1994 was 7.11% (assuming a
28% federal income tax bracket and a 5.201% Ohio income tax bracket).
The tax-equivalent yield for Investment Shares of the Ohio Municipal
Money Market Fund for the seven-day period ended December 31, 1994 was
6.12% (assuming a 28% federal income tax bracket and a 5.201% Ohio
income tax bracket).
The tax-equivalent yield for the Investment Shares of the Ohio Tax-Free
Fund for the thirty-day period ended December 31, 1994 was 6.60%
(assuming a 28% federal income tax bracket and a 5.201% Ohio income tax
bracket).
Ohio Municipal Money Market Fund and Ohio Tax-Free Fund
Tax-Equivalency Table
The Ohio Municipal Money Market Fund and the Ohio Tax-Free Fund, with
respect to both classes of shares, may use a tax-equivalency table in
advertising and sales literature. The interest earned on tax-exempt
securities in a Fund's portfolio generally remains free from federal
regular income tax and is free from Ohio personal income taxes.* The
table below provides tax-equivalent yields for selected tax-exempt
yields. As the table below indicates, a "tax-free" investment is an
attractive choice for investors, particularly in times of narrow spreads
between tax-free and taxable yields.
TAXABLE YIELD EQUIVALENT FOR 1995
STATE OF OHIO
FEDERAL TAX BRACKET:
15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL AND STATE TAX BRACKET:
19.457% 33.201% 37.900% 43.500% 47.100%
$1- $23,351- $56,551- $117,951- OVER
Single Return:$23,350 $56,550 $117,950 $256,500 $256,500
TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT
1.50% 1.86% 2.25% 2.42% 2.65% 2.84%
2.00% 2.48% 2.99% 3.22% 3.54% 3.78%
2.50% 3.10% 3.74% 4.03% 4.42% 4.73%
3.00% 3.72% 4.49% 4.83% 5.31% 5.67%
3.50% 4.35% 5.24% 5.64% 6.19% 6.62%
4.00% 4.97% 5.99% 6.44% 7.08% 7.56%
4.50% 5.59% 6.74% 7.25% 7.96% 8.51%
5.00% 6.21% 7.49% 8.05% 8.85% 9.45%
5.50% 6.83% 8.23% 8.86% 9.73% 10.40%
6.00% 7.45% 8.98% 9.66% 10.62% 11.34%
NOTE: THE MAXIMUM MARGINAL TAX RATE FOR EACH BRACKET WAS USED IN
CALCULATING THE TAXABLE YIELD EQUIVALENT. FURTHERMORE, ADDITIONAL STATE
AND LOCAL TAXES PAID ON COMPARABLE TAXABLE INVESTMENTS WERE NOT USED TO
INCREASE FEDERAL DEDUCTIONS.
TAXABLE YIELD EQUIVALENT FOR 1995
STATE OF OHIO
FEDERAL TAX BRACKET:
15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL AND STATE TAX BRACKET:
20.201% 34.900% 37.900% 43.500% 47.100%
$1- $39,001- $94,251- $143,601- OVER
Joint Return:$39,000 $94,250 $143,600 $256,500 $256,500
TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT
1.50% 1.88% 2.30% 2.42% 2.65% 2.84%
2.00% 2.51% 3.07% 3.22% 3.54% 3.78%
2.50% 3.13% 3.84% 4.03% 4.42% 4.73%
3.00% 3.76% 4.61% 4.83% 5.31% 5.67%
3.50% 4.39% 5.38% 5.64% 6.19% 6.62%
4.00% 5.01% 6.14% 6.44% 7.08% 7.56%
4.50% 5.64% 6.91% 7.25% 7.96% 8.51%
5.00% 6.27% 7.68% 8.05% 8.85% 9.45%
5.50% 6.89% 8.45% 8.86% 9.73% 10.40%
6.00% 7.52% 9.22% 9.66% 10.62% 11.34%
NOTE: THE MAXIMUM MARGINAL TAX RATE FOR EACH BRACKET WAS USED IN
CALCULATING THE TAXABLE YIELD EQUIVALENT. FURTHERMORE, ADDITIONAL STATE
AND LOCAL TAXES PAID ON COMPARABLE TAXABLE INVESTMENTS WERE NOT USED TO
INCREASE FEDERAL DEDUCTIONS.
The above charts, which are based on the federal income tax schedule
effective January 1, 1995, are for illustrative purposes only. They are
not indicators of past or future performance of a Fund.
* Some portion of a Fund's income may result in liability under the
federal alternative minimum tax and may be subject to state and local
taxes.
Custodian
The Huntington Trust Company N.A. is the custodian of the Trust's
assets. The custodian's responsibilities include safeguarding and
controlling the Trust's cash and securities, handling the receipt and
delivery of securities, and collecting interest and dividends on the
Trust's investments. The custodian does not determine the investment
policies of the Funds or decide which securities the Funds will buy or
sell. The custodian's fees for custody and recordkeeping services are
based on a percentage of the average daily net assets of the Funds.
Transfer Agent and Dividend Disbursing Agent
Federated Services Company serves as transfer agent and dividend
disbursing agent for the Funds. The fee paid to the transfer agent is
based upon the size, type and number of accounts and transactions made
by shareholders.
Federated Services Company also maintains the Funds' accounting records.
The fee paid for this service is based upon the level of the Funds'
average net assets for the period plus out-of-pocket expenses.
Independent Public Accountants
The independent public accountants for the Trust are Price Waterhouse
LLP, Columbus, Ohio.
Additional Information About the Trust and Its Shares
The Trust is not required to hold annual meetings of shareholders for
the purpose of electing Trustees except that (i) the Trust is required
to hold a shareholders' meeting for the election of Trustees at such
time as less than a majority of the Trustees holding office have been
elected by shareholders and (ii) if, as a result of a vacancy on the
Board of Trustees, less than two-thirds of the Trustees holding office
have been elected by the shareholders, that vacancy may only be filled
by a vote of the shareholders. In addition, Trustees may be removed from
office by a written consent signed by the holders of shares representing
two-thirds of the outstanding shares of the Trust at a meeting duly
called for the purpose, which meeting must be held upon written request
of not less than 10% of the outstanding shares of the Trust. Upon
written request by the holders of shares representing 1% of the
outstanding shares of the Trust stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a
Trustee, the Trust will provide a list of shareholders or disseminate
appropriate materials (at the expense of the requesting shareholders).
Except as set forth above, the Trustees may continue to hold office and
may appoint successor Trustees.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the
Trust. However, the Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered
into or executed by the Trust or the Trustees. The Declaration of Trust
provides for indemnification out of a Fund's property for all loss and
expense of any shareholder held personally liable for the obligations of
a Fund. Thus the risk of a shareholder's incurring financial loss on
account of shareholder liability is limited to circumstances in which
the Fund would be unable to meet its obligations.
Shareholder Inquiries
Shareholder inquiries regarding those Funds offering Trust Shares should
be directed to The Huntington Trust Company, N.A., 41 South High Street,
Columbus, Ohio 43215, Attn: Mutual Fund Services Center.
Shareholder inquiries regarding those Funds offering Investment Shares
should be directed to The Huntington Investment Company, 41 South High
Street, Columbus, Ohio 43287.
Pending Litigation Relating to Piper
Several complaints have been filed in federal court against Piper,
certain affiliated companies, and certain individuals affiliated with
Piper. An Amended Consolidated Class Action Complaint, representing a
consolidation of a number of previously filed complaints, was filed on
October 5, 1994 in the United States District Court for the District of
Minnesota, by Richard J. Rodney, Jr., Doug Shonka, Carl Patrick Monahan,
Jerry Hoehnen, Rosemary Boris, Thomas W. Newcome, Delvin D. Junker,
Printing Mailing Trade District, affiliated with the Newspaper Drivers'
Division of the International Brotherhood of the Teamsters, The History
Theater, Inc., Paul Gold and Bernard Friedman. The complaint alleges
certain violations of federal and state securities laws, common law
negligent misrepresentation and breach of fiduciary duty. A similar
complaint was filed in the same court against the same parties on
October 21, 1994, by Eltrax Systems, Inc. A third complaint was filed on
September 30, 1994, in the United States District Court for the District
of Colorado. The complaint alleges certain violations of federal and
state securities laws and common law fraud. Plaintiffs in the complaint
are Gary Pashel and Gregg S. Hayutin, Trustees of the Mae Pashel Trust;
Mae Pashel, individually; Gary Pashel and Michael H. Feinstein, Trustees
of the Robert Hayutin Insurance Trust; and Dennis E. Hayutin, Gregg S.
Hayutin and Gary Pashel, Trustees of the Marie Ellen Hayutin Trust. An
additional complaint has been filed in United States District Court for
the District of Minnesota relating to two closed-end investment
companies managed by Piper. Piper intends to defend these lawsuits
vigorously. These complaints do not involve the Mortgage Securities
Fund.
Financial Statements
The financial statements for the fiscal year ended December 31, 1994,
are incorporated herein by reference to the Trust's Combined Annual
Report dated December 31, 1994. A copy of this Report may be obtained
without charge by contacting the Trust.
Appendix
Standard & Poor's Ratings Group Corporate and Municipal Bond Rating
Definitions
AAA-Debt rated "AAA" has the highest rating assigned by Standard &
Poor's Ratings Group. Capacity to pay interest and repay principal is
extremely strong.
AA-Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A-Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effect
of changes in circumstances and economic conditions than debt in higher
rated categories.
S&P may apply a plus (+) or minus (-) to the above rating
classifications to show relative standing within the classifications.
Moody's Investors Service, Inc. Corporate and Municipal Bond Rating
Definitions
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long term risks
appear somewhat larger than in Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Duff & Phelps, Inc. Corporate Bond Rating Definitions
AAA-Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+, AA, AA- -High credit quality protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic
conditions.
A+, A, A- -Protection factors are average but adequate. However, risk
factors are more variable and greater in periods of economic stress.
Fitch Investors Service, Inc. Corporate Bond Rating Definitions
AAA-Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably
foreseeable events. AA-Bonds considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and
repay principal is very strong, although not quite as strong as bonds
rated "AAA". Because bonds rated in the "AAA" and "AA" categories are
not significantly vulnerable to foreseeable future developments, short-
term debt of these issues is generally rated "F-1+." A-Bonds considered
to be investment grade and of high credit quality. The obligor's ability
to pay interest and repay principal is considered to be strong, but may
be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
IBCA Long-Term Rating Definitions
AAA-Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
significantly.
AA-Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial
conditions may increase investment risk albeit not very significantly.
A-Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong,
although adverse changes in business, economic or financial conditions
may lead to increased investment risk.
Standard & Poor's Ratings Group Short-Term Municipal Obligation Rating
Definitions
SP-1-Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2-Satisfactory capacity to pay principal and interest.
Moody's Investors Service, Inc. Short-Term Municipal Obligation Rating
Definitions
MIG1/VMIG1-This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support,
or demonstrated broad-based access to the market for refinancing.
MIG2/VMIG2-This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
IBCA Short-Term Rating Definitions
A1+-Obligations supported by the highest capacity for timely repayment.
A1-Obligations supported by a very strong capacity for timely repayment.
A2-Obligations supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
Standard and Poor's Ratings Group Commercial Paper Rating Definitions
A-1-This designation indicates that the degree of safety regarding
timely payment strong. Those issues determined to have extremely strong
safety characteristics are denoted with a plus (+) sign.
A-2-Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated "A-1".
Moody's Investors Service , Inc. Commercial Paper Rating Definitions
P-1-Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior capacity for repayment of senior short-term promissory
obligations. P-1 repayment capacity will normally be evidenced by many
of the following characteristics:
o Leading market positions in well-established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
o Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
o Well-established access to a range of financial markets and
assured sources of alternate liquidity.
P-2-Issuers (or supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of senior short-term debt obligations.
This will normally be evidenced by many of the characteristics cited
above, but to a lesser degree. Earnings trends and coverage ratios,
while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
NR indicates the bonds are not currently rated by Moody's or S&P.
However, management considers them to be of good quality.
Duff & Phelps, Inc. Commercial Paper Rating Definitions
Duff 1+-Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.
Duff 1-Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk
factors are minor. Duff 1-High certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors.
Risk factors are very small. Duff 2-Good certainty of timely payment.
Liquidity factors and company fundamentals are sound. Although ongoing
funding needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
Fitch Investors Service, Inc. Commercial Paper Rating Definitions
Plus or minus signs are used with a rating symbol to indicate the
relative portion of the credit within the rating category:
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely
payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues
rated F1+.
F-2: Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the margin of
safety is not as great as for issues assigned F-1+ or F-1 ratings.
609409107 609409701
609409875 609409404
609409305 609409834
609409867 609409800
609409503 609409826
609409768 609409776
609409602 609409784
609409842 609409883
1032204B (4/95)