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Rule 497(c)
Reg. No 33-11905
PROSPECTUS
THE MONITOR MICHIGAN TAX-FREE FUND--INVESTMENT SHARES
The Investment Shares of The Monitor Michigan Tax-Free Fund (the "Fund")
offered by this Prospectus represent interests in a non-diversified portfolio
of securities that is one of a series of ten investment portfolios in The
Monitor Funds, a Massachusetts business trust (the "Trust") which is an open-
end management investment company (a mutual fund). Investment Shares may be
purchased through The Huntington Investment Company, Huntington Personal
Bankers or the Investor Services Department pursuant to agreements between The
Huntington Investment Company or The Huntington National Bank, and SEI
Investments Distribution Co. (the "Distributor"), the Trust's distributor.
The investment objective of the Fund is to provide current income exempt
from both federal and Michigan personal income taxes. The Fund will pursue
this objective by investing primarily in debt obligations with short to
intermediate remaining maturities (less than 15 years) issued by or on behalf
of the State of Michigan and its political subdivisions, agencies and
instrumentalities or by other issuers outside the State of Michigan if such
obligations pay interest that, in the opinion of counsel to the issuer, is
exempt from federal and Michigan personal income tax.
The Fund is offered in two classes of shares, Investment Shares and Trust
Shares. This Prospectus relates only to Investment Shares of the Fund. This
Prospectus sets forth concisely what a shareholder should know before
investing in Investment Shares of the Fund and should be read carefully and
retained for future reference. The Combined Statement of Additional
Information dated April 30, 1997, as supplemented on November 20, 1997, 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, AS
SUPPLEMENTED, CALL THE INVESTOR SERVICES DEPARTMENT AT: (IN OHIO) 614-480-5580
OR (OUTSIDE THE 614 AREA CODE) 800-253-0412.
THE HUNTINGTON NATIONAL BANK
Investment Adviser
SEI FUND RESOURCES
Administrator
SEI INVESTMENTS DISTRIBUTION CO.
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
ACCURACY 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 NATIONAL BANK,
NOR ARE THEY INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN
INVESTMENT IN THE 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.
November 20, 1997
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TABLE OF CONTENTS
PAGE
GENERAL INFORMATION............................................................1
Risk Factors..................................................................1
FEE TABLE AND EXAMPLE..........................................................2
INVESTMENT OBJECTIVE AND POLICIES..............................................2
ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES.................3
Michigan Municipal Obligations................................................3
Non-Diversification...........................................................4
Defensive Investment Strategies...............................................4
U.S. Government Securities....................................................4
Bank and Savings and Loan Obligations.........................................5
Commercial Paper..............................................................5
Repurchase Agreements.........................................................5
Variable and Floating Rate Demand and Master Demand Notes.....................5
When-Issued and Delayed Delivery Transactions.................................6
Lending of Portfolio Securities...............................................6
Options and Futures Contracts.................................................7
INVESTMENT RESTRICTIONS........................................................8
HOW THE FUND VALUES SHARES.....................................................8
HOW TO BUY INVESTMENT SHARES...................................................9
To Place an Order.............................................................9
Minimum Investment Required..................................................10
What Shares Cost.............................................................10
Purchases At Net Asset Value................................................10
Dealer Concession...........................................................10
Reducing the Sales Charge...................................................11
Quantity Discounts and Accumulated Purchases................................11
Letter of Intent............................................................11
PAGE
Reinstatement Privilege.....................................................12
Concurrent Purchases........................................................12
Systematic Investment Program................................................12
HOW TO EXCHANGE INVESTMENT SHARES AMONG THE FUNDS.............................13
By Telephone.................................................................13
By Mail......................................................................14
HOW TO REDEEM INVESTMENT SHARES...............................................14
Redeeming by Telephone.......................................................15
Redeeming by Mail............................................................15
Redeeming by Fax.............................................................16
SYSTEMATIC WITHDRAWAL PROGRAM.................................................16
ACCOUNTS WITH LOW BALANCES....................................................16
MANAGEMENT OF THE TRUST.......................................................17
Distribution of Investment Shares............................................17
Distribution Plan............................................................18
Shareholder Servicing Arrangements..........................................18
Administration of the Fund...................................................19
Custodian, Recordkeeper, Transfer Agent, and Dividend Disbursing Agent.......19
Independent Auditors.........................................................19
DISTRIBUTIONS AND TAXES.......................................................19
Distribution Options.........................................................19
Federal Income Taxes.........................................................19
Michigan Taxes...............................................................21
ORGANIZATION OF THE TRUST.....................................................21
Voting Rights................................................................22
PERFORMANCE DATA AND COMPARISONS..............................................22
SHAREHOLDER INQUIRIES.........................................................23
OTHER CLASSES OF SHARES.......................................................23
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GENERAL INFORMATION
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 (individually, a "fund," or collectively, the "funds"). 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 all of the funds. This
Prospectus relates solely to the Investment Shares of The Monitor Michigan
Tax-Free Fund (the "Fund").
For information on how to purchase Investment Shares of the Fund, please
refer to "How to Buy Investment Shares." A minimum initial investment of
$1,000 is required for the Fund. Subsequent investments in the Fund must be in
amounts of at least $50. Investment Shares of the Fund are sold at net asset
value plus a sales charge, where applicable. Shares of the Fund are redeemed
at net asset value. Information on redeeming shares may be found under "How to
Redeem Investment Shares." The Fund is advised by The Huntington National Bank
("Huntington" or the "Adviser").
RISK FACTORS
Investors should be aware of the following general observations. The market
value of fixed-income securities, which constitute a major part of the
investments of the Fund, may vary inversely in response to changes in
prevailing interest rates ("interest rate risk"). The Fund 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 and
purchasing securities on a when-issued or delayed delivery basis. These
investments and investment techniques may increase the volatility of the
Fund's net asset value. Their risks are described under "Additional
Information on Portfolio Investments and Strategies."
The performance of the Fund is closely tied to conditions within the State
of Michigan. The economy of Michigan is principally dependent on three
sectors--manufacturing (particularly durable goods, automotive products and
office equipment), tourism and agriculture. Michigan encountered financial
difficulties during the late 1980s, largely as a result of poor conditions in
the automotive industry, but recovered from the prolonged downturn in
production levels in this sector in the early 1990s. Structural changes in the
automotive industry have given the Michigan economy greater financial
stability. The state's finances continue to be in excellent condition, and a
Budget Stabilization Fund that exceeds $1 billion should help the state
weather any potential economic recessions. At the end of 1996, after several
years of rapid growth, the Michigan economy was evidencing continued growth
and unemployment levels were lower than they had been for the past several
years. The market value and the marketability of bonds issued by local units
of government in the state may be affected adversely by the same factors that
affect Michigan's economy generally. The ability of the State and its local
units of government to pay the principal of and interest on their bonds may
also be affected by such factors and by certain constitutional, statutory and
charter limitations. For additional information on the risks associated with
the Fund, see "Investment Objectives and Policies of the Trust--Michigan
Municipal Obligations" in the Combined Statement of Additional Information, as
supplemented (the "SAI").
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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>
<S> <C>
Maximum sales load imposed on purchases (as a percentage of offering
price).................................................................. 2.00%
</TABLE>
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
TOTAL
INVESTMENT
SHARES
MANAGEMENT 12B-1 OTHER OPERATING
FEES (1) FEES (2) EXPENSES (3) EXPENSES
---------- -------- ------------ ----------
<S> <C> <C> <C> <C>
Michigan Tax-Free Fund.............. 0.50% 0.25% 0.30% 1.05%
</TABLE>
- --------
(1) Fees paid by the Fund for investment advisory services. See "Management of
the Trust."
(2) Fees paid by Investment Shares of the Fund for distribution services
provided with respect to Investment Shares. Total payments of up to 0.25
of 1% of the average daily net assets attributable to Investment Shares
are permitted under the Distribution Plan. The Distributor may waive a
portion of such fee, but can terminate any such voluntary waiver at any
time in its sole discretion. See "Management of the Trust--Distribution
Plan."
(3) Represents all other estimated expenses of the Fund including
administration fees, custodian fees, transfer agent fees and dividend
disbursing agent fees. See "Management of the Trust--Administration of the
Funds."
EXAMPLE:
A shareholder 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 the maximum sales load:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Michigan Tax-Free Fund.......................... $31 $53 $78 $148
</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.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to provide investors with current
income exempt from both federal and Michigan personal income taxes. The Fund
will attempt to achieve this objective by investing primarily in debt
obligations with short-to-intermediate remaining maturities (less than 15
years) issued by or on behalf of the State of Michigan and its political
subdivisions, agencies, and instrumentalities or by other issuers outside the
State of Michigan if such obligations pay interest that, in the opinion of
counsel to the issuer, is exempt from both federal and Michigan personal
income tax ("Michigan tax-exempt securities"). The Fund may also invest in
numerous types of short-term Michigan tax-exempt securities that 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. As a matter of fundamental policy, under normal market conditions at
least 65% of the Fund's net assets will be invested in Michigan tax-exempt
securities. In addition, the Fund will not, as a matter of fundamental policy,
invest more than 20% of its net assets in Michigan tax-exempt 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.
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The Fund will invest only in Michigan tax-exempt securities that at the time
of purchase are rated in one of the top four categories by a nationally
recognized statistical rating organization ("NRSRO") or, if unrated, are
determined by the Adviser to be of comparable quality. See the Appendix to the
SAI for a description of rating categories. The lowest rated investment-grade
securities are deemed to have speculative characteristics. The Fund does not
anticipate holding Michigan tax-exempt securities whose ratings have fallen
below the top four categories of an NRSRO, and will attempt to sell such
securities, depending on current market conditions.
From time to time, the Fund may invest in obligations the interest on which
is subject to federal income tax or Michigan personal income taxes, pending
investment in Michigan tax-exempt securities or for liquidity or defensive
purposes. The Fund may also hold a portion of its assets in cash or money
market instruments such as bank obligations, U.S. Government securities,
commercial paper or repurchase agreements. There can, of course, be no
guarantee that the Fund will achieve its investment objective.
The Fund's investment objective is fundamental and may be changed only by a
vote of a majority of the outstanding shares. Unless otherwise noted in this
Prospectus or in the Statement of Additional Information, the investment
policies of the Fund are not fundamental and may be changed by the Trust's
Board of Trustees (the "Trustees"). Any percentage limitation on the 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 the NRSROs utilized by Huntington in managing
the Fund's investments see the Appendix to the SAI.
ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES
MICHIGAN TAX-EXEMPT SECURITIES
The tax-exempt securities which the Fund may purchase include fixed and
floating rate and variable rate municipal obligations, participation interests
in municipal bonds, tax-exempt commercial paper, short-term municipal notes,
and stand-by commitments. The Fund's concentration in investments in Michigan
tax-exempt securities will subject the Fund to greater risk with respect to
its portfolio securities than an investment company that is permitted to
invest in a broader range of investments, because changes in the financial
condition or market assessment of issuers of Michigan tax-exempt securities
generally may cause substantial fluctuations in the Fund's yield and price of
Fund shares. Also, political or economic developments that affect one such
security might affect the other securities. See "Investment Objectives and
Policies of the Trust--Michigan Tax-Exempt Securities" in the SAI.
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
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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.
NON-DIVERSIFICATION
As a non-diversified fund under the 1940 Act, the Fund may invest its assets
in the obligations of fewer issuers than would be the case if it was
"diversified". The Fund's ability to invest a relatively high percentage of
its assets in the securities of a limited number of issuers involves an
increased risk of loss to the 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 1940 Act, the Fund
intends to comply with the diversification requirements of Subchapter M of the
Internal Revenue Code. This undertaking requires, among other things, that at
the end of each quarter of the taxable year, with regard to at least 50% of
the 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 the 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 the Fund's assets. In implementing these
temporary "defensive" strategies, the 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. These alternative strategies may give rise to
income which is not exempt from federal or state taxes.
U.S. GOVERNMENT SECURITIES
U.S. Government securities are securities that 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.
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BANK AND SAVINGS AND LOAN OBLIGATIONS
These obligations include negotiable certificates of deposit, fixed time
deposits, bankers' acceptances, and interest bearing demand accounts. The Fund
limits its bank investments to dollar-denominated obligations of U.S.,
Canadian, Asian or European banks which have more than $500 million in total
assets at the time of investment or of United States savings and loan
associations which have more than $1 billion in total assets at the time of
investment and, in the case of U.S. banks, are members of the Federal Reserve
System or are examined by the Comptroller of the Currency or whose deposits
are insured by the FDIC.
COMMERCIAL PAPER
Commercial paper includes short-term unsecured promissory notes, and
variable floating rate demand notes issued by domestic and foreign bank
holding companies, corporations and financial institutions as well as similar
taxable and tax-exempt instruments issued by government agencies and
instrumentalities.
REPURCHASE AGREEMENTS
Certain securities in which the 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 the Fund and agree at the time of
sale to repurchase them at a mutually agreed upon time and price. The 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 the Fund, the
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 the Fund might be delayed
pending court action. The Trustees believe that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor
of the Fund and allow retention or disposition of such securities. The 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.
VARIABLE AND FLOATING RATE DEMAND AND MASTER DEMAND NOTES
The Fund may, from time to time, buy variable or floating rate demand notes
issued by corporations, bank holding companies and financial institutions and
similar taxable and tax-exempt instruments issued by government agencies and
instrumentalities. These securities typically will have a nominal maturity of
over one year but will give the holder the right to "put" the securities to a
remarketing agent or other entity at designated time intervals and on
specified notice. The obligation of the issuer of the put to repurchase the
securities may be backed by a letter of credit or other obligation issued by a
financial institution. The purchase price is ordinarily par plus accrued and
unpaid interest. Generally, the remarketing agent will adjust the interest
rate every seven days (or at other specified intervals) in order to maintain
the interest rate at the prevailing rate for securities with a seven-day or
other designated maturity.
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The Fund also may buy variable rate master demand notes. The terms of these
obligations permit the Fund to invest fluctuating amounts at varying rates of
interest pursuant to direct arrangements between the Fund, as lender, and the
borrower. These instruments permit weekly and, in some instances, daily
changes in the amounts borrowed. The Fund has the right to increase the amount
under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the
full amount of the note without penalty. The notes may or may not be backed by
bank letters of credit. Because the notes are direct lending arrangements
between the Fund and borrower, it is not generally contemplated that they will
be traded, and there is no secondary market for them, although they are
redeemable (and, thus, immediately repayable by the borrower) at principal
amount, plus accrued interest, at any time. In connection with any such
purchase and on an ongoing basis, the Adviser will consider the earning power,
cash flow and other liquidity ratios of the issuer, and its ability to pay
principal and interest on demand, including situations in which all holders of
such notes make demand simultaneously. While master demand notes, as such, are
not typically rated by NRSROs, if not so rated, the Fund may, under its
minimum rating standards, invest in them only if, at the time of an
investment, the issuer meets the criteria set forth in this Prospectus for
commercial paper obligations.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may purchase securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which the Fund purchases securities
with payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the 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, the Fund may pay
more or less than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the Fund's adviser
deems it appropriate to do so.
LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend its portfolio
securities on a short-term basis to brokers, dealers or other financial
institutions. The 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 the 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 the 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.
OPTIONS AND FUTURES CONTRACTS
The 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. The Fund receives a
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premium from writing a call or put option, which increases the Fund's return
if the option expires unexercised or is closed out at a net profit. The Fund
may also buy and sell put and call options on its securities for hedging
purposes. When the 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, the 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. The 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.
The 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. The 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 the Fund owns or expects to purchase. The
Fund may also purchase and sell put and call options on index futures or
directly on the underlying indices for hedging purposes. In addition, the Fund
may purchase and sell futures contracts and related options on individual debt
securities which the Fund owns or expects to purchase, if and when such
futures contracts and options become available.
In connection with its futures transactions, the 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. The 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 the Fund's existing futures contracts and options written by the Fund plus
premiums paid for outstanding options on futures contracts purchased by the
Fund, would exceed 5% of a Fund's net assets.
Options and futures transactions involve various risks, including the risk
that the 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 the Fund is dependent upon,
among other things, the Fund's ability to terminate options and futures
positions at times when Huntington deems it desirable to do so. Although the
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 the Fund will be able to effect
closing transactions at a particular time or at an acceptable price.
The Fund generally expects that their options and futures transactions will
be conducted on recognized exchanges. In certain instances, however, the Fund
may purchase and sell options in the over-the-counter ("OTC") markets. The
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 the Fund. The Fund will, however, engage in OTC market
transactions only when appropriate exchange-traded transactions are
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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 SAI.
INVESTMENT RESTRICTIONS
The Fund is a non-diversified fund, which means that it may invest more than
5% of its total assets in the securities of any one issuer. The 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 the Fund only by a
vote of a majority of the outstanding shares of the Fund.
The Fund will not:
(1) Invest 25% or more of the value of its total assets in Michigan tax-
exempt securities 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 a Michigan state-wide, national or
international development) affecting one such tax-exempt security 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 may not result from investment;
(2) 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
(3) Borrow money or pledge or mortgage its assets, except that the Fund may
borrow from banks up to 10% of the current value of its total net
assets for temporary or emergency purposes and those borrowings may be
secured by the pledge of not more than 15% of the current value of its
total net assets (but investments may not be purchased by the Fund
while any such borrowings are outstanding).
(4) Make loans, except loans of portfolio securities and except that the
Fund may enter into repurchase agreements with respect to its portfolio
securities and may purchase the types of debt instruments described in
this Prospectus. To increase current income, the Fund may lend
portfolio securities comprising up to 5% of total assets to brokers,
dealers and financial institutions, provided certain conditions are
met, including the condition that each loan is secured continuously by
collateral maintained on a daily market-to-market basis in an amount at
least equal to the current market value of the securities loaned.
HOW THE FUND VALUES SHARES
The net asset value for Investment Shares of the Fund is determined by
adding the interest of the Investment Shares in the market value of all
securities and other assets of the Fund, subtracting the interest of the
Investment Shares in the liabilities of the Fund and those attributable to
Investment
8
<PAGE>
Shares, and dividing the remainder by the total number of Investment Shares
outstanding. The net asset value of the Fund's Investment Shares will differ
from that of Trust Shares due to the expense of the Rule 12b-1 fee applicable
to the Fund's Investment Shares.
Securities for which market quotations are readily available are stated at
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 Fund calculates 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 the 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; (iii) the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day; and (iv)
other civil holidays when the Federal Reserve Banks or the financial markets
are closed, such as Veterans' Day and Martin Luther King Day.
HOW TO BUY INVESTMENT SHARES
Investment Shares of the Fund may be purchased through The Huntington
Investment Company, Huntington Personal Bankers or the Investor Services
Department (collectively, the "Huntington Group") pursuant to agreements
between The Huntington Investment Company or The Huntington National Bank and
the Distributor. Investors may purchase Investment Shares of the Fund on all
Business Days. In connection with the sale of the 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 the Fund or either class of its shares. During the period of any such
suspension and depending on the reasons for the suspension, persons who are
already shareholders of the 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 Fund will issue certificates representing
Investment Shares only upon request.
TO PLACE AN ORDER
To purchase Investment Shares of the Fund, 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 Investor Services
Department at (in Ohio) 614-480-5580 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 Fund, designating
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<PAGE>
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 Fund's transfer agent, SEI Investments Management Corporation (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. 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 the 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 the Fund is $1,000.
Subsequent investments must be in amounts of at least $50.
WHAT SHARES COST
Investment Shares of the Fund 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, the Distributor has agreed to waive all sales loads
imposed on purchases of Investment Shares of the Fund by the following
persons: (a) current officers, directors, employees (and their spouses or
immediate family members) and retired officers and employees (including their
spouses) of Huntington Bancshares Incorporated or any of its subsidiaries; (b)
persons who participate in certain financial services programs offered by the
banking subsidiaries of Huntington Bancshares Incorporated; and (c) persons
who are current members of certain affinity groups (such as trade associations
or membership associations) that have entered into written agreements with the
Trust's Investment Advisor and the Distributor providing for such a sales load
waiver. Potential investors who believe that they are eligible for this sales
load waiver may contact the Investor Services Department (1-800-253-0412) for
further information.
Dealer Concession. For sales of Investment Shares of the Fund, 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 offer to pay cash, or
10
<PAGE>
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 Fund, 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 Fund 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 Fund.
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 an investor, the investor's spouse, and the
investor's 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 one of the funds which
imposes a sales charge is made, the Distributor will aggregate such additional
purchases with previous purchases of Investment Shares of all other funds
imposing a sales charge, provided that the prior purchases are still invested
in one or more of 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 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 $500,000 of
Investment Shares in the Fund, 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 $750,000 in Investment Shares of the Fund at the time of signing the
Letter of Intent, purchases $500,000 of Investment Shares of the Fund. The
investor would pay an initial sales charge of 1.50% (the sales
11
<PAGE>
charge applicable to purchases of $500,000), and 0.75% of the investment
(representing the difference between the 1.50% sales charge applicable to
purchases of $500,000 and the 0.75% in sales charges already paid) would be
held in escrow until the investor has purchased the remaining $250,000 or more
of Investment Shares under the 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 the investor 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 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 Investment Shares 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 series of the Trust, the public offering
price of which includes a sales charge. 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 the Fund
may add to their investment on a regular basis in minimum amounts of at least
$50. Under this program, monies will be automatically withdrawn periodically
from the shareholder's banking account and invested in Investment Shares of
the 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.
If the shareholder's automatic investment program payment does not clear,
the purchase will be cancelled and the shareholder may be charged a fee and
will be liable for any losses incurred. Any subsequent such occurrences may
result in the cancellation of the automatic investment program feature of the
shareholder's account.
12
<PAGE>
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.
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.
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 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 Investor Services Department at (in Ohio) 614-480-5580 or
(outside the 614 Area Code) 800-253-0412. Investors may request the
13
<PAGE>
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 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 Fund, it
may be liable for losses due to unauthorized or fraudulent telephone
instructions.
BY MAIL
Shareholders may provide instructions for exchanges between the Monitor
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. If an investor purchases Investment Shares by check and wishes
to redeem those Investment Shares before the check clears, the Trust may delay
payment of any redemption proceeds until the check clears. Under unusual
circumstances, the Fund may suspend redemptions or postpone payment for more
than seven days, as permitted by federal securities law.
14
<PAGE>
REDEEMING BY TELEPHONE
A shareholder may redeem Investment Shares by calling The Huntington
Investment Company at 800-322-4600, their Personal Banker directly or the
Investor Services Department at (in Ohio) 614-480-5580 or (outside the 614
Area Code) 800-253-0412. Requests for redemptions 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
the 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 Fund, they may be
liable for losses due to unauthorized or fraudulent telephone instructions.
REDEEMING BY MAIL
Shareholders may redeem Investment Shares by sending a written request to
the appropriate member of the Huntington Group. The written request should
include the shareholder's name, the 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 Fund does not accept signatures guaranteed by a notary public.
15
<PAGE>
The Fund and the Transfer Agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Fund and the Transfer Agent reserve the
right to amend these standards at any time without notice.
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 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 (Investor
Services Department). 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 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. For this reason, payments under this program
should not be considered as yield or income on the shareholder's investment in
Investment Shares. 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. The Trust requires two to three days to process a systematic
withdrawal and uses automated clearing house funds, which are transferred
electronically and thus have the potential to be uninvested for up to 48
hours.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the 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
the 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.
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<PAGE>
MANAGEMENT OF THE TRUST
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Fund's business. Huntington serves as investment adviser to the
Fund 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 Fund, including investment research and management
with respect to all securities, instruments, cash and cash equivalents in the
Fund. The Trust pays Huntington management fees, computed daily and payable
monthly, for the Fund at the annual rate of 0.50% of the Fund's average daily
net assets. Huntington may periodically waive all or a portion of its
management fee with respect to the Fund to increase the net income of the Fund
available for distribution as dividends.
Adviser's Background. Huntington is an indirect, wholly-owned subsidiary of
Huntington Bancshares Incorporated ("HBI"). With $21 billion in assets as of
June 30, 1997, 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 $19 billion of assets, and has investment discretion over approximately
$5 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 Fund 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.
William G. Doughty and Duane C. Carpenter will be the co-managers of the
Fund. Mr. Doughty has more than 25 years of experience in the investment
management business and has been employed by Huntington as portfolio manager
of the Monitor Ohio Tax-Free Fund for more than five years. Mr. Carpenter has
more than 13 years of investment management experience and has been employed
by Huntington or FMB-Trust as portfolio manager of FMB Money Market Fund since
1993 and as portfolio manager of FMB Intermediate Government Income Fund since
1991.
DISTRIBUTION OF INVESTMENT SHARES
SEI Investments Distribution Co., One Freedom Valley Road, Oaks,
Pennsylvania 19456, is the principal distributor for shares of the Fund. It is
a Delaware corporation, and is the principal distributor for a number of
investment companies.
17
<PAGE>
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan in connection with its offering of
Investment Shares, pursuant to Rule 12b-1 under the 1940 Act (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 Fund's 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 Fund. 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 Huntington 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 Fund.
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 the 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 the Fund's
Investment Shares will be reimbursed by the Fund in an amount which may not
exceed an annual rate of 0.25 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 the Fund's Investment Shares are accrued
daily, payable quarterly, and calculated on an annual basis.
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 Plan.
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 Plan as described
above, the Distributor may also pay financial
18
<PAGE>
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 Fund.
ADMINISTRATION OF THE FUNDS
SEI Fund Resources, an affiliate of the Distributor, provides certain
administrative personnel and services necessary to operate the Fund. For these
services, the Fund pays a fee, computed daily and payable monthly to SEI Fund
Resources at an annual rate of 0.11% of its average daily net assets. SEI Fund
Resources has entered into a sub-administration agreement with Huntington
pursuant to which Huntington provides certain administrative services to the
Fund. The fees paid to Huntington under this agreement are paid by SEI Fund
Resources and not by the Fund.
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 the Fund. SEI Investments Management Corporation, serves
as the Trust's transfer agent and dividend disbursing agent. SEI Investments
Management Corporation has entered into an agreement with State Street Bank
and Trust Company and Huntington pursuant to which State Street Bank and
Huntington provide certain transfer agency services to the Fund. The fees paid
under this agreement are paid by SEI Investments Management Corporation and
not by the Fund.
INDEPENDENT AUDITORS
Effective in 1997, the independent auditors for the Trust are KPMG Peat
Marwick LLP, Columbus, Ohio.
DISTRIBUTIONS AND TAXES
Dividends, if any, from the investment income of the Fund are declared and
paid monthly to both classes of shares. Distributions resulting from any net
realized capital gains of the Fund will be paid at least annually.
DISTRIBUTION OPTIONS
Shareholders of the Fund 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.
FEDERAL INCOME TAXES
The 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, the
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<PAGE>
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. In addition, in order for the Fund's distributions to qualify as
"exempt interest dividends", at least 50% of the Fund's assets must consist of
obligations described in Section 103(a) of the Internal Revenue Code at the
end of each quarter.
Shareholders should note that in certain cases (i) the Fund will be required
to withhold 31% of dividends or sale proceeds otherwise due to a shareholder
and (ii) in addition to federal taxes, state and local taxes may apply to
transactions in shares. The exemption of interest on municipal bonds for
federal income tax purposes does not necessarily result in exemption under the
income, corporate or personal property tax laws of any state or city.
Generally, shareholders are afforded tax-exempt treatment at the state and
local levels for distributions derived from interest on municipal securities
of the shareholder's state of residency.
For federal income tax purposes, distributions (other than exempt-interest
dividends) will be taxable as ordinary income to the extent derived from the
Fund's investment income and net short-term gains. Pursuant to the Taxpayer
Relief Act of 1997, two different tax rates apply to distributions of net
capital gains. One rate (generally 28%) applies to net gains on capital assets
held for more than one year but not more than 18 months ("mid-term gains") and
a second, preferred rate (generally 20%) applies to the balance of such net
capital gains ("adjusted net capital gains"). Distributions of net capital
gains will be treated in the hands of shareholders as mid-term gains to the
extent designated by the Fund as deriving from net gains from assets held for
more than one year but not more than 18 months, and the balance will be
treated as adjusted net capital gains. Distributions of mid-term gains and
adjusted net capital gains will be taxable as such, regardless of how long
shares have been held. Distributions will be taxable as described above
whether received in cash or in shares through the reinvestment of
distributions.
Fund distributions designated as exempt-interest dividends are not generally
subject to federal income tax. However, if a shareholder receives social
security or railroad retirement benefits, the shareholder should consult a tax
adviser to determine what effect, if any, an investment in the Fund may have
on the taxation of such benefits. In addition, an investment in the Fund may
result in liability for federal alternative minimum tax, for both individual
and corporate shareholders.
Early in each year the Fund will notify shareholders of the amount and the
federal income tax status of the distributions paid or deemed paid 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.
In addition, any loss (not already disallowed as provided in the preceding
paragraph) realized upon a taxable disposition of shares held for six months
or less will be treated as long-term, rather than short-term, to the extent of
any long-term capital gain distributions received by the shareholder with
respect to the shares.
20
<PAGE>
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.
MICHIGAN TAXES
Individual shareholders of the Fund residing in Michigan will not be subject
to Michigan personal income tax or personal income taxes imposed by cities in
Michigan, and corporate shareholders will not be subject to the Michigan
single business tax, on distributions received from the Fund to the extent
such distributions are attributable to interest on tax-exempt obligations of
the State of Michigan or any municipality, political subdivision or
governmental agency or instrumentality thereof or on obligations issued by the
Governments of Puerto Rico, the Virgin Islands and Guam, provided that the
Fund complies with the requirement of the Internal Revenue Code that at least
50% of the value of its assets at the close of each quarter of its taxable
year is invested in state, municipal or other obligations the interest on
which is exempt from federal income tax under Section 103(a) of the Internal
Revenue Code.
Other distributions from the Fund, including those related to long-term and
short-term capital gains, will generally not be exempt from the Michigan
personal income tax or single business tax.
Income from the Fund, to the extent attributable to interest on obligations
issued by Michigan or its political subdivisions, will be excluded for
purposes of determining yield under the Michigan intangibles tax.
The Michigan Department of Treasury has issued rulings which confirm these
state tax consequences for Michigan resident individuals and corporations.
Shareholders of the Fund should consult their tax advisers about other state
and local tax consequences of their investments in the Fund.
Additional information regarding federal and Michigan income taxes is
contained in the SAI. 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. The treatment of dividends and distributions paid by
the Fund under Michigan law described herein is based on current statutes,
regulations and current policies, all of which are subject to change.
Shareholders should consult their own tax adviser to determine the precise
effect of an investment in the Fund on their particular tax situation.
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
21
<PAGE>
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 Income Equity Fund, the
Mortgage Securities Fund, the Ohio Tax-Free Fund, the Short/Intermediate Fixed
Income Securities Fund, and the Fixed Income Securities Fund and the Michigan
Tax-Free 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
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 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, and a meeting must be held upon the written request
of not less than 10% of the outstanding shares of the Trust. Upon written
request by the holders of shares representing at least 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).
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 the 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 the fund or such class present at a meeting at which the holders
of more than 50% of the outstanding shares of the Trust or the 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 Fund. Yield for both classes of
shares of the Fund is calculated by dividing the Fund's annualized net
investment income per share during a recent 30-day period by the maximum
22
<PAGE>
public offering price per share on the last day of that period. The tax-
equivalent yield of each class of shares shows the effect on performance of
the tax-exempt status of distributions received from the 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 equal to
the Fund's tax-exempt yield. Total return for the one-year period and for the
life of the 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 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 Fund also contributes to a lower total
return for 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 the 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 the
Fund's portfolio, and the operating expenses of the 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 the Fund's investment results to those of other
mutual funds and other investment vehicles.
From time to time, advertisements for the Fund may refer to ratings,
rankings, and other information in certain financial publications and/or
compare the Fund's performance to certain indices.
SHAREHOLDER INQUIRIES
Shareholder inquiries regarding the Monitor Michigan Tax-Free Fund should be
directed to The Huntington National Bank, Huntington Center, 41 South High
Street, Columbus, Ohio 43287.
OTHER CLASSES OF SHARES
The Fund also offers 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
National Bank 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 the 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 the Fund's Investment Shares.
Expense differences between the Fund's Investment Shares and Trust Shares may
affect the performance of each class.
Investors may obtain information about Trust Shares by contacting the
Distributor.
23
<PAGE>
Investment Adviser
- --------------------------------------------------------------------------------
The Huntington National Bank
Huntington Center
Columbus, OH 43287
1-800-253-0412
Administrator
- --------------------------------------------------------------------------------
SEI Fund Resources
One Freedom Valley Road
Oaks, PA 19456
Distributor
- --------------------------------------------------------------------------------
SEI Investments Distribution Co.
One Freedom Valley Road
Oaks, PA 19456
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 the Fund or the Distributor. This
Prospectus does not constitute an offering
by the Fund or by the Distributor in any jurisdiction in which such offering
may not lawfully be made.
LOGO
M logo FPO
The Monitor Funds
MARBLE SCREEN F.P.O.
Investment Shares
The Monitor Michigan Tax-Free Fund
November 20, 1997
ART
<PAGE>
Rule 497(c)
Reg. No 33-11905
THE MONITOR MICHIGAN TAX-FREE FUND--TRUST SHARES
PROSPECTUS
The Trust Shares of The Monitor Michigan Tax-Free Fund (the "Fund") offered
by this Prospectus represent interests in a non-diversified portfolio of
securities that is one of a series of ten investment portfolios in The Monitor
Funds, a Massachusetts business trust (the "Trust") which is an open-end
management investment company (a mutual fund). Trust Shares may be purchased
through procedures established by SEI Investments Distribution Co. (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 National Bank or its affiliates or
correspondent banks.
The investment objective of the Fund is to provide current income exempt
from both federal and Michigan personal income taxes. The Fund will pursue
this objective by investing primarily in debt obligations with short to
intermediate remaining maturities (less than 15 years) issued by or on behalf
of the State of Michigan and its political subdivisions, agencies and
instrumentalities or by other issuers outside the State of Michigan if such
obligations pay interest that, in the opinion of counsel to the issuer, is
exempt from federal and Michigan personal income tax.
The Fund is offered in two classes of shares, Investment Shares and Trust
Shares. This Prospectus relates only to Trust Shares of the Fund. This
Prospectus sets forth concisely what a shareholder should know before
investing in Trust Shares of the Fund and should be read carefully and
retained for future reference. The Combined Statement of Additional
Information dated April 30, 1997, as supplemented on November 20, 1997, 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, AS
SUPPLEMENTED, CALL THE INVESTOR SERVICES DEPARTMENT AT: (IN OHIO) 614-480-5580
OR (OUTSIDE THE 614 AREA CODE) 800-253-0412.
THE HUNTINGTON NATIONAL BANK
Investment Adviser
SEI FUND RESOURCES
Administrator
SEI INVESTMENTS DISTRIBUTION CO.
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
ACCURACY 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 NATIONAL BANK,
NOR ARE THEY INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN
INVESTMENT IN THE 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.
November 20, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION........................................................... 1
Risk Factors................................................................. 1
FEE TABLE AND EXAMPLE......................................................... 2
INVESTMENT OBJECTIVE AND POLICIES............................................. 2
ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES................ 3
Michigan Municipal Obligations............................................... 3
Non-Diversification.......................................................... 3
Defensive Investment Strategies.............................................. 4
U.S. Government Securities................................................... 4
Bank and Savings and Loan Obligations........................................ 4
Commercial Paper............................................................. 5
Repurchase Agreements........................................................ 5
Variable and Floating Rate Demand and Master Demand Notes.................... 5
When-Issued and Delayed Delivery Transactions................................ 6
Lending of Portfolio Securities.............................................. 6
Options and Futures Contracts................................................ 6
INVESTMENT RESTRICTIONS....................................................... 8
HOW THE FUND VALUES SHARES.................................................... 8
HOW TO BUY TRUST SHARES....................................................... 9
Minimum Investment Required................................................. 10
Systematic Investment Program............................................... 10
PAGE
HOW TO EXCHANGE TRUST SHARES AMONG THE FUNDS................................. 10
By Telephone................................................................ 10
By Mail..................................................................... 10
HOW TO REDEEM TRUST SHARES................................................... 11
Redeeming by Telephone...................................................... 11
Redeeming by Mail........................................................... 12
MANAGEMENT OF THE TRUST...................................................... 13
Distribution of Trust Shares................................................ 14
Administration of the Fund.................................................. 14
Custodian, Recordkeeper, Transfer Agent, and Dividend Disbursing Agent...... 14
Independent Auditors.........................................................14
DISTRIBUTIONS AND TAXES.......................................................14
Distribution Options........................................................ 15
Federal Income Taxes........................................................ 15
Michigan Taxes.............................................................. 16
ORGANIZATION OF THE TRUST.................................................... 17
Voting Rights............................................................... 17
PERFORMANCE DATA AND COMPARISONS............................................. 18
SHAREHOLDER INQUIRIES........................................................ 18
OTHER CLASSES OF SHARES...................................................... 19
<PAGE>
GENERAL INFORMATION
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 (individually, a "fund," or collectively, the "funds"). 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 all of the funds. This
Prospectus relates solely to the Trust Shares of The Monitor Michigan Tax-Free
Fund (the "Fund").
For information on how to purchase Trust Shares of the Fund, please refer to
"How to Buy Trust Shares." A minimum initial investment of $1,000 is required
for the Fund. Subsequent investments in the Fund must be in amounts of at
least $500. Trust Shares of the Fund are sold and redeemed at net asset value.
Information on redeeming shares may be found under "How to Redeem Trust
Shares." The Fund is advised by The Huntington National Bank ("Huntington" or
the "Adviser").
RISK FACTORS
Investors should be aware of the following general observations. The market
value of fixed-income securities, which constitute a major part of the
investments of the Fund, may vary inversely in response to changes in
prevailing interest rates ("interest rate risk"). The Fund 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 and
purchasing securities on a when-issued or delayed delivery basis. These
investments and investment techniques may increase the volatility of the
Fund's net asset value. Their risks are described under "Additional
Information on Portfolio Investments and Strategies."
The performance of the Fund is closely tied to conditions within the State
of Michigan. The economy of Michigan is principally dependent on three
sectors--manufacturing (particularly durable goods, automotive products and
office equipment), tourism and agriculture. Michigan encountered financial
difficulties during the late 1980s, largely as a result of poor conditions in
the automotive industry, but recovered from the prolonged downturn in
production levels in this sector in the early 1990s. Structural changes in the
automotive industry have given the Michigan economy greater financial
stability. The state's finances continue to be in excellent condition, and a
Budget Stabilization Fund that exceeds $1 billion should help the state
weather any potential economic recessions. At the end of 1996, after several
years of rapid growth, the Michigan economy was evidencing continued growth
and unemployment levels were lower than they had been for the past several
years. The market value and the marketability of bonds issued by local units
of government in the state may be affected adversely by the same factors that
affect Michigan's economy generally. The ability of the State and its local
units of government to pay the principal of and interest on their bonds may
also be affected by such factors and by certain constitutional, statutory and
charter limitations. For additional information on the risks associated with
the Fund, see "Investment Objectives and Policies of the Trust--Michigan
Municipal Obligations" in the Combined Statement of Additional Information, as
supplemented (the "SAI").
1
<PAGE>
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
12B- SHARES
MANAGEMENT 1 OTHER OPERATING
FEES (1) FEES EXPENSES (2) EXPENSES
---------- ---- ------------ ---------
<S> <C> <C> <C> <C>
Michigan Tax-Free Fund................... 0.50% None 0.30% 0.80%
</TABLE>
- --------
(1) Fees paid by the Fund for investment advisory services. See "Management of
the Trust."
(2) Represents all other estimated expenses of the Fund including
administration fees, custodian fees, transfer agent fees and dividend
disbursing agent fees. See "Management of the Trust--Administration of the
Funds."
EXAMPLE:
A shareholder 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>
Michigan Tax-Free Fund.......................... $8 $25 $43 $95
</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. 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.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to provide investors with current
income exempt from both federal and Michigan personal income taxes. The Fund
will attempt to achieve this objective by investing primarily in debt
obligations with short-to-intermediate remaining maturities (less than 15
years) issued by or on behalf of the State of Michigan and its political
subdivisions, agencies, and instrumentalities or by other issuers outside the
State of Michigan if such obligations pay interest that, in the opinion of
counsel to the issuer, is exempt from both federal and Michigan personal
income tax ("Michigan tax-exempt securities"). The Fund may also invest in
numerous types of short-term Michigan tax-exempt securities that 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. As a matter of fundamental policy, under normal market conditions at
least 65% of the Fund's net assets will be invested in Michigan tax-exempt
securities. In addition, the Fund will not, as
2
<PAGE>
a matter of fundamental policy, invest more than 20% of its net assets in
Michigan tax-exempt 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 invest only in Michigan tax-exempt securities that at the time
of purchase are rated in one of the top four categories by a nationally
recognized statistical rating organization ("NRSRO") or, if unrated, are
determined by the Adviser to be of comparable quality. See the Appendix to the
SAI for a description of rating categories. The lowest rated investment-grade
securities are deemed to have speculative characteristics. The Fund does not
anticipate holding Michigan tax-exempt securities whose ratings have fallen
below the top four categories of an NSRSO, and will attempt to sell such
securities, depending on current market conditions.
From time to time, the Fund may invest in obligations the interest on which
is subject to federal income tax or Michigan personal income taxes, pending
investment in Michigan tax-exempt securities or for liquidity or defensive
purposes. The Fund may also hold a portion of its assets in cash or money
market instruments such as bank obligations, U.S. Government securities,
commercial paper or repurchase agreements. There can, of course, be no
guarantee that the Fund will achieve its investment objective.
The Fund's investment objective is fundamental and may be changed only by a
vote of a majority of the outstanding shares. Unless otherwise noted in this
Prospectus or in the Statement of Additional Information, the investment
policies of the Fund are not fundamental and may be changed by the Trust's
Board of Trustees (the "Trustees"). Any percentage limitation on the 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 the NRSROs utilized by Huntington in managing
the Fund's investments, see the Appendix to the SAI.
ADDITIONAL INFORMATION ON PORTFOLIO INVESTMENTS AND STRATEGIES
MICHIGAN TAX-EXEMPT SECURITIES
The tax-exempt securities which the Fund may purchase include fixed and
floating rate and variable rate municipal obligations, participation interests
in municipal bonds, tax-exempt commercial paper, short-term municipal notes,
and stand-by commitments. The Fund's concentration in investments in Michigan
tax-exempt securities will subject the Fund to greater risk with respect to
its portfolio securities than an investment company that is permitted to
invest in a broader range of investments, because changes in the financial
condition or market assessment of issuers of Michigan tax-exempt securities
generally may cause substantial fluctuations in the Fund's yield and price of
Fund shares. Also, political or economic developments that affect one such
security might affect the other securities. See "Investment Objectives and
Policies of the Trust--Michigan Tax-Exempt Securities" in the SAI.
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
3
<PAGE>
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.
NON-DIVERSIFICATION
As a non-diversified fund under the 1940 Act, the Fund may invest its assets
in the obligations of fewer issuers than would be the case if it was
"diversified". The Fund's ability to invest a relatively high percentage of
its assets in the securities of a limited number of issuers involves an
increased risk of loss to the 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 1940 Act, the Fund
intends to comply with the diversification requirements of Subchapter M of the
Internal Revenue Code. This undertaking requires, among other things, that at
the end of each quarter of the taxable year, with regard to at least 50% of
the 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 the 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 the Fund's assets. In implementing these
temporary "defensive" strategies, the 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. These alternative strategies may give rise to
income which is not exempt from federal or state taxes.
U.S. GOVERNMENT SECURITIES
U.S. Government securities are securities that 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
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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.
BANK AND SAVINGS AND LOAN OBLIGATIONS
These obligations include negotiable certificates of deposit, fixed time
deposits, bankers' acceptances, and interest bearing demand accounts. The Fund
limits its bank investments to dollar-denominated obligations of U.S.,
Canadian, Asian or European banks which have more than $500 million in total
assets at the time of investment or of United States savings and loan
associations which have more than $1 billion in total assets at the time of
investment and, in the case of U.S. banks, are members of the Federal Reserve
System or are examined by the Comptroller of the Currency or whose deposits
are insured by the FDIC.
COMMERCIAL PAPER
Commercial paper includes short-term unsecured promissory notes, and
variable floating rate demand notes issued by domestic and foreign bank
holding companies, corporations and financial institutions as well as similar
taxable and tax-exempt instruments issued by government agencies and
instrumentalities.
REPURCHASE AGREEMENTS
Certain securities in which the 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 the Fund and agree at the time of
sale to repurchase them at a mutually agreed upon time and price. The 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 the Fund, the
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 the Fund might be delayed
pending court action. The Trustees believe that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor
of the Fund and allow retention or disposition of such securities. The 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.
VARIABLE AND FLOATING RATE DEMAND AND MASTER DEMAND NOTES
The Fund may, from time to time, buy variable or floating rate demand notes
issued by corporations, bank holding companies and financial institutions and
similar taxable and tax-exempt instruments issued by government agencies and
instrumentalities. These securities typically will have a nominal maturity of
over one year but will give the holder the right to "put" the securities to a
remarketing agent or other entity at designated time intervals and on
specified notice. The obligation
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of the issuer of the put to repurchase the securities may be backed by a
letter of credit or other obligation issued by a financial institution. The
purchase price is ordinarily par plus accrued and unpaid interest. Generally,
the remarketing agent will adjust the interest rate every seven days (or at
other specified intervals) in order to maintain the interest rate at the
prevailing rate for securities with a seven-day or other designated maturity.
The Fund also may buy variable rate master demand notes. The terms of these
obligations permit the Fund to invest fluctuating amounts at varying rates of
interest pursuant to direct arrangements between the Fund, as lender, and the
borrower. These instruments permit weekly and, in some instances, daily
changes in the amounts borrowed. The Fund has the right to increase the amount
under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the
full amount of the note without penalty. The notes may or may not be backed by
bank letters of credit. Because the notes are direct lending arrangements
between the Fund and borrower, it is not generally contemplated that they will
be traded, and there is no secondary market for them, although they are
redeemable (and, thus, immediately repayable by the borrower) at principal
amount, plus accrued interest, at any time. In connection with any such
purchase and on an ongoing basis, the Adviser will consider the earning power,
cash flow and other liquidity ratios of the issuer, and its ability to pay
principal and interest on demand, including situations in which all holders of
such notes make demand simultaneously. While master demand notes, as such, are
not typically rated by NRSROs, if not so rated, the Fund may, under its
minimum rating standards, invest in them only if, at the time of an
investment, the issuer meets the criteria set forth in this Prospectus for
commercial paper obligations.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may purchase securities on a when-issued or delayed basis. These
transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the 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, the Fund may pay
more or less than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the Fund's adviser
deems it appropriate to do so.
LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend its portfolio
securities on a short-term basis to brokers, dealers or other financial
institutions. The 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 Trustee 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 the 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 the Fund on a timely basis and the Fund may,
therefore, lose the opportunity to sell the securities at a
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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.
OPTIONS AND FUTURES CONTRACTS
The 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. The Fund receives a premium from writing a
call or put option, which increases the Fund's return if the option expires
unexercised or is closed out at a net profit. The Fund may also buy and sell
put and call options on its securities for hedging purposes. When the 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, the 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. The 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.
The 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. The 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 the Fund owns or expects to purchase. The
Fund may also purchase and sell put and call options on index futures or
directly on the underlying indices for hedging purposes. In addition, the Fund
may purchase and sell futures contracts and related options on individual debt
securities which the Fund owns or expects to purchase, if and when such
futures contracts and options become available.
In connection with its futures transactions, the 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. The 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 the Fund's existing futures contracts and options written by the Fund plus
premiums paid for outstanding options on futures contracts purchased by the
Fund, would exceed 5% of the Fund's net assets.
Options and futures transactions involve various risks, including the risk
that the 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 the Fund is dependent upon,
among other things, the Fund's ability to terminate options and futures
positions at times when Huntington deems it desirable to do so. Although the
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 the Fund will be able to effect
closing transactions at a particular time or at an acceptable price.
The Fund generally expects that options and futures transactions will be
conducted on recognized exchanges. In certain instances, however, the Fund may
purchase and sell options in the over-the-
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counter ("OTC") markets. The 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 the Fund. The 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 SAI.
INVESTMENT RESTRICTIONS
The Fund is a non-diversified fund, which means that it may invest more than
5% of its total assets in the securities of any one issuer. The 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 the Fund only by a
vote of a majority of the outstanding shares of the Fund.
The Fund will not:
(1) Invest 25% or more of the value of its total assets in Michigan tax-
exempt securities 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 a Michigan state-wide, national or
international development) affecting one such tax-exempt security 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 may not result from investment;
(2) 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;
(3) Borrow money or pledge or mortgage its assets, except that the Fund may
borrow from banks up to 10% of the current value of its total net
assets for temporary or emergency purposes and those borrowings may be
secured by the pledge of not more than 15% of the current value of its
total net assets (but investments may not be purchased by the Fund
while any such borrowings are outstanding); or
(4) Make loans, except loans of portfolio securities and except that the
Fund may enter into repurchase agreements with respect to its portfolio
securities and may purchase the types of debt instruments described in
this Prospectus. To increase current income, the Fund may lend
portfolio securities comprising up to 5% of total assets to brokers,
dealers and financial institutions, provided certain conditions are
met, including the condition that each loan is secured continuously by
collateral maintained on a daily market-to-market basis in an amount at
least equal to the current market value of the securities loaned.
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HOW THE FUND VALUES SHARES
The net asset value for Trust Shares of the Fund is determined by adding the
interest of the Trust Shares in the market value of all securities and other
assets of the Fund, subtracting the interest of the Trust Shares in the
liabilities of the Fund and those attributable to Trust Shares, and dividing
the remainder by the total number of Trust Shares outstanding. The net asset
value of the Fund's Trust Shares will differ from that of Investment Shares
due to the expense of the Rule 12b-1 fee applicable to the Fund's Investment
Shares.
Securities for which market quotations are readily available are stated at
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 Fund calculates 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 the 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; (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day; and (iv) other civil holidays when the
Federal Reserve Banks or the financial markets are closed, such as Veterans'
Day and Martin Luther King Day.
HOW TO BUY TRUST SHARES
Investors may purchase Trust Shares in the Fund 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 Huntington or its affiliates or correspondent banks
(collectively, the "Banks"). State securities laws may require banks and
financial institutions purchasing shares for their customers to register as
brokers pursuant to such laws. Trust Shares of the Fund are purchased at the
appropriate net asset value per Trust Share next determined after the order is
transmitted to the Funds' transfer agent, SEI Investments Management
Corporation (the "Transfer Agent").
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 the Fund owned. The Fund 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. If a shareholder pays for Trust
Shares with a check drawn from a bank outside the United States, the check
will be sent to the
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bank for collection prior to placing the trade in the shareholder's account,
and approximately four to five weeks will be required before the trade will be
processed. For more information or assistance regarding the purchase of Trust
Shares of the Fund, call the Investor Services Department at (in Ohio) 614-
480-5580, or (outside the 614 Area Code) 800-253-0412.
From time to time, the Trust may temporarily suspend the offering of shares
of the Fund or either class of its shares. During the period of any such
suspension and depending on the reasons for the suspension, persons who are
already shareholders of the 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 the Fund is $1,000.
Subsequent investments must be in amounts of at least $500.
SYSTEMATIC INVESTMENT PROGRAM
Once an account has been opened, holders of Trust Shares of the Fund may add
to their investment on a regular basis in minimum amounts of at least $50.
Under this program, monies will be automatically withdrawn periodically from
the shareholder's banking account and invested in Trust Shares of the 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 Investor Services Department at (in Ohio) 614-
480-5580 or (outside the 614 Area Code) 800-253-0412.
If the shareholder's automatic investment program payment does not clear,
the purchase will be cancelled and the shareholder may be charged a fee and
will be liable for any losses incurred. Any subsequent such occurrences may
result in the cancellation of the automatic investment program feature of the
shareholder's account.
HOW TO EXCHANGE TRUST SHARES AMONG THE FUNDS
Shareholders may exchange Trust Shares in the 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: Investor Services Department (in Ohio) 614-480-5580 (outside
the 614 Area Code) 800-253-0412
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2. By Mail: The Huntington National Bank 41 South High Street (HC 1116)
Columbus, OH 43287 Attn: Investor Services Department
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 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.
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 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, the 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 Investor
Services Department at (in Ohio) 614-480-5580 or (outside the 614 Area Code)
800-253-0412. Telephone requests for redemptions of Trust Shares in the Fund
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
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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 any time 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 Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.
REDEEMING BY MAIL
Redemption requests may be made by writing The Huntington National Bank, 41
South High Street (HC 1116), Columbus, Ohio 43287, Attention: Investor
Services Department. 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 Fund does not accept signatures guaranteed by a notary public.
The Fund and the Transfer Agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Fund 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
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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 National Bank, 41 South High Street
(HC 1131), Columbus, Ohio 43287, Attention: Investor Services Department.
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 the Fund's business. Huntington serves as investment adviser to the
Fund 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 Fund, including investment research and management
with respect to all securities, instruments, cash and cash equivalents in the
Fund. The Trust pays Huntington management fees, computed daily and payable
monthly, for the Fund at the annual rate of 0.50% of the Fund's average daily
net assets. Huntington may periodically waive all or a portion of its
management fee with respect to the Fund to increase the net income of the Fund
available for distribution as dividends.
Adviser's Background. Huntington is an indirect, wholly-owned subsidiary of
Huntington Bancshares Incorporated ("HBI"). With $21 billion in assets as of
June 30, 1997, 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 $19 billion of assets, and has investment discretion over approximately
$5 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 Fund 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.
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William G. Doughty and Duane C. Carpenter will be co-managers of the Fund.
Mr. Doughty has more than 25 years of experience in the investment management
business and has been employed by Huntington as portfolio manager for The
Monitor Ohio Tax-Free Fund for more than five years. Mr. Carpenter has more
than 13 years of investment management experience and has been employed by
Huntington or FMB-Trust as portfolio manager of FMB Money Market Fund since
1993 and as portfolio manager of FMB Intermediate Government Income Fund since
1991.
DISTRIBUTION OF TRUST SHARES
SEI Investments Distribution Co., One Freedom Valley Road, Oaks,
Pennsylvania 19456, is the principal distributor for shares of the Fund. It is
a Delaware corporation, and is the principal distributor for a number of
investment companies.
ADMINISTRATION OF THE FUNDS
SEI Fund Resources, an affiliate of the Distributor, provides certain
administrative personnel and services necessary to operate the Fund. For these
services, the Fund pays a fee, computed daily and payable monthly to SEI Fund
Resources at an annual rate of 0.11% of its average daily net assets. SEI Fund
Resources has entered into a sub-administration agreement with Huntington
pursuant to which Huntington provides certain administrative services to the
Fund. The fees paid to Huntington under this agreement are paid by SEI Fund
Resources and not by the Fund.
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 the Fund. SEI Investments Management Corporation, serves
as the Trust's transfer agent and dividend disbursing agent. SEI Investments
Management Corporation has entered into an agreement with State Street Bank
and Trust Company and Huntington pursuant to which State Street Bank and
Huntington provide certain transfer agency services to the Fund. The fees paid
under this agreement are paid by SEI Investments Management Corporation and
not by the Fund.
INDEPENDENT AUDITORS
Effective in 1997, the independent auditors for the Trust are KPMG Peat
Marwick LLP, Columbus, Ohio.
DISTRIBUTIONS AND TAXES
Dividends, if any, from the investment income of the Fund are declared and
paid monthly to both classes of shares. Distributions resulting from any net
realized capital gains of the Fund will be paid at least annually.
DISTRIBUTION OPTIONS
Shareholders of the Fund 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
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Shares and to receive all other distributions in cash. Shareholders may choose
a distribution option by notifying the Investor Services Department of their
selection. If a shareholder fails to choose a distribution option, all
distributions will be reinvested in additional Trust Shares of the Fund.
FEDERAL INCOME TAXES
The 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, the
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. In addition, in order for the Fund's distributions to qualify as
"exempt interest dividends", at least 50% of the Fund's assets must consist of
obligations described in Section 103(a) of the Internal Revenue Code at the
end of each quarter.
Shareholders should note that in certain cases (i) the Fund will be required
to withhold 31% of dividends or sale proceeds otherwise due to a shareholder
and (ii) in addition to federal taxes, state and local taxes may apply to
transactions in shares. The exemption of interest on municipal bonds for
federal income tax purposes does not necessarily result in exemption under the
income, corporate or personal property tax laws of any state or city.
Generally, shareholders are afforded tax-exempt treatment at the state and
local levels for distributions derived from interest on municipal securities
of the shareholder's state of residency.
For federal income tax purposes, distributions (other than exempt-interest
dividends) will be taxable as ordinary income to the extent derived from the
Fund's investment income and net short-term gains. Pursuant to the Taxpayer
Relief Act of 1997, two different tax rates apply to distributions of net
capital gains. One rate (generally 28%) applies to net gains on capital assets
held for more than one year but not more than 18 months ("mid-term gains") and
a second, preferred rate (generally 20%) applies to the balance of such net
capital gains ("adjusted net capital gains"). Distributions of net capital
gains will be treated in the hands of shareholders as mid-term gains to the
extent designated by the Fund as deriving from net gains from assets held for
more than one year but not more than 18 months, and the balance will be
treated as adjusted net capital gains. Distributions of mid-term gains and
adjusted net capital gains will be taxable as such, regardless of how long
shares have been held. Distributions will be taxable as described above
whether received in cash or in shares through the reinvestment of
distributions.
Fund distributions designated as exempt-interest dividends are not generally
subject to federal income tax. However, if a shareholder receives social
security or railroad retirement benefits, the shareholder should consult a tax
adviser to determine what effect, if any, an investment in the Fund may have
on the taxation of such benefits. In addition, an investment in the Fund may
result in liability for federal alternative minimum tax, for both individual
and corporate shareholders.
Early in each year the Fund will notify shareholders of the amount and the
federal income tax status of the distributions paid or deemed paid 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
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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.
In addition, any loss (not already disallowed as provided in the preceding
paragraph) realized upon a taxable disposition of shares held for six months
or less will be treated as long-term, rather than short-term, to the extent of
any long-term capital gain distributions received by the shareholder with
respect to the shares.
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.
MICHIGAN TAXES
Individual shareholders of the Fund residing in Michigan will not be subject
to Michigan personal income tax or personal income taxes imposed by cities in
Michigan, and corporate shareholders will not be subject to the Michigan
single business tax, on distributions received from the Fund to the extent
such distributions are attributable to interest on tax-exempt obligations of
the State of Michigan or any municipality, political subdivision or
governmental agency or instrumentality thereof or on obligations issued by the
Governments of Puerto Rico, the Virgin Islands and Guam, provided that the
Fund complies with the requirement of the Internal Revenue Code that at least
50% of the value of its assets at the close of each quarter of its taxable
year is invested in state, municipal or other obligations the interest on
which is exempt from federal income tax under Section 103(a) of the Internal
Revenue Code.
Other distributions from the Fund, including those related to long-term and
short-term capital gains, will generally not be exempt from the Michigan
personal income tax or single business tax.
Income from the Fund, to the extent attributable to interest on obligations
issued by Michigan or its political subdivisions, will be excluded for
purposes of determining yield under the Michigan intangibles tax.
The Michigan Department of Treasury has issued rulings which confirm these
state tax consequences for Michigan resident individuals and corporations.
Shareholders of the Fund should consult their tax advisers about other state
and local tax consequences of their investments in the Fund.
Additional information regarding federal income taxes is contained in the
SAI. 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.
The treatment of dividends and distributions paid by the Fund under Michigan
law described herein is based on current statutes, regulations and current
policies, all of which are subject to change. Shareholders should consult
their own tax adviser to determine the precise effect of an investment in the
Fund on their particular tax situation.
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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 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 Income Equity Fund, the Mortgage Securities Fund, the Ohio
Tax-Free Fund, the Short/Intermediate Fixed Income Securities Fund, and the
Fixed Income Securities Fund and the Michigan Tax-Free 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
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 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, and a meeting must be held upon the written request
of not less than 10% of the outstanding shares of the Trust. Upon written
request by the holders of shares representing at least 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).
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.
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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 the 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 the fund or such class present at a meeting at which the holders
of more than 50% of the outstanding shares of the Trust or the 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 Fund. Yield for both classes of
shares of the Fund 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. The tax-equivalent yield of each class of shares shows the effect on
performance of the tax-exempt status of distributions received from the 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 equal to the Fund's tax-exempt yield. Total return for the one-year
period and for the life of the 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 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 Fund also contributes to a lower total
return for 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 the 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 the
Fund's portfolio, and the operating expenses of the 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 the Fund's investment results to those of other
mutual funds and other investment vehicles.
From time to time, advertisements for the Fund may refer to ratings,
rankings, and other information in certain financial publications and/or
compare the Fund's performance to certain indices.
SHAREHOLDER INQUIRIES
Shareholder inquiries regarding the Monitor Michigan Tax-Free Fund should be
directed to The Huntington National Bank, Huntington Center, 41 South High
Street, Columbus, Ohio 43287, Attention: Investor Services Department.
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OTHER CLASSES OF SHARES
The Fund also offers 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 such organizations and the
Distributor. Investment Shares of the Fund are sold net asset value plus an
applicable sales charge. Purchases of Investment Shares are subject to a
minimum initial investment of $1,000.
Investment Shares and Trust Shares of the 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 the Fund's Investment Shares.
Expense differences between the Fund's Investment Shares and Trust Shares may
affect the performance of each class.
Investors may obtain information about Investment Shares by contacting The
Huntington National Bank, Huntington Personal Bankers or the Investor Services
Department at 614-480-5580 (in Ohio) or 800-253-0412 (outside the 614 Area
Code).
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Investment Adviser
- --------------------------------------------------------------------------------
The Huntington National Bank
Huntington Center
Columbus, OH 43287
1-800-253-0412
Administrator
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SEI Fund Resources
One Freedom Valley Road
Oaks, PA 19456
Distributor
- --------------------------------------------------------------------------------
SEI Investments Distribution Co.
One Freedom Valley Road
Oaks, PA 19456
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 the Fund or the Distributor. This
Prospectus does not constitute an offering
by the Fund or by the Distributor in any jurisdiction in which such offering
may not lawfully be made.
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M logo FPO
The Monitor Funds
MARBLE SCREEN F.P.O.
Trust Shares
The Monitor Michigan Tax-Free Fund
November 20, 1997
