<PAGE> 1
THE PARKSTONE GROUP OF FUNDS
INVESTOR A SHARES
GROWTH FUNDS INCOME FUNDS
Parkstone Small Capitalization Fund Parkstone Bond Fund
Parkstone Mid Capitalization Fund Parkstone Limited Maturity Bond Fund
Parkstone Large Capitalization Fund Parkstone Intermediate Government
Parkstone International Discovery Fund Obligations Fund
Parkstone U.S. Government Income Fund
GROWTH AND INCOME FUNDS MONEY MARKET FUNDS
Parkstone Moderate Foundation Fund Parkstone Prime Obligations Fund
Parkstone Equity Income Fund Parkstone U.S. Government
Obligations Fund
TAX-FREE INCOME FUNDS Parkstone Treasury Fund
Parkstone Municipal Bond Fund Parkstone Tax-Free Fund
Parkstone Michigan Municipal Bond Fund
================================================================================
Supplement dated December 20, 1996
to Prospectus dated October 8, 1996
as Supplemented October 16, 1996
1. Investors are advised that the Parkstone Moderate Foundation Fund,
formerly known as the Parkstone Balanced Fund, has been renamed the Parkstone
Balanced Allocation Fund. All references contained in the Prospectus to this
Fund are changed accordingly.
2. On page 10 of the Prospectus, the discussion of the annual fund
operating expenses absent voluntary fee reductions for the Large Capitalization
Fund is revised as follows:
The annual percentage of Other Expenses for the Large Capitalization
Fund is based on expenses incurred since commencement of operations
and expected voluntary reductions. Absent the expected voluntary
reduction of administration fees, Other Expenses and Total Expenses
would be 1.57% and 2.62%, respectively.
3. On page 64 of the Prospectus, the first paragraph under the heading
"Exchange Privilege" is revised as follows:
The exchange privilege enables shareholders of Investor A Shares to
acquire Investor A Shares that are offered by another Fund of the
Group with a different investment objective. Except in the case of
holders of Investor C Shares wishing to exchange their shares for
Investor A Shares of any of the Money Market Funds, holders of shares
of one class may not exchange their shares for shares of another
class. For example, holders of a Fund's Investor B Shares may not
exchange their shares for Investor A Shares, and holders of Investor
A Shares may not exchange their shares for Investor B Shares.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
<PAGE> 2
THE PARKSTONE GROUP OF FUNDS
INVESTOR B SHARES
GROWTH FUNDS TAX-FREE INCOME FUNDS
Parkstone Small Capitalization Fund Parkstone Municipal Bond Fund
Parkstone Mid Capitalization Fund Parkstone Michigan Municipal
Parkstone Large Capitalization Fund Bond Fund
Parkstone International Discovery Fund
INCOME FUNDS
GROWTH AND INCOME FUNDS Parkstone Bond Fund
Parkstone Moderate Foundation Fund Parkstone Limited Maturity Bond Fund
Parkstone Equity Income Fund Parkstone Intermediate Government
Obligations Fund
Parkstone U.S. Government Income Fund
================================================================================
Supplement dated December 20, 1996
to Prospectus dated October 8, 1996
as Supplemented October 16, 1996
1. Investors are advised that the Parkstone Moderate Foundation Fund,
formerly known as the Parkstone Balanced Fund, has been renamed the Parkstone
Balanced Allocation Fund. All references contained in the Prospectus to this
Fund are changed accordingly.
2. On page 9 of the Prospectus, in the table under the heading "Annual
Fund Operating Expenses," the fees and expenses for the Large Capitalization
Fund are revised as follows:
Total
Management 12b-1 Other Operating
Fees Fees Expenses Expenses
---- ---- -------- --------
Large Capitalization Fund 0.80% 1.00% 0.33% 2.13%
3. On pages 9-10 of the Prospectus, the discussion of the annual fund
operating expenses absent voluntary fee reductions for the Large Capitalization
Fund is revised as follows:
The annual percentage of Other Expenses for the Large Capitalization
Fund is based on expenses incurred since commencement of operations
and expected voluntary reductions. Absent the expected voluntary
reduction of administration fees, Other Expenses and Total Expenses
would be 2.27% and 4.07%, respectively.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
<PAGE> 3
4. On page 10 of the Prospectus, in the tables under the heading "Expense
Examples," the expenses for the Large Capitalization Fund, rounded to the
nearest dollar on a $1,000 investment in Investor B Shares, are revised as
follows:
Assuming (1) 5% annual return and (2) redemption at the end of each
time period:
1 Year 3 Years
------ -------
Large Capitalization Fund $62 $97
Assuming (1) 5% annual return and (2) no redemption at the end of each
time period:
1 Year 3 Years
------ -------
Large Capitalization Fund $22 $67
5. On page 37 of the Prospectus, the first sentence under the heading
"Other Mutual Funds" is revised as follows:
Each of the Funds may invest up to 5% of the value of its total assets
in the securities of any one money market mutual fund (including
shares of the Parkstone Money Market Funds: the Parkstone Prime
Obligations Fund, the Parkstone U.S. Government Obligations Fund, the
Parkstone Treasury Fund and the Parkstone Tax-Free Fund), provided
that no more than 10% of a Fund's total assets may be invested in the
securities of mutual funds in the aggregate.
6. On page 51 of the Prospectus, the first paragraph under the heading
"Exchange Privilege" is revised as follows:
The exchange privilege enables shareholders of Investor B Shares to
acquire Investor B Shares that are offered by another Fund of the
Group with a different investment objective. Except in the case of
holders of Investor C Shares wishing to exchange their shares for
Investor A Shares of any of the Money Market Funds, holders of shares
of one class may not exchange their shares for shares of another
class. For example, holders of a Fund's Investor B Shares may not
exchange their shares for Investor A Shares, and holders of Investor
A Shares may not exchange their shares for Investor B Shares.
7. Also on page 51 of the Prospectus, the last sentence in the first
paragraph under the heading "Factors to Consider When Selecting Investor B
Shares" is revised as follows:
The Group will refuse all purchase orders for Investor B Shares of
over $250,000.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
Page 2
<PAGE> 4
THE PARKSTONE GROUP OF FUNDS
INVESTOR C SHARES
GROWTH FUNDS INCOME FUNDS
Parkstone Small Capitalization Fund Parkstone Bond Fund
Parkstone Mid Capitalization Fund Parkstone Limited Maturity Bond Fund
Parkstone Large Capitalization Fund Parkstone Intermediate Government
Parkstone International Discovery Fund Obligations Fund
Parkstone U.S. Government Income Fund
GROWTH AND INCOME FUNDS
Parkstone Moderate Foundation Fund
Parkstone Equity Income Fund
================================================================================
Supplement dated December 20, 1996
to Prospectus dated October 8, 1996
as Supplemented October 16, 1996
1. Investors are advised that the Parkstone Moderate Foundation Fund,
formerly known as the Parkstone Balanced Fund, has been renamed the Parkstone
Balanced Allocation Fund. All references contained in the Prospectus to this
Fund are changed accordingly.
2. On page 8 of the Prospectus, in the table under the heading "Annual
Fund Operating Expenses," the fees and expenses for the Large Capitalization
Fund and the Balanced Allocation Fund are revised as follows:
Total
Management 12b-1 Other Operating
Fees Fees Expenses Expenses
---- ---- -------- --------
Large Capitalization Fund 0.80% 1.00% 0.44% 2.24%
Balanced Allocation Fund 0.75% 1.00% 0.41% 2.16%
3. On page 8 of the Prospectus, the following sentence is inserted after
the first sentence in the discussion of the annual fund operating expenses
absent voluntary fee reductions:
Management Fees, Other Expenses and Total Expenses as a percentage of
average net assets for the Balanced Allocation Fund, absent the
voluntary reduction of administration and advisory fees, would have
been 1.00%, 0.41% and 2.41%, respectively.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
<PAGE> 5
4. Also on page 8 of the Prospectus, the discussion of the annual fund
operating expenses absent voluntary fee reductions for the Large Capitalization
Fund is revised as follows:
The annual percentage of Other Expenses for the Large Capitalization
Fund is based on expenses incurred since commencement of operations
and expected voluntary reductions. Absent the expected voluntary
reduction of administration fees, Other Expenses and Total Expenses
would be 2.05% and 4.25%, respectively.
5. On page 44 of the Prospectus, the first two paragraphs under the
heading "Exchange Privilege" are revised as follows:
The exchange privilege enables shareholders of Investor C Shares to
acquire Investor C Shares that are offered by another Fund of the
Group with a different investment objective. Holders of Investor C
Shares may also exchange their shares for Investor A Shares that are
offered by any of the Money Market Funds of the Group. Except in this
limited case, holders of shares of one class may not exchange their
shares for shares of another class. For example, holders of Investor
C Shares may not exchange their shares for Investor B Shares, and
holders of Investor B Shares may not exchange their shares for
Investor C Shares.
Holders of Investor C Shares of one of the Group's Funds (including
Investor C Shares acquired through reinvestment of dividends and
distributions on such shares) may exchange those Investor C Shares
without the imposition of a contingent deferred sales charge for
Investor C Shares offered by any of the Group's other Funds or
Investor A Shares offered by any of the Group's Money Market Funds
provided that the amount to be exchanged meets the applicable minimum
investment requirements and the exchange is made in states where it is
legally authorized.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
Page 2
<PAGE> 6
THE PARKSTONE GROUP OF FUNDS
INSTITUTIONAL SHARES
GROWTH FUNDS INCOME FUNDS
Parkstone Small Capitalization Fund Parkstone Bond Fund
Parkstone Mid Capitalization Fund Parkstone Limited Maturity Bond Fund
Parkstone Large Capitalization Fund Parkstone Intermediate Government
Parkstone International Discovery Fund Obligations Fund
Parkstone U.S. Government Income Fund
GROWTH AND INCOME FUNDS
Parkstone Moderate Foundation Fund MONEY MARKET FUNDS
Parkstone Equity Income Fund Parkstone Prime Obligations Fund
Parkstone U.S. Government Obligations
TAX-FREE INCOME FUNDS Fund
Parkstone Municipal Bond Fund Parkstone Treasury Fund
Parkstone Michigan Municipal Bond Fund Parkstone Tax-Free Fund
================================================================================
Supplement dated December 20, 1996
to Prospectus dated October 8, 1996
as Supplemented October 16, 1996
1. Investors are advised that the Parkstone Moderate Foundation Fund,
formerly known as the Parkstone Balanced Fund, has been renamed the Parkstone
Balanced Allocation Fund. All references contained in the Prospectus to this
Fund are changed accordingly.
2. On page 9 of the Prospectus in the table under the heading "Annual
Fund Operating Expenses", the fees and expenses for the Large Capitalization
Fund are revised as follows:
Total
Management 12b-1 Other Operating
Fees Fees Expenses Expenses
---- ---- -------- --------
Large Capitalization Fund 0.80% 0.00% 0.33% 1.13%
3. Also on page 9 of the Prospectus, the discussion of the annual fund
operating expenses absent voluntary fee reductions for the Large Capitalization
Fund is revised as follows:
The annual percentage of Other Expenses for the Large Capitalization
Fund is based on expenses incurred since commencement of operations
and expected voluntary reductions. Absent the expected voluntary
reduction of administration fees, Other Expenses and Total Expenses
would be 0.35% and 1.15%, respectively.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
<PAGE> 7
4. On page 10 of the Prospectus, in the tables under the heading "Expense
Examples," the expenses for the Large Capitalization Fund, rounded to the
nearest dollar on a $1,000 investment in Institutional Shares, assuming (1) 5%
annual return and (2) redemption at the end of each time period, are revised as
follows:
1 Year 3 Years
------ -------
Large Capitalization Fund $12 $36
5. On page 55 of the Prospectus, the first paragraph under the heading
"Exchange Privilege" is revised as follows:
The exchange privilege enables shareholders of Institutional Shares to
acquire Institutional Shares that are offered by another Fund of the
Group with a different investment objective. Except in the case of
holders of Investor C Shares wishing to exchange their shares for
Investor A Shares of any of the Money Market Funds, holders of shares
of one class may not exchange their shares for shares of another
class. For example, holders of a Fund's Investor B Shares may not
exchange their shares for Institutional Shares, and holders of
Institutional Shares may not exchange their shares for Investor B
Shares.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUS FOR FUTURE REFERENCE
Page 2
<PAGE> 8
THE PARKSTONE GROUP OF FUNDS
INVESTOR A SHARES
INVESTOR B SHARES
INVESTOR C SHARES
INSTITUTIONAL SHARES
GROWTH FUNDS INCOME FUNDS
Parkstone Small Capitalization Fund Parkstone Bond Fund
Parkstone Mid Capitalization Fund Parkstone Limited Maturity Bond Fund
Parkstone Large Capitalization Fund Parkstone Intermediate Government
Parkstone International Discovery Fund Obligations Fund
Parkstone Emerging Markets Fund Parkstone U.S. Government Income Fund
GROWTH AND INCOME FUNDS MONEY MARKET FUNDS
Parkstone Moderate Foundation Fund Parkstone Prime Obligations Fund
Parkstone Equity Income Fund Parkstone U.S. Government
Obligations Fund
TAX-FREE INCOME FUNDS Parkstone Treasury Fund
Parkstone Municipal Bond Fund Parkstone Tax-Free Fund
Parkstone Michigan Municipal Bond Fund Parkstone Municipal Investor Fund
================================================================================
Supplement dated December 20, 1996
to Statement of Additional Information
dated October 8, 1996 as Supplemented October 16, 1996
Investors are advised of revisions to paragraphs 7, 8, and 9 following
the heading "Distributor" in the Statement of Additional Information. The
paragraphs are revised to read as follows:
For the fiscal year ended June 30, 1996, BISYS received
$2,139,548 pursuant to the Investor A Plan to compensate dealers
for their distribution and shareholder service assistance. Of that
amount, BISYS received $292,663 for payments to FSI and $291,885
for payments to FABC under the Investor A Plan.
For the fiscal year ended June 30, 1996, BISYS received
$1,931,345 pursuant to the Investor B Plan to compensate dealers
for their distribution and shareholder service assistance.
For the fiscal year ended June 30, 1996, BISYS received
$28,213 pursuant to the Investor C Plan to compensate dealers for
their distribution and shareholder service assistance. Of that
amount, BISYS received $12,927 for payments to FSI under the
Investor C Plan.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR STATEMENT OF ADDITIONAL INFORMATION
FOR FUTURE REFERENCE.
