<PAGE>
PEGASUS FUNDS
(THE "TRUST")
MONEY MARKET FUND
TREASURY MONEY MARKET FUND
MUNICIPAL MONEY MARKET FUND
MICHIGAN MUNICIPAL MONEY MARKET FUND
SUPPLEMENT DATED FEBRUARY 1, 1999 TO
MONEY MARKET FUNDS PROSPECTUS DATED APRIL 30, 1998
This Supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
the Prospectus.
* * *
First Chicago NBD Investment Management Company ("FCNIMCO") currently
provides investment advisory services to each of the investment portfolios of
Pegasus. Banc One Corporation recently merged with First Chicago NBD
Corporation, the parent company of FCNIMCO. The combined entity is called "Bank
One Corporation." Banc One Investment Advisors Corporation, a subsidiary of Bank
One Corporation, provides investment advisory services to each of the investment
portfolios offered by The One Group(R). Like the Trust, The One Group(R) is a
mutual fund. Bank One Corporation has since taken steps to consolidate the
mutual fund investment advisory activities of its subsidiaries. On January 12,
1999, The Board of Trustees of the Trust approved an Agreement and Plan of
Reorganization (the "Agreement") between the Trust and The One Group(R). The
Agreement, which provides for the reorganization of the Trust into The One
Group(R), will be submitted to a vote of the shareholders of the Trust at the
meeting to be held on March 17, 1999. Only shareholders of record on December
18, 1998 will vote on the reorganization. If the Agreement is approved by
shareholders, and certain other conditions are satisfied, the assets and
liabilities of each of the Trust's portfolios will be transferred to similar
funds of The One Group(R), and the shareholders of the Trust's portfolios will
become shareholders of The One Group(R). As a result, each portfolio described
in this Prospectus would reorganize into the corresponding fund of The One
Group(R) indicated below:
PEGASUS PORTFOLIO ONE GROUP(R) FUND
Money Market Fund Prime Money Market Fund
Treasury Money Market Fund U.S. Treasury Securities Money Market
Fund
Municipal Money Market Fund Municipal Money Market Fund
Michigan Municipal Money Market Fund Michigan Municipal Money Market Fund
It is expected that certain of the Trust's portfolios will sell a portion
of their portfolio securities prior to their reorganization with The One
Group(R), and will distribute all of their realized taxable capital gains to
shareholders. These distributions will be taxable to shareholders,
<PAGE>
although some or all of the distributions may, in effect, be a return of capital
for new investors. Investors should contact their tax advisors before investing.
February 1, 1999
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
<PAGE>
PEGASUS FUNDS
(THE "TRUST")
MANAGED ASSETS CONSERVATIVE FUND
MANAGED ASSETS BALANCED FUND
MID-CAP OPPORTUNITY FUND
GROWTH AND VALUE FUND
BOND FUND
MONEY MARKET FUND
SUPPLEMENT DATED FEBRUARY 1, 1999 TO
CLASS I PROSPECTUS DATED APRIL 30, 1998
This Supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
the Prospectus.
* * *
1. First Chicago NBD Investment Management Company ("FCNIMCO") currently
provides investment advisory services to each of the investment portfolios of
Pegasus. Banc One Corporation recently merged with First Chicago NBD
Corporation, the parent company of FCNIMCO. The combined entity is called "Bank
One Corporation." Banc One Investment Advisors Corporation, a subsidiary of Bank
One Corporation, provides investment advisory services to each of the investment
portfolios offered by The One Group(R). Like the Trust, The One Group(R) is a
mutual fund. Bank One Corporation has since taken steps to consolidate the
mutual fund investment advisory activities of its subsidiaries. On January 12,
1999, The Board of Trustees of the Trust approved an Agreement and Plan of
Reorganization (the "Agreement") between the Trust and The One Group(R). The
Agreement, which provides for the reorganization of the Trust into The One
Group(R), will be submitted to a vote of the shareholders of the Trust at the
meeting to be held on March 17, 1999. Only shareholders of record on December
18, 1998 will vote on the reorganization. If the Agreement is approved by
shareholders, and certain other conditions are satisfied, the assets and
liabilities of each of the Trust's portfolios will be transferred to similar
funds of The One Group(R), and the shareholders of the Trust's portfolios will
become shareholders of The One Group(R). As a result, each portfolio described
in this Prospectus would reorganize into the corresponding fund of The One
Group(R) indicated below:
PEGASUS PORTFOLIO ONE GROUP(R) FUND
Managed Assets Conservative Fund Investor Balanced Fund
Managed Assets Balanced Fund Investor Growth & Income Fund
Mid-Cap Opportunity Fund Diversified Mid Cap Fund
Growth and Value Fund Value Growth Fund
Bond Fund Bond Fund
Money Market Fund Prime Money Market Fund
<PAGE>
It is expected that certain of the Trust's portfolios will sell a portion
of their portfolio securities prior to their reorganization with The One
Group(R), and will distribute all of their realized taxable capital gains to
shareholders. These distributions will be taxable to shareholders, although
some or all of the distributions may, in effect, be a return of capital for new
investors. Investors should contact their tax advisors before investing.
2. There have been changes in the portfolio managers of the portfolios.
Accordingly, the fourth through seventh full paragraphs on p. 18 under
`MANAGEMENT OF THE TRUST - Investment Adviser and Co-Administrators" are
replaced in their entirety as follows:
Each of the Asset Allocation, Equity Income, Intrinsic Value, Mid-Cap
Opportunity, Small-Cap Opportunity, Growth and Value and Growth Funds is managed
by a team of portfolio managers, research analysts, and other investment
management professionals. Each team member may make recommendations about the
securities in a Fund. The research analysts provide in-depth industry analysis
and recommendations, while the portfolio managers determine strategy, industry
weightings, Fund holdings, and cash positions.
The eighth full paragraph on p. 18 is replaced in its entirety by the following:
CLYDE L. CARTER, JR., Vice President, is primarily responsible for the day-
to-day portfolio management of the International Equity Fund. Mr. Carter joined
FCN in 1987.
The ninth paragraph on page 18 and the first and second full paragraphs on page
20 are replaced in their entirety as follows:
Each of the Intermediate Bond, Bond, Short Bond, and Multi-Sector Bond
Funds is managed by a team of portfolio managers, research analysts and fixed
income traders. A team works together to establish general duration and sector
strategies for a Fund. Each team member may make recommendations about
securities in a Fund. The research analysts and trading personnel provide
individual security and sector recommendations, while the portfolio managers
select and allocate individual securities in a manner designed to meet the
investment objectives of a Fund.
February 1, 1999
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
<PAGE>
PEGASUS FUNDS
(THE "TRUST")
CASH MANAGEMENT FUND
TREASURY CASH MANAGEMENT FUND
TREASURY PRIME CASH MANAGEMENT FUND
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
MUNICIPAL CASH MANAGEMENT FUND
SUPPLEMENT DATED FEBRUARY 1, 1999 TO
CASH MANAGEMENT PROSPECTUS DATED APRIL 30, 1998
This Supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
the Prospectus.
* * *
First Chicago NBD Investment Management Company ("FCNIMCO") currently
provides investment advisory services to each of the investment portfolios of
Pegasus. Banc One Corporation recently merged with First Chicago NBD
Corporation, the parent company of FCNIMCO. The combined entity is called "Bank
One Corporation." Banc One Investment Advisors Corporation, a subsidiary of Bank
One Corporation, provides investment advisory services to each of the investment
portfolios offered by The One Group(R). Like the Trust, The One Group(R) is a
mutual fund. Bank One Corporation has since taken steps to consolidate the
mutual fund investment advisory activities of its subsidiaries. On January 12,
1999, The Board of Trustees of the Trust approved an Agreement and Plan of
Reorganization (the "Agreement") between the Trust and The One Group(R). The
Agreement, which provides for the reorganization of the Trust into The One
Group(R), will be submitted to a vote of the shareholders of the Trust at the
meeting to be held on March 17, 1999. Only shareholders of record on December
18, 1998 will vote on the reorganization. If the Agreement is approved by
shareholders, and certain other conditions are satisfied, the assets and
liabilities of each of the Trust's portfolios will be transferred to similar
funds of The One Group(R), and the shareholders of the Trust's portfolios will
become shareholders of The One Group(R). As a result, each portfolio described
in this Prospectus would reorganize into the corresponding fund of The One
Group(R) indicated below:
PEGASUS PORTFOLIO ONE GROUP(R) FUND
Cash Management Fund Cash Management Money Market Fund
Treasury Cash Management Fund Treasury Cash Management Money Market
Fund
Treasury Prime Cash Management Fund Treasury Prime Cash Management Money
Market Fund
U.S. Government Securities Cash U.S. Government Securities Cash
Management Fund Management Money Market Fund
Municipal Cash Management Fund Municipal Cash Management Money Market
Fund
<PAGE>
It is expected that certain of the Trust's portfolios will sell a portion
of their portfolio securities prior to their reorganization with The One
Group(R), and will distribute all of their realized taxable capital gains to
shareholders. These distributions will be taxable to shareholders, although
some or all of the distributions may, in effect, be a return of capital for new
investors. Investors should contact their tax advisors before investing.
February 1, 1999
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
<PAGE>
Pegasus Funds
(the "Trust")
MANAGED ASSETS CONSERVATIVE FUND
MANAGED ASSETS BALANCED FUND
MANAGED ASSETS GROWTH FUND
EQUITY INCOME FUND
GROWTH FUND
MID-CAP OPPORTUNITY FUND
SMALL-CAP OPPORTUNITY FUND
INTRINSIC VALUE FUND
GROWTH AND VALUE FUND
EQUITY INDEX FUND
INTERNATIONAL EQUITY FUND
INTERMEDIATE BOND FUND
BOND FUND
SHORT BOND FUND
MULTI SECTOR BOND FUND
HIGH YIELD BOND FUND
MONEY MARKET FUND
SUPPLEMENT DATED FEBRUARY 1, 1999 TO
RETIREMENT PLANS PROSPECTUS DATED APRIL 30, 1998
This Supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
the Prospectus.
* * *
1. First Chicago NBD Investment Management Company ("FCNIMCO") currently
provides investment advisory services to each of the investment portfolios of
Pegasus. Banc One Corporation recently merged with First Chicago NBD
Corporation, the parent company of FCNIMCO. The combined entity is called "Bank
One Corporation." Banc One Investment Advisors Corporation, a subsidiary of Bank
One Corporation, provides investment advisory services to each of the investment
portfolios offered by The One Group(R). Like the Trust, The One Group(R) is a
mutual fund. Bank One Corporation has since taken steps to consolidate the
mutual fund investment advisory activities of its subsidiaries. On January 12,
1999, The Board of Trustees of the Trust approved an Agreement and Plan of
Reorganization (the "Agreement") between the Trust and The One Group(R). The
Agreement, which provides for the reorganization of the Trust into The One
Group(R), will be submitted to a vote of the shareholders of the Trust at the
meeting to be held on March 17, 1999. Only shareholders of record on December
18, 1998 will vote on the reorganization. If the Agreement is approved by
shareholders, and certain other conditions are satisfied, the assets and
liabilities of each of the Trust's portfolios will be transferred to similar
funds of The One Group(R), and the shareholders of the Trust's portfolios will
become shareholders of The One Group(R). As a result, each portfolio described
in this Prospectus would reorganize into the corresponding fund of The One
Group(R) indicated below:
<PAGE>
<TABLE>
<CAPTION>
PEGASUS PORTFOLIO ONE GROUP(R) FUND
<S> <C>
Managed Assets Conservative Fund Investor Balanced Fund
Managed Assets Balanced Fund Investor Growth & Income Fund
Managed Assets Growth Fund Investor Growth Fund
Equity Income Fund Income Equity Fund
Growth Fund Large Company Growth Fund
Mid-Cap Opportunity Fund Diversified Mid Cap Fund
Small-Cap Opportunity Fund Small Cap Value Fund
Intrinsic Value Fund Disciplined Value Fund
Growth and Value Fund Value Growth Fund
Equity Index Fund Equity Index Fund
International Equity Fund Diversified International Fund
Intermediate Bond Fund Intermediate Bond Fund
Bond Fund Bond Fund
Short Bond Fund Limited Volatility Bond Fund
Multi Sector Bond Fund Income Bond Fund
High Yield Bond Fund High Yield Bond Fund
Money Market Fund Prime Money Market Fund
</TABLE>
It is expected that certain of the Trust's portfolios will sell a portion
of their portfolio securities prior to their reorganization with The One
Group(R), and will distribute all of their realized taxable capital gains to
shareholders. These distributions will be taxable to shareholders, although
some or all of the distributions may, in effect, be a return of capital for new
investors. Investors should contact their tax advisors before investing.
2. There have been changes in the portfolio managers of the portfolios.
Accordingly, the third through sixth paragraphs on page 23 under "MANAGEMENT OF
THE TRUST - Investment Adviser and Co-Administrators" are replaced in their
entirety with the following:
Each of the Asset Allocation, Equity Income, Intrinsic Value, Mid-Cap
Opportunity, Small-Cap Opportunity, Growth and Value and Growth Funds is managed
by a team of portfolio managers, research analysts, and other investment
management professionals. Each team member may make recommendations about the
securities in a Fund. The research analysts provide in-depth industry analysis
and recommendations, while the portfolio managers determine strategy, industry
weightings, Fund holdings, and cash positions.
The seventh paragraph on page 23 is replaced in its entirety as follows:
CLYDE L. CARTER, JR., Vice President, is primarily responsible for the day-
to-day portfolio management of the International Equity Fund. Mr. Carter joined
FCN in 1987.
The eighth, ninth and tenth paragraphs on page 23 under are replaced in their
entirety as follows:
<PAGE>
Each of the Intermediate Bond, Bond, Short Bond and Multi-Sector Bond Funds
is managed by a team of portfolio managers, research analysts and fixed income
traders. A team works together to establish general duration and sector
strategies for a Fund. Each team member may make recommendations about
securities in a Fund. The research analysts and trading personnel provide
individual security and sector recommendations, while the portfolio managers
select and allocate individual securities in a manner designed to meet the
investment objectives of a Fund.
3. FCNIMCO has given notice of termination to Federated Investment Counseling,
which currently serves as sub-adviser to the Pegasus High Yield Bond Fund. Such
termination becomes effective March 18, 1999.
February 1, 1999
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
<PAGE>
PEGASUS FUNDS
(THE "TRUST")
MANAGED ASSETS CONSERVATIVE FUND
MANAGED ASSETS BALANCED FUND
MANAGED ASSETS GROWTH FUND
EQUITY INCOME FUND
GROWTH FUND
MID-CAP OPPORTUNITY FUND
SMALL-CAP OPPORTUNITY FUND
INTRINSIC VALUE FUND
GROWTH AND VALUE FUND
EQUITY INDEX FUND
MARKET EXPANSION INDEX FUND
INTERNATIONAL EQUITY FUND
INTERMEDIATE BOND FUND
BOND FUND
SHORT BOND FUND
MULTI SECTOR BOND FUND
HIGH YIELD BOND FUND
MUNICIPAL BOND FUND
SHORT MUNICIPAL BOND FUND
INTERMEDIATE MUNICIPAL BOND FUND
MICHIGAN MUNICIPAL BOND FUND
SUPPLEMENT DATED FEBRUARY 1, 1999 TO
PROSPECTUS DATED APRIL 30, 1998
This Supplement provides new and additional information beyond that
contained in the Prospectus and should be retained and read in conjunction with
the Prospectus.
* * *
1. First Chicago NBD Investment Management Company ("FCNIMCO") currently
provides investment advisory services to each of the investment portfolios of
Pegasus. Banc One Corporation recently merged with First Chicago NBD
Corporation, the parent company of FCNIMCO. The combined entity is called "Bank
One Corporation." Banc One Investment Advisors Corporation, a subsidiary of Bank
One Corporation, provides investment advisory services to each of the investment
portfolios offered by The One Group(R). Like the Trust, The One Group(R) is a
mutual fund. Bank One Corporation has since taken steps to consolidate the
mutual fund investment advisory activities of its subsidiaries. On January 12,
1999, The Board of Trustees of the Trust approved an Agreement and Plan of
Reorganization (the "Agreement") between the Trust and The One Group(R). The
Agreement, which provides for the reorganization of the Trust into The One
Group(R), will be submitted to a vote of the shareholders of the Trust at the
meeting to be held on March 17, 1999. Only shareholders of record on December
18, 1998 will vote on the reorganization. If the
<PAGE>
Agreement is approved by shareholders, and certain other conditions are
satisfied, the assets and liabilities of each of the Trust's portfolios will be
transferred to similar funds of The One Group(R), and the shareholders of the
Trust's portfolios will become shareholders of The One Group(R). As a result,
each portfolio described in this Prospectus would reorganize into the
corresponding fund of The One Group(R) indicated below:
PEGASUS PORTFOLIO ONE GROUP(R) FUND
Managed Assets Conservative Fund Investor Balanced Fund
Managed Assets Balanced Fund Investor Growth & Income Fund
Managed Assets Growth Fund Investor Growth Fund
Equity Income Fund Income Equity Fund
Growth Fund Large Company Growth Fund
Mid-Cap Opportunity Fund Diversified Mid Cap Fund
Small-Cap Opportunity Fund Small Cap Value Fund
Intrinsic Value Fund Disciplined Value Fund
Growth and Value Fund Value Growth Fund
Equity Index Fund Equity Index Fund
Market Expansion Index Fund Market Expansion Index Fund
International Equity Fund Diversified International Fund
Intermediate Bond Fund Intermediate Bond Fund
Bond Fund Bond Fund
Short Bond Fund Limited Volatility Bond Fund
Multi Sector Bond Fund Income Bond Fund
High Yield Bond Fund High Yield Bond Fund
Municipal Bond Fund Tax-Free Bond Fund
Short Municipal Bond Fund Short-Term Municipal Bond Fund
Intermediate Municipal Bond Fund Intermediate Tax-Free Bond Fund
Michigan Municipal Bond Fund Michigan Municipal Bond Fund
It is expected that certain of the Trust's portfolios will sell a portion
of their portfolio securities prior to their reorganization with The One
Group(R), and will distribute all of their realized taxable capital gains to
shareholders. These distributions will be taxable to shareholders, although
some or all of the distributions may, in effect, be a return of capital for new
investors. Investors should contact their tax advisors before investing.
2. There have been changes in the portfolio managers of the portfolio.
Accordingly, the second through the sixth paragraphs on page 49 under
"MANAGEMENT OF THE TRUST - Investment Adviser and Co-Administrators" are
replaced in their entirety with the following:
Each of the Asset Allocation, Equity Income, Intrinsic Value, Mid-Cap
Opportunity, Small-Cap Opportunity, Growth and Value and Growth Funds is managed
by a team of portfolio managers, research analysts, and other investment
management professionals. Each team member may make recommendations about the
securities in a Fund. The research analysts provide in-depth industry analysis
and recommendations, while the portfolio managers determine strategy, industry
weightings, Fund holdings, and cash positions.
<PAGE>
The seventh paragraph on page 49 is replaced in its entirety by the following:
CLYDE M. CARTER, Vice President, is primarily responsible for the day-to-
day portfolio management of the International Equity Fund. Mr. Carter joined FCN
in 1987.
The first five full paragraphs on page 50 are replaced with the following:
Each of the Multi-Sector Bond, Intermediate Bond, Bond, Short Bond,
Municipal Bond, Michigan Municipal Bond, Intermediate Municipal Bond and Short
Municipal Bond Funds is managed by a team of portfolio managers, research
analysis and fixed income traders. A Fund's team works together to establish
general duration and sector strategies for the Fund. Each team member may make
recommendations about securities in a Fund. The research analysis and trading
personnel provide individual security and sector recommendations, while the
portfolio managers select and allocate individual securities in a manner
designed to meet the investment objectives of a Fund.
3. FCNIMCO has given notice of termination to Federated Investment Counseling,
which currently serves as sub-adviser to the Pegasus High Yield Bond Fund. Such
termination becomes effective March 18, 1999.
February 1, 1999
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
