<PAGE>
MONITOR FUNDS
Supplement dated March 8, 1996
to Prospectus dated April 30, 1995
Trust Shares
This supplement provides new and additional information beyond that contained in
the Prospectus and should be retained and read in conjunction with such
Prospectus. This supplement supersedes and replaces any existing supplements to
the Prospectus.
The following replaces the Annual Trust Shares Operating Expenses table for the
Mortgage Securities Fund (the "Fund") found on page 3 of the Prospectus. Please
refer to the Prospectus for expense information for the other portfolios of the
Monitor Funds.
Annual Trust Shares Operating Expenses (as a percentage of average net assets)
<TABLE>
<CAPTION>
Net
Management 12b-1 Other Total Trust Shares
Fees (1) Fees Expenses (2) Operating Expenses
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortgage Securities Fund (3*)................. .15% None .52% .67%
- -----------------------------------------------------------------------------------------------------------------------
</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 Mortgage Securities Fund
in the table above have been incurred during the fiscal year ending December 31,
1995. Absent the voluntary waiver of the management fee, the total fund
operating expenses would be 1.02%. The maximum management fee is 0.50%.
*The advisor can terminate its voluntary waiver at any time at its sole
discretion.
Example:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Mortgage Securities Fund................ $7 $21 $37 $83
</TABLE>
Effective January 11, 1996 all references in the prospectuses dated April
30, 1995 of Monitor Funds (the "Trust") to "Federated Administrative Services"
as administrator and "Federated Securities Corp." as distributor of the Trust
are hereby replaced with SEI Financial Management Corporation and SEI Financial
Services Company, respectively.
The information provided in the "Administration of Funds" section of the
Trust's prospectuses dated April 30, 1995 is hereby replaced in its entirety
with the following: "As Administrator of the Trust, SEI Financial Management
Corporation is entitled to receive an annual administrative fee at a maximum
rate of .11% of each Portfolio's average daily net assets for services performed
under the Administration Agreement dated January 11, 1996 between SEI Financial
Management Corporation and the Trust, SEI Financial Management Corporation and
SEI Financial Services Company are located at 680 E. Swedesford Road, Wayne, PA
19087".
Effective February 9, 1996 all references to "Federated Services Company"
as transfer agent and dividend disbursing agent of the Trust are hereby replaced
with SEI Financial Management Corporation.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
MONITOR FUNDS
Supplement dated March 8, 1996
to Prospectus dated April 30, 1995
Investment Shares
This supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
such Prospectus. This supplement supersedes and replaces any existing
supplements to the Prospectus.
The following replaces the Annual Investment Shares Operating Expenses table for
the Mortgage Securities Fund (the "Fund") found on page 3 of the Prospectus.
Please refer to the Prospectus for expense information for the other portfolios
of the Monitor Funds.
Annual Investment Shares Operating Expenses (as a percentage of average net
assets)
<TABLE>
<CAPTION>
Total Investment Shares
Net Operating Expenses
Management 12b-1 Other Net of any Waivers
Fees(1) Fees(2) Expenses(3) or Reimbursements
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortgage Securities Fund (4*). .15% .25% .52% .92%
- -----------------------------------------------------------------------------------------------------------------------------
</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 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 Fund and up to 0.50 of 1% for the Mortgage Securities Fund to the
average daily net assets attributable to Investment Shares are permitted under
the Distribution Plans. The Distributor can terminate these voluntary waivers at
any time at its sole discretion. 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 Mortgage Securities in
the table above have been incurred during the fiscal year ending December 31,
1995. Absent the voluntary waiver of management and 12b-1 fees, the total fund
operating expenses would be 1.52%. The maximum management fee is 0.50%.
*The adviser can terminate its voluntary waiver at any time at its sole
discretion.
Example:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Mortgage Securities Fund................ $29 $48 $70 $131
</TABLE>
Effective January 11, 1996 all references in the prospectuses dated April
30, 1995 of Monitor Funds (the "Trust") to "Federated Administrative Services"
as administrator and "Federated Securities Corp." as distributor of the Trust
are hereby replaced with SEI Financial Management Corporation and SEI Financial
Services Company, respectively.
The information provided in the "Administration of Funds" section of the
Trust's prospectuses dated April 30, 1995 is hereby replaced in its entirety
with the following: "As Administrator of the Trust, SEI Financial Management
Corporation is entitled to receive an annual administrative fee at a maximum
rate of .11% of each Portfolio's average daily net assets for services performed
under the Administration Agreement dated January 11, 1996 between SEI Financial
Management Corporation and the Trust. SEI Financial Management Corporation and
SEI Financial Services Company are located at 680 E. Swedesford Road, Wayne, PA
19087".
Effective February 9, 1996 all references to "Federated Services Company"
as transfer agent and dividend disbursing agent of the Trust are hereby replaced
with SEI Financial Management Corporation.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
