VISION GROUP OF FUNDS INC, 485BPOS, 1996-12-20

VISION GROUP OF FUNDS INC
485BPOS, 1996-12-20

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1933 Act File No.
1940 Act File No.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

Pre-Effective Amendment No. ..........

Post-Effective Amendment No. 24 ............ X
--

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 25 ........................... X
- --

VISION GROUP OF FUNDS, INC.

(Exact Name of Registrant as Specified in Charter)

Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

X immediately upon filing pursuant to paragraph (b)
on pursuant to paragraph (b)
------------
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485.
-----------------

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24e-2 under the Investment Company Act of
1940, and:

X filed the Notice required by that Rule on June 14, 1996 ; or
- - -----
intends to file the Notice required by that Rule on or about
; or
during the most recent fiscal year did not sell any securities pursuant
--
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant
to Rule 24f-2(b)(2), need not file the Notice.

Copy to:

Charles H. Morin, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037

CROSS-REFERENCE SHEET

This amendment to the Registration Statement of Vision Group of Funds,
Inc., which is comprised of seven portfolios: (1) Vision Money Market Fund,
(2) Vision Treasury Money Market Fund, (3) Vision New York Tax-Free Money
Market Fund, (4) Vision New York Tax-Free Fund, (5) Vision U.S. Government
Securities Fund, (6) Vision Growth and Income Fund, and (7) Vision Capital
Appreciation Fund, relates only to Vision Capital Appreciation Fund and is
comprised of the following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page...............(1-7) Cover Page.
Item 2. Synopsis.................(1-7) Summary of Fund Expenses.
Item 3. Condensed Financial
Information..............(1-7) Financial Highlights; (1-7) How
the Funds Show Performance.
Item 4. General Description of
Registrant...............(1-7) Synopsis; (1-7) How the Funds
Invest; (1-7) Investment Objective; (1-
7) Investment Policies; (1-7) Acceptable
Investments; (1) Risk Factors Associated
with Foreign Investments; (2,4)
Investment Risks of New York Municipal
Securities; (2,4) Concentration of
Investments; (2,4) Types of Municipal
Securities; Temporary Investments; (1-7)
Common Fund Investment Techniques,
Features and Limitations.
Item 5. Management of the Fund...(1-7) Fund Management, Distribution, and
Administration; (1-7) Board of
Directors; (1-7) Investment Adviser;
Distribution of Fund Shares; (1-7)
Administration of the Funds; (4-7)
Expenses of the Funds.
Item 6. Capital Stock and Other
Securities...............(1-7) Description of Fund Shares; (1-7)
Voting Rights and Other Information; (1-
7) Tax Information.
Item 7. Purchase of Securities Being
Offered..................(1-7) How the Funds Value their Shares;
(1-7) How to Buy Shares; (1-7) How to
Exchange Shares.
Item 8. Redemption or Repurchase.(1-7) How to Redeem Shares.

Item 9. Pending Legal Proceedings None.

PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.

Item 10. Cover Page...............(1-7) Cover Page.
Item 11. Table of Contents........(1-7) Table of Contents.
Item 12. General Information and
History..................(1-7) General Information About the
Fund;
Item 13. Investment Objectives and
Policies.................(1-7) Investment Objective and Policies;
(1-7) Investment Limitations.
Item 14. Management of the Fund...(1-7) vision Group of Funds, Inc.
Management.
Item 15. Control Persons and Principal
Holders of Securities....Not Applicable
Item 16. Investment Advisory and Other
Services.................(1-7) Investment Advisory Services; (1-
7) Administrative Services;
Item 17. Brokerage Allocation.....(1-7) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities...............(1-7) Description of Fund Shares.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered .................(1-7) Purchasing Shares; (1-7)
Determining Net Asset Value; (1-3)
Redeeming Shares; (4-5) Redeeming Fund
Shares; (6-7) How to Redeem Shares.
Item 20. Tax Status...............(1-7) Tax Status.
Item 21. Underwriters.............Not applicable.
Item 22. Calculation of Performance
Data.....................(1-7) Performance Comparisons; (1,3,5,7)
Yield; (2,4) Tax-Equivalent Yield; (2,4)
Tax-Equivalency Table; (4-7) Appendix.
Item 23. Financial Statements (1-6) Incorporated by reference to Part
A of the Registrant's Post-Effective
Amendment No. 23 filed on June 27, 1996,
pursuant to Rule 411 of the 1933 act
(File Nos. 33-202673 and 811-5514); (7)
Filed in Part A.

VISION
U.S. Government
Securities
Fund

Seeks current income by investing primarily in
securities that are guaranteed for payment of principal
and interest by the U.S. Government, its agencies or
instrumentalities (Fund shares themselves are not
guaranteed). Capital appreciation is a
secondary investment consideration.

- --------------------------------------------------------

VISION
New York Tax-Free
Securities
Fund

Seeks current income that is exempt from
federal regular income tax, (some of the income
may be subject to the federal alternative minimum tax)
and New York State and New York City personal income taxes,
and is consistent with preservation of capital.

- --------------------------------------------------------

VISION
Growth and Income
Securities
Fund

Seeks to provide long-term growth of capital and
income by investing in a diversified portfolio consisting
primarily of equity securities (common stock and convertible
securities) and debt securities (bonds and notes).

- --------------------------------------------------------

VISION
Capital Appreciation
Securities
Fund

Seeks to produce long-term capital appreciation,
primarily through a diversified portfolio of
mid-capitalization stocks selected for their ability
to appreciate in value.

- --------------------------------------------------------

VISION
Money Market
Securities
Fund

Seeks current income with liquidity and stability
of principal by investing in high-quality money
market instruments.

- --------------------------------------------------------
VISION
Treasury Money Market
Securities
Fund

Primarily seeks current income with liquidity
and stability of principal by investing in direct
obligations of the U.S. Treasury, which are guaranteed
by the U.S. Government for timely payment of principal
and interest, (Fund shares themselves are not guaranteed),
and repurchase agreements secured by these obligations.

- --------------------------------------------------------

VISION
New York Tax-Free
Securities
Fund
Seeks as high a level of current interest income
that is exempt from federal regular income tax (some
of the income may be subject to the federal alternative
minimum tax) as is consistent with liquidity and relative
stability of principal. In addition, the Fund seeks to
provide income that is exempt from New York State and
New York City personal income taxes.

- --------------------------------------------------------
For more complete information about any of the Vision Funds,
contact (800) 836-2211 for a prospectus. Please read the
prospectus carefully before investing.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------

Dear Shareholder:

I am pleased to present the first report to shareholders for Vision Capital
Appreciation Fund. This document covers the period from July 3, 1996, when the
fund first began operations, through October 31, 1996. Inside, you will find
operating and financial information for the fund including a list of fund
holdings and financial statements.

Vision Capital Appreciation Fund is the newest and most aggressive member of the
Vision family. To help your investment grow over time, it focuses primarily on
stocks issued by mid-size companies selected for their ability to appreciate in
value. These holdings are diversified among key business sectors, while
concentrating on sectors that offer opportunities for value.

In just four months of operation in a favorable stock market environment, the
fund produced a cumulative total return of 9.17% (unadjusted for the fund's
sales charge) resulting from dividends totaling $0.03 per share and an 9%
increase in share price.*

By the end of the period, shareholders had invested a total of $15 million in
Vision Capital Appreciation Fund. Thank you being among the first to take
advantage of the growth potential of mid-size companies through this fund. We
welcome your questions and comments as we keep you informed about the progress
of your investment.

Sincerely,

Edward C. Gonzales
President
December 15, 1996

* Performance quoted is based on net asset value and reflects past performance.
Performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Cumulative total return
for the period adjusted for the fund's sales charge was 3.18%.

A. Please insert the following "Financial Highlights" table as page 4 of the
prospectus. In addition, please add the heading "Financial Highlights" to
the Table of Contents page as the first entry.

VISION CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1996
(UNAUDITED)(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------
Net investment income 0.03
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 0.89
- -------------------------------------------------------------------------------------------- -------
Total from investment operations 0.92
- -------------------------------------------------------------------------------------------- -------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------
Distributions from net investment income (0.03)
- -------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 10.89
- -------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) 9.17%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------
Expenses 0.00%(c)
- --------------------------------------------------------------------------------------------
Net investment income 1.05%(c)
- --------------------------------------------------------------------------------------------
Expense waiver/reimbursement (d) 2.07%(c)
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted)
$14,967
- --------------------------------------------------------------------------------------------
Average commission rate paid 0.0531
- --------------------------------------------------------------------------------------------
Portfolio turnover 8 %
- --------------------------------------------------------------------------------------------
</TABLE>

(a) Reflects operations for the period from July 3, 1996 (date of initial
public investment) to October 31, 1996.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

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

(See Notes which are an integral part of the Financial Statements)

B. Please insert the following as the last sentence of the first paragraph
under the section entitled "Voting Rights and Other Information" on page
23.

"As of December 4, 1996, Reho & Co., Buffalo, New York, owned 75.25% of the
voting securities of the Fund, and, therefore, may for certain purposes be
deemed to control the Fund and be able to affect the outcome of certain
matters presented for a vote of shareholders."

C. Please insert the following Financial Statements after the section
entitled "How the Fund Shows Performance" and before the address page. In
addition, please add the heading "Financial Statements" to the Table of
Contents page after the heading "How the Fund Shows Performance."

VISION CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--93.1%
- --------------------------------------------------------------------------------------------------
AUTO PARTS & EQUIPMENT--1.3%
--------------------------------------------------------------------------------------
8,300 (a)Gentex Corp. $ 197,125
-------------------------------------------------------------------------------------- -------------
BANKING--3.2%
--------------------------------------------------------------------------------------
5,300 Star Banc Corp. 477,000
-------------------------------------------------------------------------------------- -------------
BASIC INDUSTRY--4.7%
--------------------------------------------------------------------------------------
10,000 IMC Global, Inc. 375,000
--------------------------------------------------------------------------------------
4,500 Potash Corporation Sask, Inc. 318,938
-------------------------------------------------------------------------------------- -------------
Total 693,938
-------------------------------------------------------------------------------------- -------------
BUILDING PRODUCTS--2.1%
--------------------------------------------------------------------------------------
9,600 Medusa Corp. 315,600
-------------------------------------------------------------------------------------- -------------
CHEMICALS--0.9%
--------------------------------------------------------------------------------------
8,500 Albemarle Corp. 137,062
-------------------------------------------------------------------------------------- -------------
COMPUTERS--8.6%
--------------------------------------------------------------------------------------
12,300 (a)Banctec, Inc. 250,613
--------------------------------------------------------------------------------------
16,400 (a)Cheyenne Software, Inc. 498,150
--------------------------------------------------------------------------------------
20,500 (a)EMC Corp., Mass 538,125
-------------------------------------------------------------------------------------- -------------
Total 1,286,888
-------------------------------------------------------------------------------------- -------------
</TABLE>

VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
CONSUMER DURABLES--2.5%
--------------------------------------------------------------------------------------
14,000 Oakwood Homes Corp. $ 371,000
-------------------------------------------------------------------------------------- -------------
DIVERSIFIED OPERATIONS--5.0%
--------------------------------------------------------------------------------------
7,200 Harnischfeger Industries, Inc. 288,000
--------------------------------------------------------------------------------------
9,400 Tyco International Ltd. 466,475
-------------------------------------------------------------------------------------- -------------
Total 754,475
-------------------------------------------------------------------------------------- -------------
FINANCE--12.3%
--------------------------------------------------------------------------------------
8,400 Beneficial Corp. 491,400
--------------------------------------------------------------------------------------
19,900 (a)Olympic Financial Ltd. 315,913
--------------------------------------------------------------------------------------
16,600 Schwab (Charles) Corp. 415,000
--------------------------------------------------------------------------------------
20,700 Synovus Financial Corp. 618,412
-------------------------------------------------------------------------------------- -------------
Total 1,840,725
-------------------------------------------------------------------------------------- -------------
FOOD SERVICES--5.0%
--------------------------------------------------------------------------------------
15,400 Flowers Industry, Inc. 359,975
--------------------------------------------------------------------------------------
6,900 (a)Vons Companies, Inc. 382,088
-------------------------------------------------------------------------------------- -------------
Total 742,063
-------------------------------------------------------------------------------------- -------------
HEALTHCARE--4.7%
--------------------------------------------------------------------------------------
15,700 (a)Apria Healthcare Group, Inc. 300,262
--------------------------------------------------------------------------------------
9,000 (a)Healthcare COMPARE Corp. 396,000
-------------------------------------------------------------------------------------- -------------
Total 696,262
-------------------------------------------------------------------------------------- -------------
HOTEL--2.8%
--------------------------------------------------------------------------------------
18,900 (a)Mirage Resorts, Inc. 415,800
-------------------------------------------------------------------------------------- -------------
INDUSTRIAL PRODUCTS--1.1%
--------------------------------------------------------------------------------------
4,600 (a)Thermo Electron Corp. 167,900
-------------------------------------------------------------------------------------- -------------
INSURANCE--1.8%
--------------------------------------------------------------------------------------
9,300 TIG Holdings, Inc. 268,537
-------------------------------------------------------------------------------------- -------------
LOTTERY SERVICES--2.1%
--------------------------------------------------------------------------------------
10,800 (a)Gtech Holdings Corp. 318,600
-------------------------------------------------------------------------------------- -------------
</TABLE>

VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS--5.2%
--------------------------------------------------------------------------------------
10,200 (a)St. Jude Medicine, Inc. $ 402,900
--------------------------------------------------------------------------------------
10,000 (a)Steris Corp. 377,500
-------------------------------------------------------------------------------------- -------------
Total 780,400
-------------------------------------------------------------------------------------- -------------
OIL/GAS--9.0%
--------------------------------------------------------------------------------------
19,400 (a)Global Marine, Inc. 356,475
--------------------------------------------------------------------------------------
7,500 Tosco Corp. 420,937
--------------------------------------------------------------------------------------
6,600 Transocean Offshore, Inc. 417,450
--------------------------------------------------------------------------------------
6,600 Valero Energy Corp. 156,750
-------------------------------------------------------------------------------------- -------------
Total 1,351,612
-------------------------------------------------------------------------------------- -------------
RETAIL--3.9%
--------------------------------------------------------------------------------------
6,800 (a)Consolidated Stores Corp. 262,650
--------------------------------------------------------------------------------------
17,500 (a)Staples, Inc. 325,938
-------------------------------------------------------------------------------------- -------------
Total 588,588
-------------------------------------------------------------------------------------- -------------
SERVICES--2.4%
--------------------------------------------------------------------------------------
12,300 (a)Calenergy, Inc. 356,700
-------------------------------------------------------------------------------------- -------------
TECHNOLOGY--11.9%
--------------------------------------------------------------------------------------
11,400 (a)Analog Devices, Inc. 296,400
--------------------------------------------------------------------------------------
8,400 (a)Cisco Systems, Inc. 519,750
--------------------------------------------------------------------------------------
14,400 (a)Newbridge Networks Corp. 455,400
--------------------------------------------------------------------------------------
3,300 (a)Sun Microsystems, Inc. 201,300
--------------------------------------------------------------------------------------
19,800 (a)Teradyne, Inc. 314,325
-------------------------------------------------------------------------------------- -------------
Total 1,787,175
-------------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--2.0%
--------------------------------------------------------------------------------------
6,000 (a)MFS Communications, Inc. 300,750
-------------------------------------------------------------------------------------- -------------
</TABLE>

(a) Non-income producing security.

(b) The cost of investments for federal tax purposes amounts to $13,777,859. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,030,762 which is comprised of $1,450,200 appreciation and $419,438
depreciation at October 31, 1996.

Note: The categories of investments are shown as a percentage of net assets
($14,966,988) at
October 31, 1996.

(See Notes which are an integral part of the Financial Statements)

VISION CAPITAL APPRECIATION FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified and tax cost $13,777,859) $ 14,808,621
- ---------------------------------------------------------------------------------------------------
Income receivable 7,677
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 137,814
- ---------------------------------------------------------------------------------------------------
Deferred expenses 31,811
- --------------------------------------------------------------------------------------------------- -------------
Total assets 14,985,923
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Accrued expenses 18,935
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 1,373,753 shares outstanding $ 14,966,988
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 13,800,229
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,030,762
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 125,947
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 10,050
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 14,966,988
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share
($14,966,988 / 1,373,753 shares outstanding) $10.89
- --------------------------------------------------------------------------------------------------- -------------
Offering Price Per Share (100/94.50 of $10.89)* $11.52
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>

*See "What Fund Shares Cost" in the Prospectus.

(See Notes which are an integral part of the Financial Statements)

VISION CAPITAL APPRECIATION FUND
STATEMENT OF OPERATIONS
PERIOD ENDED OCTOBER 31, 1996 (UNAUDITED)*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 26,738
- ---------------------------------------------------------------------------------------------------
Interest 15,042
- --------------------------------------------------------------------------------------------------- ------------
Total investment income 41,780
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 33,799
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 16,576
- ---------------------------------------------------------------------------------------
Custodian fees 5,567
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 5,965
- ---------------------------------------------------------------------------------------
Directors' fees 1,193
- ---------------------------------------------------------------------------------------
Legal fees 1,590
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 8,748
- ---------------------------------------------------------------------------------------
Share registration costs 4,771
- ---------------------------------------------------------------------------------------
Printing and postage 1,988
- ---------------------------------------------------------------------------------------
Insurance premiums 795
- ---------------------------------------------------------------------------------------
Taxes 398
- ---------------------------------------------------------------------------------------
Miscellaneous 795
- --------------------------------------------------------------------------------------- ----------
Total expenses 82,185
- ---------------------------------------------------------------------------------------
Waivers and reimbursements--
- ----------------------------------------------------------------------------
Waiver of investment advisory fee ($33,799)
- ----------------------------------------------------------------------------
Waiver of administrative personnel and services fee (16,576)
- ----------------------------------------------------------------------------
Reimbursement of other operating expenses by Adviser (31,810)
- ---------------------------------------------------------------------------- ---------
Total waivers and reimbursements (82,185)
- --------------------------------------------------------------------------------------- ----------
Net expenses --
- --------------------------------------------------------------------------------------------------- ------------
Net investment income 41,780
- --------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments 125,947
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,030,762
- --------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 1,156,709
- --------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 1,198,489
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>

*For the period from July 3, 1996 (date of initial public investment) to October
31, 1996.

(See Notes which are an integral part of the Financial Statements)

VISION CAPITAL APPRECIATION FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,1996*
(UNAUDITED)
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------------------------
Net investment income $ 41,780
- -------------------------------------------------------------------------------------------
Net realized gain on investments ($125,947 net gain as computed
for federal tax purposes) 125,947
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,030,762
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets resulting from operations 1,198,489
- ------------------------------------------------------------------------------------------- ---------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------------------------
Distributions from net investment income (31,730)
- ------------------------------------------------------------------------------------------- ---------------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------------------------
Proceeds from sale of shares 13,772,534
- -------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 31,278
- -------------------------------------------------------------------------------------------
Cost of shares redeemed (3,583)
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets resulting from share transactions 13,800,229
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets 14,966,988
- -------------------------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------------------------
Beginning of period --
- ------------------------------------------------------------------------------------------- ---------------------
End of period (including undisributed net investment income of $10,050) $ 14,966,988
- ------------------------------------------------------------------------------------------- ---------------------
</TABLE>

*For the period from July 3, 1996 (date of initial public investment) to October
31, 1996.

(See Notes which are an integral part of the Financial Statements)

VISION CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------

(1) ORGANIZATION

Vision Group of Funds, Inc. (the "Corporation") is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end,
management investment company. The Corporation consists of seven portfolios. The
financial statements included herein are only those of Vision Capital
Appreciation Fund (the "Fund"), a diversified portfolio. The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held. The investment objective of the Fund is to
produce long-term capital appreciation.

(2) SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.

INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other open-end regulated investment
companies are valued at net asset value.

INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.

FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.

DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred
and are being amortized over a period not to exceed five years from the
Fund's commencement date.

USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.

OTHER--Investment transactions are accounted for on the trade date.

(3) CAPITAL STOCK

At October 31, 1996, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized.

Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1996(A)
<S> <C>
Shares sold 1,371,121
- ------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2,979
- ------------------------------------------------------------------------------------------
Shares redeemed (347)
- ------------------------------------------------------------------------------------------ ------------
Net change resulting from share transactions 1,373,753
- ------------------------------------------------------------------------------------------ ------------
</TABLE>

(a) For the period from July 3, 1996 (date of initial public investment) to
October 31, 1996.

(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISORY FEE--Manufacturers and Traders Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.85% of the Fund's average daily net assets.

The Adviser may voluntarily choose to waive a portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.

ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Corporation for the period.
FAS may voluntarily choose to waive a portion of its fee.

DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund. The Plan provides that the Fund may incur distribution
expenses up to 0.25% of the average daily net assets of the Fund, annually, to
compensate FSC. The Fund did not pay or accrue distribution expenses during the
period ended October 31, 1996.

SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Manufacturers and Traders Trust Company, the Fund will pay Manufacturers
and Traders Trust Company up to 0.25% of average daily net assets of the Fund
for the period. This fee is to obtain certain services for shareholders and to
maintain shareholder accounts. The Fund did not pay or accrue shareholder
services expenses during the period ended October 31, 1996.

TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company, through its subsidiary, Federated Shareholder Services Company
("FSSC"), serves as transfer and dividend disbursing agent for the Fund. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.

ORGANIZATIONAL EXPENSES--Organizational expenses of $21,200 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following effective date. For the period ended
October 31, 1996, the Fund paid $1,178 pursuant to this agreement.

GENERAL--Certain Officers of the Corporation are Officers and Directors or
Trustees of the above companies.

(5) INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1996, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 13,780,852
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 1,001,160
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>

DIRECTORS OFFICERS
- ------------------------------------------------------------------------------------------------
<S> <C>
Randall I. Benderson Edward C. Gonzales
Joseph J. Castiglia President and Treasurer
Daniel R. Gernatt, Jr. Charles L. Davis, Jr.
George K. Hambleton, Jr. Vice President and Assistant Treasurer
Victor R. Siclari
Secretary
C. Todd Gibson
Assistant Secretary
</TABLE>

SHARES OF THE VISION FUNDS ARE NOT FDIC INSURED OR OTHERWISE PROTECTED BY THE
U.S. GOVERNMENT, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY,
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"), AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.

[LOGO of VISION]
SEMI-ANNUAL REPORT
AND SUPPLEMENT
TO PROSPECTUS DATED
JUNE 5, 1996

- ------------------
Vision
Capital
Appreciation
Fund
- ------------------
OCTOBER 31, 1996

Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556

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

Cusip 92830F703
GOO158-O1 (12/96)

[LOGO]

PROSPECTUS

VISION CAPITAL APPRECIATION FUND
(A PORTFOLIO OF VISION GROUP OF FUNDS, INC.)
PROSPECTUS DATED JUNE 5, 1996

Vision Group of Funds, Inc. (the "Corporation") is an open-end management
investment company (a mutual fund) that offers you a choice of seven separate
investment portfolios with distinct investment objectives and policies. This
prospectus relates to one of the seven portfolios, Vision Capital Appreciation
Fund ("Fund").

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
MANUFACTURERS AND TRADERS TRUST COMPANY, ARE NOT ENDORSED OR GUARANTEED BY
MANUFACTURERS AND TRADERS TRUST COMPANY, AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. THESE SHARES INVOLVE INVESTMENT RISKS INCLUDING POSSIBLE LOSS
OF PRINCIPAL.
This prospectus gives you information about the Fund, and can help you decide if
the Fund is a suitable investment for you. Please read the prospectus before you
invest and keep it for future reference.

You can find additional facts about the Fund in the Statement of Additional
Information dated June 5, 1996 which has also been filed with the Securities and
Exchange Commission. The information contained in the Statement of Additional
Information is incorporated by reference into this prospectus. To obtain a free
copy of the Statement of Additional Information or a paper copy of this
prospectus, if you have received it electronically, or make other inquiries
about the Fund, simply call or write Vision Group of Funds, Inc. at the
telephone number or address below.

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.

VISION GROUP OF FUNDS, INC.
P.O. Box 4556
Buffalo, New York 14240-4556
(800) 836-2211 (716) 842-4488

TABLE OF CONTENTS

Synopsis 3
A Summary of the Fund's Expenses 4
How the Fund Invests 5
Fund Management, Distribution
and Administration 12
Your Guide to Using the Fund 15
How the Fund Values Its Shares 15
What Fund Shares Cost 15

How to Buy Shares 18
How to Exchange Shares 19
How to Redeem Shares 21
Tax Information 23
Description of Fund Shares 23
How the Fund Shows Performance 24
Addresses 25

SYNOPSIS

INVESTMENT OBJECTIVES AND POLICIES

Vision Group of Funds, Inc. (the "Corporation") offers you a convenient,
affordable way to participate in seven separate, professionally managed
portfolios. This prospectus describes the Vision Capital Appreciation Fund.

VISION CAPITAL
APPRECIATION FUND
(THE "FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS
TO PRODUCE LONG-TERM CAPITAL APPRECIATION. THE FUND
PURSUES ITS INVESTMENT OBJECTIVE BY INVESTING IN A
DIVERSIFIED PORTFOLIO CONSISTING PRIMARILY OF COMMON
STOCKS THAT THE ADVISER BELIEVES OFFER OPPORTUNITY
FOR GROWTH OF CAPITAL, ALTHOUGH IT MAY ALSO INVEST IN
OTHER SECURITIES HAVING SOME OF THE CHARACTERISTICS
OF COMMON STOCKS, SUCH AS CONVERTIBLE PREFERRED
STOCKS, CONVERTIBLE BONDS AND WARRANTS.

BUYING AND REDEEMING FUND SHARES
You can conveniently buy and redeem Fund shares on almost any business day.
Shares of the Fund are sold at net asset value plus a sales charge and redeemed
at net asset value. The minimum initial investment in the Fund is $500 ($250 for
IRA accounts), and it may be waived or lowered from time to time. (See "Your
Guide to Using the Fund.")

FUND MANAGEMENT
The Fund's investment adviser is Manufacturers and Traders Trust Company ("M&T
Bank" or "Adviser"). M&T Bank is the primary banking subsidiary of First Empire
State Corporation, which also owns The East New York Savings Bank. (See
"Adviser's Background.")

SHAREHOLDER SERVICES

When you become a shareholder, you can easily get information about your account
by calling M&T Bank's Mutual Fund Services at (800) 836-2211 (in the Buffalo
area, phone 842-4488).

RISK FACTORS

An investment in the Fund may involve certain risks that are explained more
fully in the sections of this prospectus discussing the Fund's investment
techniques.

A SUMMARY OF THE FUND'S EXPENSES

Every mutual fund incurs expenses in conducting operations, managing investments
and providing services to shareholders. The following summary breaks out the
Fund's expenses. You should consider this expense information, along with other
information provided in this prospectus, in making your investment decision.

SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).............................................................. 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).............................................................. None
Contingent Deferred Sales Load (as a percentage of original purchase price
or redemption proceeds, as applicable)........................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable)................................ None
Exchange Fee....................................................................................... None
ANNUAL OPERATING EXPENSES
(as a percentage of projected average net assets)
Management Fee..................................................................................... 0.85%
12b-1 Fee (1)...................................................................................... 0.00%
Other Expenses..................................................................................... 0.57%
Shareholder Servicing Fee (1)...................................................... 0.00%
Total Fund Operating Expenses (after waiver) (2)......................................... 1.42%
</TABLE>

(1) The Fund has no present intention of paying or accruing 12b-1 fees or
shareholder servicing fees during the fiscal year ending April 30, 1997. If
the Fund were paying or accruing 12b-1 fees or shareholder servicing fees,
the Fund would be able to pay up to 0.25% of its average daily net assets
for 12b-1 fees and up to 0.25% of its average daily net assets for
shareholder servicing fees. See "Fund Management, Distribution and
Administration."

(2) The Total Fund Operating Expenses absent the voluntary waiver of the
administrative fee by the Administrator are estimated to be 1.51% for the
year ending April 30, 1997. The Total Fund Operating Expenses in the table
above are based on expenses expected during the fiscal year ending April
30, 1997.

The Table above can help you understand the various costs and expenses that
a shareholder in the Fund will bear, either directly or indirectly. For
more complete descriptions of the various costs and expenses, see the
section "Fund Management, Distribution and Administration" on page .
Wire-transferred redemptions of less than $5,000 may be subject to
additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return; (2) redemption at the end of each time period; and (3) payment
of the maximum sales load. The Fund charges no redemption fees................ $ 59 $ 88
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

HOW THE FUND INVESTS

INVESTMENT INFORMATION

INVESTMENT OBJECTIVE

The investment objective of the Fund is to produce long-term capital
appreciation. This investment objective cannot be changed without approval of
the Fund's shareholders. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.

INVESTMENT POLICIES

THE FUND PURSUES ITS INVESTMENT OBJECTIVE OF
LONG-TERM CAPITAL APPRECIATION BY INVESTING IN A
DIVERSIFIED PORTFOLIO COMPRISED PRIMARILY OF COMMON
STOCKS OR OTHER SECURITIES THAT HAVE SOME OF THE
CHARACTERISTICS OF COMMON STOCKS, SUCH AS CONVERTIBLE
PREFERRED STOCKS, CONVERTIBLE BONDS, AND WARRANTS.
THE PRINCIPAL FACTOR IN SELECTING CONVERTIBLE
SECURITIES WILL BE THE POTENTIAL OPPORTUNITY TO
BENEFIT FROM MOVEMENT IN STOCK PRICE.
CURRENT INCOME IS A SECONDARY, NON-
FUNDAMENTAL INVESTMENT CONSIDERATION. THE ADVISER
WILL GENERALLY SELECT COMMON STOCKS OF WELL-FINANCED
ISSUERS (E.G., ISSUERS THAT GENERATE SUFFICENT CASH
FLOW TO SUPPORT THEIR GROWTH NEEDS OR HAVE SUFFICENT
CREDIT QUALITY TO OBTAIN FINANCING TO SUPPORT THEIR
GROWTH) WHICH HAVE DEMONSTRATED PROFITABILITY IN THE
PAST OR HAVE THE POTENTIAL FOR PROFITABILITY IN THE
FUTURE, AND HAVE BEEN IN BUSINESS A MINIMUM OF THREE
YEARS. IT IS ANTICIPATED THAT THE FUND'S PORTFOLIO
SECURITIES IN THE AGGREGATE WILL HAVE AN AVERAGE
WEIGHTED MARKET CAPITALIZATION OF $1 BILLION TO $10
BILLION, WHICH COULD BE CONSIDERED THE
MID-CAPITALIZATION SECTOR OF THE MARKET. THE ADVISER,
MAY, HOWEVER, SELECT FOR PURCHASE COMMON STOCKS OF
WELL-KNOWN COMPANIES WITH INDIVIDUAL MARKET
CAPITALIZATIONS OF OVER $10 BILLION, AS WELL AS
COMPANIES THAT HAVE INDIVIDUAL MARKET
CAPITALIZATIONS AS LOW AS $250 MILLION, IF IT
BELIEVES SUCH COMMON STOCKS OFFER PARTICULAR
OPPORTUNITIES FOR LONG-TERM CAPITAL APPRECIATION.

In selecting investments, the Adviser will consider various financial
characteristics of the issuer, including historical sales and net income,
debt/equity and price/earnings ratios and growth rates. Certain qualitative
factors such as product dominance, management experience, and research and
development commitment will be evaluated. Investors should be aware that since
the major portion of the Fund's portfolio will normally be invested in common
stocks, the Fund's net asset value may be subject to greater fluctuation than a
portfolio containing a substantial amount of fixed income securities. There can
be no assurance that the objective of the Fund will be realized, that any income
will be earned, or that the Fund's portfolio will not decline in value.

Under normal market conditions, the Fund intends to have at least 75% of its
total assets invested in securities which the Adviser believes offer opportunity
for capital appreciation. Unless indicated otherwise, this policy and the other
investment policies of the Fund may be changed by the Directors without approval
of shareholders. Shareholders will be notified before any material changes in
these policies become effective.

ACCEPTABLE INVESTMENTS

The securities in which the Fund invests include:

.common or preferred stocks of U.S. companies which are either listed on the
New York or American Stock Exchange, or other domestic stock exchange, or
traded in the over-the-counter markets and are considered by the Adviser to
have an established market;

.convertible securities (as described below);
.investments in American Depository Receipts ("ADRs") of foreign companies
traded on the New York or American Stock Exchange, or other domestic stock
exchanges, or in the over-the-counter market. The Fund may not invest more
than 25% of its total assets in ADRs and not more than 5% of its total assets
in foreign securities directly (other than ADRs);
.domestic issues of corporate debt obligations (including convertible bonds
and debentures) rated, at the time of purchase, investment grade by a
nationally recognized statistical rating organization ("NRSRO") (e.g., Baa or
higher by Moody's Investors Service, Inc. ("Moody's"), or BBB or higher by
Standard and Poor's Ratings Group ("S&P") or Fitch Investors Service, Inc.
("Fitch")), or, if unrated, of comparable quality as determined by the
Adviser;
.U.S. government securities (as described below);
.for temporary defensive purposes, up to 25% of its total assets in money
market instruments, including commercial paper that, at the time of purchase,
are rated not less than P-1, A-1 or F-1, by Moody's, S&P or Fitch,
respectively, or, if unrated, are of comparable quality as determined by the
Adviser, time and savings deposits (including certificates of deposit) in
domestic and foreign commercial or savings banks, and bankers' acceptances;
and .warrants.In addition, the Fund may purchase the investments and
engage in the investment techniques described below. For additi
information about the investments and
investment techniques, please refer to the Statement of Additional Information.

CONVERTIBLE SECURITIES
The Fund may invest in convertible securities. The Fund will exchange or convert
the convertible securities held in its portfolio into shares of the underlying
common stock when, in the opinion of the Adviser, the investment characteristics
of the underlying common shares will assist the Fund in achieving its investment
objectives. Otherwise the Fund may hold or trade convertible securities. In
selecting convertible securities for the Fund, the Adviser evaluates primarily
the investment potential of the underlying equity security for capital
appreciation and secondarily the investment characteristics of the convertible
security as a fixed income instrument. In evaluating these matters with respect
to a particular convertible security, the Adviser considers numerous factors,
including the economic and political outlook, the value of the security relative
to other investment alternatives, trends in the determinants of the issuer's
profits, and the issuer's management capability and practices.

CORPORATE DEBT OBLIGATIONS
The Fund may invest in corporate debt obligations, including corporate bonds,
notes, and debentures, which may have floating or fixed rates of interest. These
obligations will be rated at the time of purchase in the top four rating
categories (investment grade) by an NRSRO. If the obligations are unrated, they
will be of comparable quality as determined by the Adviser. If any security
purchased by the Fund is subsequently downgraded, securities will be evaluated
on a case by case basis by the Adviser. The Adviser will determine whether or
not the security continues to be an acceptable investment. If not, the security
will be sold. The lowest category of investment grade securities (e.g., Baa or
BBB) have speculative characteristics, and changes in economic conditions or
other circumstances are more likely to lead to a weakened capacity to pay
principal and interest payments on such obligations than higher rated
obligations. A description of the rating categories is contained in the Appendix
to the Statement of Additional Information.
FIXED RATE CORPORATE DEBT OBLIGATIONS
The Fund may invest in fixed rate securities, including fixed rate securities
with short-term characteristics. Fixed rate securities with short-term
characteristics are long-term debt obligations, but are treated in the market as
having short maturities because call features of the securities may make them
callable within a short period of time. A fixed rate security with short-term
characteristics would include a fixed income security priced close to call or
redemption price or a fixed income security approaching maturity, where the
expectation of call or redemption is high.

Fixed rate securities tend to exhibit more price volatility during times of
rising or falling interest rates than securities with floating rates of
interest. This is because floating rate securities, as described below, behave
like short-term instruments in that the rate of interest they pay is subject to
periodic adjustments based on a designated interest rate index. Fixed rate
securities pay a fixed rate of interest and are more sensitive to fluctuating
interest rates. In periods of rising interest rates, the value of a fixed rate
security is likely to fall. Fixed rate securities with short-term
characteristics are not subject to the same price volatility as fixed rate
securities without such characteristics. Therefore, they behave more like
floating rate securities with respect to price volatility.

FLOATING RATE CORPORATE DEBT OBLIGATIONS
The Fund may invest in floating rate corporate debt obligations, including
increasing rate securities. Floating rate securities are generally offered at an
initial interest rate which is at or above prevailing market rates. The interest
rate paid on these securities is then reset periodically (commonly every 90
days) to an increment over some predetermined interest rate index. Commonly
utilized indices include the three-month Treasury bill rate, the 180-day
Treasury bill rate, the one-month or three-month London Interbank Offered Rate
(LIBOR), the prime rate of a bank, the commercial paper rates, or the
longer-term rates on U.S. Treasury securities.
U.S. GOVERNMENT SECURITIES
The Fund may invest in U.S. government securities which include:

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

.obligations of U.S. government agencies or instrumentalities such as the Farm
Credit System, including the National Bank for Cooperatives and Banks for
Cooperatives; Farmers Home Administration; Federal Home Loan Banks; The
Student Loan Marketing Association ("Sallie Mae"); Government National
Mortgage Association ("Ginnie Mae"); Federal Home Loan Mortgage Corporation
("Freddie Mac"); Housing and Urban Development; and Federal National Mortgage
Association ("Fannie Mae").

Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Ginnie Mae 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 instrumentalities
are supported by:

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

.the discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or

.the credit of the agency or instrumentality.

REPURCHASE AGREEMENTS

The Fund may engage in repurchase agreements, which are arrangements in which
banks, broker/dealers, and other recognized financial institutions sell U.S.
government securities or other high quality, liquid securities to the Fund and
agree at the time of sale to repurchase them at a mutually agreed upon time and
price. 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.

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/less than the market value of the securities on the settlement date.

The Fund may dispose of a commitment prior to settlement if the Adviser deems
it appropriate to do so. In addition, the Fund may enter into transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at
later dates. The Fund may realize short-term profits or losses upon the sale of
such commitments.

ILLIQUID AND RESTRICTED SECURITIES

The Fund may invest up to 15% of its net assets in illiquid securities, which
may include restricted securities. Restricted securities are any securities in
which the Fund may otherwise invest pursuant to its investment objective and
policies, but which are subject to restriction on resale under federal
securities laws. To the extent these securities are deemed to be illiquid, the
Fund will limit its purchases, together with other securities not determined by
the Corporation's Board of Directors to be liquid, to 15% of its net assets.

INVESTING IN SECURITIES OF OTHER
INVESTMENT COMPANIES

The Fund may invest in the securities of other investment companies. The Fund
will limit its investment in other investment companies to not more than 3% of
the total outstanding voting stock of any investment company, will invest no
more than 5% of its total assets in any one investment company, and will invest
no more than 10% of its total assets in investment companies in general. In
order to comply with certain state restrictions, the Fund will limit its
investment in securities of other open-end investment companies to those with
sales loads of less than 1.00% of the offering price of such securities. The
Fund will purchase securities of closed-end investment companies only in open
market transactions involving only customary brokers' commissions. However,
these limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. While it is a policy to
waive advisory fees on Fund assets invested in securities of other open-end
investment companies, it should be noted that investment companies incur certain
expenses such as custodian and transfer agency fees and, therefore, any
investment by the Fund in shares of another investment company would be subject
to such duplicate expenses.

LENDING OF PORTFOLIO SECURITIES

In order to generate additional income, the Fund may lend portfolio securities
on a short-term or long-term basis or both up to one-third of the value of its
total assets to broker/dealers, banks, or other institutional borrowers of
securities. The Fund will only enter into loan arrangements with broker/dealers,
banks, or other institutions which the Adviser has determined are creditworthy
under guidelines established by the Corporation's Board of Directors and will
receive collateral in the form of cash or U.S. government securities equal to at
least 100% of the value of the securities loaned.
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 desirable price. In addition, in the
event that a borrower of securities files for bankruptcy or becomes insolvent,
disposition of the securities may be delayed pending court action.

REVERSE REPURCHASE AGREEMENTS

The Fund may also enter into reverse repurchase agreements. This transaction is
similar to borrowing cash.

PUT AND CALL OPTIONS
The Fund may purchase put options on its portfolio securities as a hedge to
attempt to protect these securities against fluctuations in value. The Fund will
write put and call options on securities either held in its portfolio or which
the Fund has the right to obtain without payment of further consideration or for
which it has segregated cash in the amount of any such additional consideration.
The Fund also may purchase call options on securities to protect against price
movements in particular securities which the Fund intends to purchase. A call
option gives the Fund, in return for a premium, the right (but not the
obligation) to buy the underlying security from the seller at a pre-determined
price.

The Fund may generally purchase and write over-the-counter options on portfolio
securities in negotiated transactions with the buyers or writers of the options
since options on certain portfolio securities held by the Fund are not traded on
an exchange. The Fund purchases and writes options only with investment dealers
and other financial institutions (such as commercial banks or broker/dealers)
deemed creditworthy by the Adviser.

Over-the-counter options are two-party contracts with price and terms negotiated
between buyer and seller. In contrast, exchange-traded options are third party
contracts with standardized strike prices and expiration dates and are purchased
from a clearing corporation. Exchange-traded options have a continuous liquid
market while over-the-counter options may not.

If the Fund does not exercise an option it has purchased, then the Fund loses in
value the price it paid for the option premium. If the Fund writes (sells) an
option which is subsequently exercised, the premium received by the Fund from
the option purchaser may not exceed the increase (in the case of a call option)
or decrease (in the case of a put option ) in the value of the securities
underlying the option, in which case the difference represents a loss for the
Fund. However, if the option expires without being exercised, the Fund realizes
a gain in the amount of the premium it received.
FUTURES AND OPTIONS ON FUTURES

The Fund may purchase and sell financial and stock index futures contracts to
attempt to hedge all or a portion of its portfolio against changes in interest
rates or economic market conditions. Financial futures contracts generally
require the delivery of particular debt instruments at a certain time in the
future. The seller of the contract agrees to make delivery of the type of
instrument called for in the contract, and the buyer agrees to take delivery of
the instrument at the specified future time. Stock index futures contracts
generally involve cash settlement rather than delivery of the stocks comprising
the index.

The Fund may also write call options and purchase put options on financial or
stock index futures contracts as a hedge to attempt to protect securities in its
portfolio against decreases in value. When the Fund writes a call option on a
futures contract, it is undertaking the obligation of selling a futures contract
at a fixed price at any time during a specified period if the option is
exercised. Conversely, as purchaser of a put option on a futures contract, the
Fund is entitled (but not obligated) to sell a futures contract at the fixed
price during the life of the option.

Generally, the Fund may not purchase or sell futures contracts or related
options if immediately thereafter the sum of the amount of margin deposits on
the Fund's existing futures positions and premiums paid for related options
would exceed 5% of the market value of the Fund's total assets. When the Fund
purchases futures contracts, an amount of cash and cash equivalents equal to the
underlying commodity value of the futures contracts (less any related margin
deposits) will be deposited in a segregated account with the Fund's custodian
(or the broker, if legally permitted) to collateralize the position and thereby
insure that the use of such futures contract is unleveraged.

RISKS
When the Fund uses futures and options on futures as hedging devices, there is a
risk that the prices of the securities subject to the futures contracts may not
correlate with the prices of the securities in the Fund's portfolio. This may
cause the futures contract and any related options to react differently than the
portfolio securities to market changes. In addition, the Adviser could be
incorrect in its expectations about the direction or extent of market factors
such as interest rate movements. In these events, the Fund may lose money on the
futures contract or option.

It is not certain that a secondary market for positions in futures contracts or
for options will exist at all times. Although the Adviser will consider
liquidity before entering into futures or options transactions, there is no
assurance that a liquid secondary market on an exchange or otherwise will exist
for any particular futures contract or option at any particular time. The Fund's
ability to establish and close out futures and options positions depends on this
secondary market.

WARRANTS

The Fund has no present intent to invest more than 5% of its net assets in
warrants.
DERIVATIVE CONTRACTS AND SECURITIES

The term "derivative" has traditionally been applied to certain contracts
(including futures and option contracts) that "derive" their value from changes
in the value of an underlying security, currency, commodity or index. Certain
types of securities that incorporate the performance characteristics of these
contracts are also referred to as "derivatives." The term has also been applied
to securities "derived" from the cash flows from underlying securities,
mortgages or other obligations.

Derivative contracts and securities can be used to reduce or increase the
volatility of an investment portfolio's total performance. While the response of
certain derivative contracts and securities to market changes may differ from
traditional investments, such as stock and bonds, derivatives do not necessarily
present greater market risks than traditional investments. The Fund will only
use derivative contracts for the purposes disclosed in the applicable prospectus
sections above. To the extent that the Fund invests in securities that could be
characterized as derivatives, it will only do so in a manner consistent with its
investment objectives, policies and limitations.

INVESTMENT RISKS

As with other mutual funds that invest in equity securities, the Fund is subject
to market risks. That is, the possibility exists that common stocks will decline
over short or even extended periods of time, and the United States equity market
tends to be cyclical, experiencing both periods when stock prices generally
increase and periods when stock prices generally decrease.
Because the Fund may invest in small-to-
medium capitalization stocks, there are some additional risk factors associated
with investments in the Fund. In particular, although their potential for growth
may be greater, stocks in the small-to-medium capitalization sector of the
United States equity market tend to be slightly more volatile in price than
larger capitalization stocks, such as those included in the S&P 500 Index. This
is because, among other things, small-to-medium-sized companies have less
certain growth prospects than larger companies, have a lower degree of liquidity
in the equity market, and tend to have a greater sensitivity to changing market
conditions. Further, in addition to exhibiting slightly higher volatility, the
stocks of small-to-medium-sized companies may, to some degree, fluctuate
independently of the stocks of larger companies. That is, the stocks of
small-to-medium-sized companies may decline in price as the price of large
company stocks rises or vice versa. Therefore, investors should expect that the
Fund will be slightly more volatile than, and may fluctuate independently of,
broad stock market indices such as the S&P 500 Index.

With respect to the debt obligations which the Fund may purchase, their prices
move inversely to interest rates. A decline in market interest rates results in
a rise in the market prices of outstanding debt obligations. Conversely, an
increase in market interest rates results in a decline in market prices of
outstanding debt obligations. In either case, the amount of change in market
prices of debt obligations in response to changes in market interest rates
generally depends on the maturity of the debt obligations: the debt obligations
with the longest maturities will experience the greatest market price changes.

The market value of debt obligations, and therefore the Fund's net asset value,
will fluctuate due to changes in economic conditions and other market factors
such as interest rates which are beyond the control of the Adviser. The Adviser
could be incorrect in its expectations about the direction or extent of these
market factors. Although debt obligations with longer maturities offer
potentially greater returns, they have greater exposure to market price
fluctuation. Consequently, to the extent the Fund is significantly invested in
debt obligations with longer maturities, there is a greater possibility of
fluctuation in the Fund's net asset value.

INVESTMENT LIMITATIONS

The Fund will not:

.borrow money directly or through reverse repurchase agreements (arrangements
in which the Fund sells a portfolio instrument for a percentage of its cash
value with an agreement to buy it back on a set date) or pledge securities
except, under certain circumstances, the Fund may borrow up to one-third of
the value of its total assets and pledge up to 15% of the value of its total
assets to secure such borrowings; and

.with respect to 75% of the value of its total assets, invest more than 5% of
its total assets in securities of one issuer other than cash, cash items, or
securities issued or guaranteed by the government of the United States or its
agencies or instrumentalities and repurchase agreements collateralized by
such securities, or acquire more than 10% of the voting securities of any one
issuer.

The above investment limitations cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Board of Directors
without shareholder approval. Shareholders will be notified before any material
change in this limitation becomes effective.

The Fund will not invest more than 15% of its net assets in illiquid securities.

FUND MANAGEMENT,
DISTRIBUTION AND
ADMINISTRATION

BOARD OF DIRECTORS

THE FUND IS MANAGED BY A BOARD OF DIRECTORS.

The Directors are responsible for managing the business affairs for the Fund and
for exercising all the Fund's powers except those reserved for the shareholders.

INVESTMENT ADVISER

INVESTMENT DECISIONS FOR THE FUND ARE MADE BY M&T
BANK, SUBJECT TO DIRECTION BY THE DIRECTORS.

The Adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase or sale of portfolio instruments, for
which it receives an annual fee from the Fund.

Both the Corporation and the Adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Fund and its portfolio
securities. These codes recognize that such persons owe a fiduciary duty to the
Fund's shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Corporation's Board
of Directors and could result in severe penalties.

ADVISORY FEES

For the services M&T Bank provides and the expenses it assumes as investment
adviser, M&T Bank is entitled to receive a fee from the Fund, equal to an annual
rate of .85% of the Fund's average daily net assets. This fee is computed daily
and paid monthly. M&T Bank has agreed to pay all expenses it incurs in
connection with its advisory activities, other than the cost of securities
(including any brokerage commissions) purchased for the Fund. From time to time,
M&T Bank may voluntarily waive all or a portion of its advisory fees in order to
help the Fund maintain a competitive expense ratio or to meet state limitations
on expense ratios.

ADVISER'S BACKGROUND

M&T Bank is the primary banking subsidiary of First Empire State Corporation, a
$12 billion bank holding company, as of December 31, 1995, headquartered in
Buffalo, New York. M&T Bank had $10.2 billion in assets, as of December 31,
1995, has 121 offices throughout western New York State and New York's Southern
Tier, 22 offices in the Hudson Valley region of New York State, plus offices in
New York City, Albany, Syracuse, and Nassau, the Bahamas. First Empire State
Corporation also owns The East New York Savings Bank, which, as of Decem-
ber 31, 1995, has 16 offices throughout metropolitan New York City.

M&T Bank was founded in 1856 and provides comprehensive banking and financial
services to individuals, governmental entities and businesses throughout New
York State. The Fund's investments are managed through the Trust & Investment
Services Division of M&T Bank. As of December 31, 1995, M&T Bank had $1.8
billion in assets under management for which it has investment discretion (which
includes employee benefits, personal trusts, estates, agencies and other
accounts). M&T Bank has served as investment adviser to various funds of the
Corporation since 1988. As of December 31, 1995, M&T Bank managed over $884
million in assets of the Corporation's money market funds. As part of its
regular banking operations, M&T Bank 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 M&T Bank. The lending
relationship will not be a factor in the selection of securities.

The Fund is managed by John F. Moore. Mr. Moore joined M&T Bank in October, 1995
as Senior Vice President and Chief Investment Officer. His 18 years of
investment experience includes five years with Value Line Asset Management, New
York where he most recently was the Director of Asset Management and Senior
Portfolio Manager. Mr. Moore obtained his B.A. and M.B.A. from the University of
North Carolina.

DISTRIBUTION OF FUND SHARES

FEDERATED SECURITIES CORP. IS THE PRINCIPAL
DISTRIBUTOR FOR SHARES OF THE FUND.
Shares of the Fund are sold on a continuous basis by Federated Securities Corp.
It is a Pennsylvania corporation organized on November 14, 1969, and is also the
principal distributor for a number of other investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors, Pittsburgh,
Pennsylvania.

DISTRIBUTION PLAN

Under a distribution plan (referred to as the "Plan") adopted in accordance with
Rule 12b-1 promulgated under the Investment Company Act of 1940, the Fund may
pay to the distributor an amount computed at an annual rate of 0.25% of the
Fund's average daily net assets to finance any activity which is principally
intended to result in the sale of shares subject to the Plan. The distributor
may from time to time and for such periods as it deems appropriate, voluntarily
reduce its 12b-1 compensation under the Plan to the extent the expenses
attributable to shares of the Fund exceed such lower expense limitation as the
distributor may, by notice to the Corporation, voluntarily declare to be
effective. The Fund has no present intention of paying or accruing 12b-1 fees
during the fiscal year ending April 30, 1997.
Financial institutions will receive fees from the distributor based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined from time to time by the
distributor. The Fund's Plan is a compensation type plan. As such, the Fund
makes no payments to the distributor except as described above. Therefore, the
Fund does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it from the
Fund, interest, carrying or other financing charges in connection with excess
amounts expended, or the distributor's overhead expenses. However, the
distributor may be able to recover such amounts or may earn a profit from future
payments made by the Fund under the Plan.

The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Bank Holding Company Act of 1956 or
any affiliate thereof from sponsoring, organizing or controlling a registered,
open-end investment company continuously engaged in the issuance of its shares,
and from issuing, underwriting, selling or distributing securities in general.
Such laws and regulations do not prohibit such a holding company or affiliate
from acting as investment adviser, transfer agent, or custodian to such an
investment company or from purchasing shares of such a company as agent for and
upon the order of their customers.

Some entities providing services to the Fund are subject to such banking laws
and regulations. They believe that they may perform those services for the Fund
contemplated by any agreement entered into with the Fund without violating those
laws or regulations. Changes in either federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of present or future statutes and regulations, could prevent
these entities from continuing to perform all or a part of the above services.
If this happens, the Directors would consider alternative means of continuing
available services. It is not expected that shareholders would suffer any

adverse financial consequences as a result of any of these occurrences.

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

The distributor may select certain entities to provide sales and/or
administrative services as agents for holders of shares of the Fund. For a
description of administrative services, see "Administrative Arrangements" below.

SHAREHOLDER SERVICING ARRANGEMENTS

The Fund has adopted a Shareholder Services Plan, which is administered by
Federated Administrative Services. Under the Plan, M&T Bank may act as a
shareholder servicing agent (the "Shareholder Servicing Agent") for the Fund.
The Fund may pay the Shareholder Servicing Agent a fee based on the average
daily net asset value of shares for which it provides shareholder services.
These shareholder services include, but are not limited to, distributing
prospectuses and other information, providing shareholder assistance and
communicating or facilitating purchases and redemptions of shares. This fee will
be equal to 0.25% of the Fund's average daily net assets for which the
Shareholder Servicing Agent provides services. The Fund will not accrue or pay
any shareholder servicing agent fees until a separate class of shares has been
created for the Fund or the prospectus is amended to reflect the imposition of
fees.

ADMINISTRATIVE ARRANGEMENTS

The distributor may select brokers and dealers to provide distribution and
administrative services. The distributor may also select administrators
(including depository institutions such as commercial banks and savings banks)
to provide administrative services that are not provided by Federated
Administrative Services (see below). These administrative services include
distributing prospectuses and other information, providing accounting assistance
and shareholder communications, or otherwise facilitating shareholder purchases
and redemptions (sales) of Fund shares. The administrators appointed could
include affiliates of the Adviser.

Brokers, dealers, and administrators will receive fees from the distributor
based upon shares owned by their clients or customers. The fees are calculated
as a percentage of the average aggregate net asset value of shareholder accounts
during the period for which the brokers, dealers, and administrators provide
services. If the distributor pays any fees for these services, the fees will be
reimbursed by the Adviser and not the Fund.

ADMINISTRATION OF THE FUND

FEDERATED ADMINISTRATIVE SERVICES, A SUBSIDIARY OF
FEDERATED INVESTORS, PROVIDES THE FUND WITH CERTAIN
ADMINISTRATIVE PERSONNEL AND SERVICES NECESSARY TO
OPERATE THE FUND.

ADMINISTRATIVE SERVICES

Such services include shareholder servicing and certain legal and accounting
services. Federated Administrative Services provides these services for an
annual fee as specified below:
<TABLE>
<CAPTION>
ADMINISTRATIVE AGGREGATE DAILY NET ASSETS OF
FEE VISION GROUP OF FUNDS, INC.
<C> <S>
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>

The administrative fee received during any year shall be at least $50,000 for
the Fund. Federated Administrative Services may choose voluntarily to waive a
portion of its fee at any time.

YOUR GUIDE
TO USING
THE FUND

HOW THE FUND VALUES
ITS SHARES

THE FUND'S NET ASSET VALUE PER SHARE FLUCTUATES.

The net asset value for the Fund's shares is determined by adding the market
value of all securities and other assets of the Fund, subtracting the
liabilities of the Fund and dividing the remainder by the total number of the
Fund's shares outstanding.

MINIMUM INITIAL INVESTMENT

The minimum initial investment in the Fund is $500, unless the investment is in
an IRA account, in which case the minimum initial investment is $250. Subsequent
investments must be in amounts of at least $25. In addition, the minimum initial
and subsequent investment amounts may be waived or lowered from time to time,
such as for customers participating in the automatic investment services
described below.

WHAT FUND SHARES COST
Shares are sold at their net asset value next determined after an order is
received, plus a sales charge as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE
A PERCENTAGE AS A PERCENTAGE
OF PUBLIC OF NET AMOUNT
AMOUNT OF TRANSACTION OFFERING PRICE INVESTED
<S> <C> <C>
Less than $100,000........ 4.50% 4.71%
$100,000 but less than
$250,000................ 3.75% 3.90%
$250,000 but less than
$500,000................ 3.00% 3.09%
$500,000 but less than $1
million................. 2.00% 2.04%
$1 million but less than
$2 million.............. 1.00% 1.01%
$2 million or more........ 0.00% 0.00%
</TABLE>

The net asset value is determined at the close of regular trading on the New
York Stock Exchange, which is generally 4:00 p.m. (Eastern time), Monday through
Friday, except on:

(i) days when the value of the Fund's
portfolio securities do not change sufficiently to materially affect the net
asset value;

(ii) days when no shares are tendered for
redemption by shareholders and no orders to purchase shares are received;
or

(iii) the following holidays: New Year's Day,
Martin Luther King Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

In connection with the sale of Fund shares, Federated Securities Corp. may from
time to time offer certain items of nominal value to any shareholder or
investor.

EXCHANGING SECURITIES FOR FUND SHARES

The Fund may accept securities in exchange for Fund shares. The Fund will allow
such exchanges only upon prior approval of the Fund and a determination by the
Fund and the Adviser that the securities to be exchanged are acceptable.

Any securities exchanged must meet the investment objective and policies of the
Fund, must have a readily ascertainable market value, and must be liquid. The
market value of any securities exchanged in an initial investment, plus any
cash, must be at least equal to the minimum investment in the Fund. The Fund
acquires the exchanged securities for investment and not for resale.

Any interest accrued or dividends declared but not paid on the securities prior
to the exchange will be considered in valuing the securities. All interest,
dividends, subscription or other rights attached to the securities become the
property of the Fund, along with the securities.

If an exchange is permitted, it will be treated as a sale for federal income
tax purposes. Depending upon the cost basis of the securities exchanged for
Fund shares, a gain or loss may be realized by the investor.

SALES CHARGE REALLOWANCE

For sales of shares of the Fund, a broker/dealer will normally receive up to 90%
of the applicable sales charge. Any portion of the sales charge not paid to a
broker/dealer will be retained by the distributor. However, the distributor will
uniformly and periodically offer to pay broker/dealers up to 100% of the sales
charge retained by it. Such payments may take the form of cash, items of
material value, or promotional incentives, such as payment of certain expenses
of qualified employees and their spouses to attend informational meetings about
the Fund or other special events at recreational-type facilities. In some
instances, these incentives will be made available only to broker/dealers whose
employees have sold or may sell significant amounts of shares.

The distributor may pay fees to financial institutions out of the sales charge
in exchange for sales and/or administrative services performed on behalf of
their customers in connection with the initiation of customer accounts and
purchases of shares of the Fund.

In addition, the distributor will offer to pay broker/dealers an amount of up to
1.00% of the net asset value of shares purchased for an account of their client
or customer in an amount of $2 million or more.

The distributor, M&T Bank or its affiliates, at their own expense and out of
their own assets, may also provide other compensation to financial institutions
in connection with sales of shares of the Fund or as financial assistance for
providing substantial marketing, sales and operational support. Compensation may
include, but is not limited to, financial assistance to financial institutions
in connection with conferences, sales, or training programs for their employees,
seminars for the public, advertising or sales campaigns, or other special
events. In some instances, this compensation may be predicated upon the amount
of shares sold and/or upon the type and nature of sales or operational support
they furnish. Dealers may not use sales of the Corporation's shares to qualify
for this compensation to the extent such may be prohibited by the laws of any
state or any self-regulatory agency, such as the National Association of
Securities Dealers, Inc. None of the aforementioned other compensation shall be
paid for by the Corporation, the Fund, or its shareholders, nor will it change
the price paid by investors for the purchase of Fund shares.

PURCHASES AT NET ASSET VALUE

Shares of the Fund may be purchased, subject to applicable law and regulation
from time to time, at net asset value, without a sales charge, by the following
investors, their spouses and their immediate relatives: (i) current and retired
employees and directors of M&T Bank, The East New York Savings Bank, First
Empire State Corporation and their subsidiaries; (ii) current and former
Directors of the Corporation; (iii) clients of the Trust & Investment Services
Division of M&T Bank; (iv) employees (including registered representatives) of a
dealer which has a selling group agreement with the Fund's distributor and
consents to such purchases; (v) current and retired employees of any sub-adviser
to the Vision Group of Funds, Inc.; and (vi) investors referred by any
sub-adviser to the Vision Group of Funds, Inc. Immediate relatives include
grandparents, parents, siblings, children, and grandchildren of a qualified
investor, and the spouse of any immediate relative.

Shares of the Fund may also be purchased, subject to applicable law and
regulation from time to time, at net asset value, without a sales charge, by
employees of clients of the Trust & Investment Services and Commercial Lending
Divisions of M&T Bank within an automatic deduction program. The distributor
will uniformly and periodically offer to pay cash payments as incentives to
broker/dealers whose customers or clients purchase shares of the Fund under this
"no-load" purchase provision. This payment will be made out of the distributor's
assets and not by the Corporation, the Fund, or its shareholders.

A special application form which is available from the Shareholder Servicing
Agent, must be submitted with the initial purchase.

PURCHASES WITH PROCEEDS FROM REDEMPTIONS OF MUTUAL FUND SHARES OR ANNUITIES

Investors may purchase shares of the Fund at net asset value, without a sales
charge, with the proceeds from either: (i) the redemption of shares of a mutual
fund which was sold with a sales charge or commission, or (ii) fixed or variable
rate annuities. The purchase must be made within 60 days of the redemption, and
M&T Bank's Mutual Fund Services must be notified by the investor in writing, or
by the investor's financial institution, at the time the purchase is made, and
must be presented with satisfactory evidence of the redemption. Redemptions of
mutual fund shares that are subject to a contingent deferred sales charge are
not eligible to purchase Fund shares under this method. The distributor will
uniformly and periodically offer to pay cash payments as incentives to
broker/dealers whose customers or clients purchase shares of the Fund under this
"no-load" purchase provision. This payment will be made out of the distributor's
assets and not by the Corporation, the Fund or its shareholders.

REDUCING THE SALES CHARGE

The sales charge can be reduced on the purchase of shares of the Fund through:

.quantity discounts and accumulated purchases;

.signing a 13-month letter of intent;

.using the reinvestment privilege; or

.concurrent purchases.

QUANTITY DISCOUNTS AND
ACCUMULATED PURCHASES

As shown in the table under "What Shares Cost," larger purchases reduce the
sales charge paid. The Fund will combine purchases made on the same day by the
investor, the investor's spouse, and the investor's children under age 21 when
it calculates the sales charge.

If an additional purchase of shares of the Fund is made, the Fund will consider
the previous purchases still invested in the Fund in calculating the applicable
sales charge rate. For example, if a shareholder already owns shares which were
purchased at the public offering price of $70,000 and then purchases $40,000
more at the current public offering price, the sales charge of the additional
purchase according to the schedule now in effect would be 3.75%, not 4.50%.

To receive the sales charge reduction, M&T Bank's Mutual Fund Services or the
distributor must be notified by the shareholder in writing at the time the
purchase is made that Fund shares are already owned or that purchases are being
combined. The Fund will reduce the sales charge after it confirms the purchase.

LETTER OF INTENT

If a shareholder intends to purchase shares of the Fund equal in value to at
least $100,000 over the next 13 months, the sales charge may be reduced by
signing a letter of intent to that effect. This letter of intent includes a
provision for a sales charge adjustment depending on the amount actually
purchased within the 13-month period and a provision for the Custodian to hold
4.50% of the total amount intended to be purchased in escrow (in shares of the
Fund) until such purchase is completed.

The 4.50% held in escrow will be applied to the shareholder's account at the end
of the 13-month period, unless the amount specified in the letter of intent is
not purchased. In this event, an appropriate number of escrowed shares may be
redeemed in order to realize the difference in the sales charge. This letter of
intent will not obligate the shareholder to purchase shares, but if the
shareholder does, each purchase during the period will be at the sales charge
applicable to the total amount intended to be purchased. This letter may be
dated as of a prior date to include any purchases made within the past 90 days;
however, these previous purchases will not receive the reduced sales charge.

REINVESTMENT PRIVILEGE

If shares in the Fund have been redeemed, the shareholder has a one-time right
to reinvest, within 90 days, the redemption proceeds in the Fund at the
next-determined net asset value without any sales charge. M&T Bank's Mutual Fund
Services or the distributor must be notified by the shareholder in writing or by
the shareholder's financial institution of the reinvestment
in order to eliminate the sales charge. If the shareholder redeems his or her
shares in the Fund, 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 two or more funds in the Vision
Group of Funds, Inc., the purchase price of which includes a sales charge. For
example, if a shareholder concurrently invested $70,000 in one of the funds with
a sales charge, and $40,000 in another fund with a sales charge, the sales
charge would be reduced to 3.75%.

To receive this sales charge reduction, M&T Bank's Mutual Fund Services or the
distributor must be notified by the agent placing the order at the time the
concurrent purchases are made. The sales charge will be reduced after the
purchase is confirmed.

HOW TO BUY SHARES

YOU CAN BUY SHARES OF THE FUND ON ANY BUSINESS DAY,
EXCEPT ON DAYS WHICH THE NEW YORK STOCK EXCHANGE OR
M&T BANK IS CLOSED OR ON HOLIDAYS WHEN WIRE TRANSFERS
ARE RESTRICTED (COLUMBUS DAY, VETERANS' DAY AND
MARTIN LUTHER KING DAY).

Shares may be purchased either by wire, mail or transfer. The Fund reserves the
right to reject any purchase request.

Texas residents must purchase shares through Federated Securities Corp. at
1-800-618-8573.

THROUGH THE BANK

You may purchase shares through M&T Bank. To do so, contact an account
representative at M&T Bank or those affiliates of M&T Bank which make shares
available (such as The East New York Savings Bank ("East New York")), or M&T
Bank's Mutual Fund Services at (800) 836-2211 (in the Buffalo area, phone
842-4488).

THROUGH M&T SECURITIES, INC.

You may purchase shares of the Fund through any representative of M&T
Securities, Inc. ("M&T Securities") at M&T Bank and East New York locations, as
well as at separate M&T Securities locations, or by calling 1-800-724-5445. M&T
Securities (member NASD and SIPC) is a wholly-owned registered broker-dealer
subsidiary of M&T Bank.
THROUGH AUTHORIZED BROKER/DEALERS

An investor may place an order through authorized brokers and dealers to
purchase shares of the Fund. For additional details, contact your broker.

PAYMENT

Payment may be made by either check or federal funds or by debiting a customer's
account at M&T Bank or any of its affiliate banks. Purchase orders must be
received by 4:00 p.m. (Eastern time) in order to be credited that same day. For
settlement of an order to occur, payment must be received on the next business
day following the order.

BUYING SHARES BY WIRE

You can purchase shares of the Fund by Federal Reserve wire. This is referred to
as wiring federal funds, and it simply means that your bank sends money to the
Fund's bank through the Federal Reserve System. To purchase shares by Federal
Reserve wire, call M&T Bank's Mutual Fund Services or any representative of M&T
Securities before 4:00 p.m. (Eastern time) to place your order. The order is
considered immediately received, provided payment by federal funds is received
before 3:00 p.m. (Eastern time) the next business day.

BUYING SHARES BY MAIL

To buy shares of the Fund for the first time by mail, complete and sign an
account application form and mail it, together with a check made payable to
"Vision Capital Appreciation Fund" in an amount of $500 (or $250 for IRA
accounts) or more, to the address below:

Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556
Current shareholders can purchase shares by mail by sending a check to the same
address. Orders by mail are considered received after payment by check has been
converted into federal funds. This is normally the next business day after the
check has been received.

BUYING SHARES BY TRANSFER

To purchase shares of the Fund by transferring money from a bank account, you
must maintain a checking or NOW deposit account at M&T Bank or any of its
affiliate banks. To place an order, call M&T Bank's Mutual Fund Services or any
representative of M&T Securities before 4:00 p.m. (Eastern time). The money will
be transferred from your checking or NOW deposit account to your Fund account by
the next business day and your purchase of shares will be effected on the day
the order is placed.
CUSTOMER AGREEMENTS

Shareholders normally purchase shares through different types of customer
accounts at M&T Bank and its affiliates. You should read this prospectus
together with any agreements between you and the institution to learn about the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.

SYSTEMATIC INVESTMENT PROGRAM

Once you have opened a Fund account, you can add to your investment on a regular
basis in amounts of $25 or more through automatic deductions from your checking
or NOW deposit account. The money may be withdrawn periodically and invested in
Fund shares at the net asset value next calculated after your order is received
plus any applicable sales charge. To sign up for this program, please call M&T
Bank's Mutual Fund Services for an application.

DIVIDENDS AND CAPITAL GAINS
The Fund declares and pays dividends quarterly. Capital gains realized by the
Fund, if any, will be distributed at least once every 12 months. Dividends and
capital gains will be automatically reinvested in additional shares of the Fund
on payment dates at the ex-dividend date's net asset value without a sales
charge, unless payments are requested by writing to the Fund or M&T Bank's
Mutual Fund Services. Dividends and capital gains can also be reinvested in
shares of any other fund comprising the Vision Group of Funds, Inc., subject to
any applicable investment requirements.

RETIREMENT PLANS

Shares of the Fund can be purchased as an investment for IRA accounts. For
further details, contact the Fund and consult a tax adviser.

CERTIFICATES AND CONFIRMATIONS

As transfer agent for the Fund, Federated Shareholder Services Company maintains
a share account for each shareholder. The Fund will not issue certificates for
your shares unless you make a written request to the Fund. Federated Shareholder
Services Company is a subsidiary of Federated Investors.

Detailed confirmations of each purchase or redemption are sent to each
shareholder. Confirmations are sent to shareholders of the Fund to report
dividends paid during the quarter.

HOW TO EXCHANGE SHARES

ALL SHAREHOLDERS IN ANY OF THE FUNDS ARE SHAREHOLDERS
OF VISION GROUP OF FUNDS, INC. AND HAVE ACCESS TO THE
OTHER FUNDS OF THE CORPORATION (REFERRED TO AS "PAR-
TICIPATING FUNDS") THROUGH AN EXCHANGE PROGRAM. YOU
MAY EXCHANGE SHARES OF THE FUND FOR SHARES OF OTHER
PARTICIPATING FUNDS AT NET ASSET VALUE, PLUS ANY
APPLICABLE SALES CHARGE.

When exchanging into and out of Participating Funds with a sales charge and
Participating Funds without a sales charge, shareholders who have paid a sales
charge once upon purchasing shares of any Participating Fund, including those
shares acquired by the reinvestment of dividends, will not have to pay a sales
charge again on an exchange. Shares of Participating Funds with no sales charge
acquired by direct purchase may be exchanged for shares of other Participating
Funds with a sales charge at net asset value plus the applicable sales charge.
However, shares of Participating Funds with no sales charge that were acquired
by the reinvestment of dividends will not be subject to a sales charge upon an
exchange into shares of a Participating Fund with a sales charge. Instead, such
exchanges will be made at net asset value.

To be eligible for this exchange privilege, you must exchange shares with a net
asset value of at least the minimum initial investment required by the
Participating Fund into which you are exchanging if it is a new account. You may
exchange your shares only for shares of Participating Funds that may legally be
sold in your state of residence. Prior to any exchange, the shareholder must
receive a copy of the current prospectus of the Participating Fund into which an
exchange is to be made.

Once the transfer agent has received proper instructions and all necessary
supporting documents, shares submitted for exchange will be redeemed at the next
net asset value calculated. If you do not have an account in the Participating
Fund whose shares you want to acquire, you must establish a new account. Unless
you specify otherwise, this account will be registered in the same name and have
the same dividend and capital gains payment options as you selected with your
existing account. If the new account registration (name, address, and taxpayer
identification number) is not identical to your existing account, you must
provide a signature guarantee to verify your signature. Please see the
"Signature Guarantees" section later in this prospectus for more information
about signature guarantees.

Each exchange is considered a sale of shares of one fund and a purchase of
shares of another fund, and depending on the circumstances, may generate a short
or long-term capital gain or loss for federal income tax purposes.

The Fund reserves the right to modify or terminate the exchange privilege at any
time. Shareholders will be notified prior to any modification or termination.

To find out more about the exchange privilege, call M&T Bank's Mutual Fund
Services at the number listed below.

EXCHANGING SHARES BY TELEPHONE

You may exchange shares between Participating Funds by calling M&T Bank's Mutual
Fund Services at (800) 836-2211 (in the Buffalo area, phone 842-4488). To sign
up for telephone exchanges, you must select the telephone exchange option on the
new account application. It is recommended that you request this privilege on
your initial application. If you do not and later wish to take advantage of
telephone exchanges, you may call M&T Bank's Mutual Fund Services for
authorization forms.

You can only exchange shares by telephone between fund accounts with identical
shareholder registrations (names, addresses, and taxpayer identification
numbers).

Telephone exchange instructions must be received by M&T Bank's Mutual Fund
Services by 4:00 p.m. (Eastern time) and transmitted to Federated Shareholder
Services Company before 4:00 p.m. (Eastern time) for shares to be exchanged that
same day. You will not receive a dividend from the fund into which you are
exchanging on the date of the exchange.

You may have difficulty making exchanges by telephone in times of unusual
economic or market changes when the volume of telephone requests may be
exceptionally high. If you cannot contact M&T Bank's Mutual Fund Services by
telephone, please send a written exchange request by mail for next day delivery
to the Vision Group of Funds, Inc. at the address shown below.

If you have certificates for the shares you want to exchange, you cannot make a
telephone exchange. Instead, the certificates must be properly endorsed and
should be sent by registered or certified mail, along with your written exchange
request, to the Vision Group of Funds, Inc. at the address shown below. M&T
Bank's Mutual Fund Services will then forward the certificate to the transfer
agent, Federated Shareholder Services Company, and the shares will be deposited
into your account before the exchange is made.

Shareholders requesting the telephone exchange service authorize the
Corporation and its agents to act upon their telephonic instructions to
exchange shares from any account for which they have authorized such services.
Exchange instructions given by telephone may be electronically recorded for
your protection. If reasonable procedures are not followed by the Fund, it may
be liable for losses due to unauthorized or fraudulent telephone instructions.

EXCHANGING SHARES BY MAIL

You may exchange shares by mail by sending your written request to:

Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556

HOW TO REDEEM SHARES
THE FUND REDEEMS YOUR SHARES AT THE NET ASSET VALUE
PER SHARE NEXT CALCULATED AFTER THE FUND RECEIVES
YOUR REDEMPTION REQUEST. WHEN FUND SHARES ARE
REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THE
ORIGINAL COST.

You may redeem shares only on days when the Fund computes its net asset value.
You cannot redeem shares on days when the New York Stock Exchange or M&T Bank
are closed, or on holidays when wire transfers are restricted (Columbus Day,
Veterans' Day, and Martin Luther King Day). While you may redeem various amounts
by telephone or written request, you can close your account only by written
request.

TELEPHONE REDEMPTIONS

You may redeem your shares by calling M&T Bank's Mutual Fund Services at (800)
836-2211 (in the Buffalo area, phone 842-4488) before 4:00 p.m. (Eastern time).
The proceeds will be wired the next business day directly to your account at M&T
Bank or an affiliate or to another account you previously designated at a
domestic commercial bank that is a member of the Federal Reserve System. M&T
Bank reserves the right to charge a fee for a wire transfer from a customer
checking account, which may contain redemption proceeds, to another commercial
bank.

You will be automatically eligible for telephone redemptions, unless you check
the box on the new account application form to decline this privilege. It is
recommended that you provide the necessary information for the telephone/ wire
redemption option on your initial application. If you do not do this and later
wish to take advantage of telephone redemptions, you must call M&T Bank's Mutual
Fund Services for authorization forms.

You may have difficulty redeeming shares by telephone in times of unusual
economic or market changes when the volume of telephone requests may be
exceptionally high. If you cannot contact M&T Bank's Mutual Fund Services by
telephone, please send a written redemption request by mail for next day
delivery to the Vision Group of Funds, Inc. at the address shown below.

The Fund reserves the right to modify or terminate the telephone redemption
privilege at any time. Shareholders will be notified prior to any modification
or termination.

If you hold shares in certificate form or hold Fund shares through an IRA
account, you cannot redeem those shares by phone, but instead must redeem them
in writing as explained below.

Shareholders who accept the telephone redemption service authorize the
Corporation and its agents to act upon their telephonic instructions to redeem
shares from any account for which they have authorized such services. Redemption
instructions given by telephone may be electronically recorded for your
protection. If reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.

REDEEMING SHARES BY MAIL

You may redeem shares by sending your written request to:

Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556

Please call M&T Bank's Mutual Fund Services for specific instructions before
redeeming by letter. Your written request must include your name, the Fund's
name, your account number, and the share or dollar amount you want to
redeem. If share certificates have been issued to you, those certificates must
be properly endorsed and should be sent by registered or certified mail along
with your redemption request.

SIGNATURE GUARANTEES

A signature guarantee verifies the authenticity of your signature. For your
protection, you must have your signature guaranteed on written redemption
requests in the following instances:

.if you are redeeming shares worth $50,000 or more;

.if you want a redemption of any amount sent to an address other than your
address on record with the Fund;

.if you want a redemption of any amount payable to someone other than yourself
as the shareholder of record; or

.if you want to transfer the registration of the Fund shares.

The signature guarantee must be provided by:

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

.a savings bank or savings associations whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which also is administered by
the FDIC;

.a member firm of the New York, American, Boston, Midwest, or Pacific Stock
Exchange; 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 its 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 its transfer agent reserve the right
to amend these standards at any time without notice.

RECEIVING PAYMENT

Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request, provided the Fund or its agents have received payment for shares from
the shareholder.

SYSTEMATIC WITHDRAWAL PROGRAM

If you own Fund shares worth $10,000 or more, you can have regular payments of
$50 or more sent from your Fund account to you, another person you designate or
your checking or NOW deposit account. Fund shares are redeemed to provide
periodic payments in the amount you specify.

Depending on the amount you are withdrawing, the amount of dividends or any
capital gains distributions paid on the Fund shares, and any possible
fluctuations in the Fund's net asset value per share, these redemptions may
reduce and eventually exhaust your investment in the Fund. For this reason, you
should not consider systematic withdrawal payments as yield or income received
from your investment in the Fund. Due to the fact that shares are sold subject
to sales charge, it may not be advisable for shareholders to be purchasing
shares while participating in this program.

For more information and an application form for the Systematic Withdrawal
Program, call M&T Bank's Mutual Fund Services.

INVOLUNTARY REDEMPTIONS

Because of the high cost of maintaining accounts with low balances, the Fund may
redeem your shares and send you the proceeds if your account balance falls below
a minimum value of $250 due to shareholder redemptions. Shareholders who make
large or frequent withdrawals may be particularly vulnerable to this involuntary
redemption process. However, before shares are redeemed to close an account, the
shareholder will be notified in writing and given 30 days to purchase additional
shares to meet the minimum balance requirement.

Further, the Fund reserves the right to redeem shares involuntarily or make
payment for redemptions in the form of securities if it appears appropriate to
do so in light of the Fund's responsibilities under the Investment Company Act
of 1940.

TAX INFORMATION

BELOW IS A GENERAL DISCUSSION OF TAX CONSIDERATIONS
FOR THE FUND. NO ATTEMPT HAS BEEN MADE TO PRESENT A
DETAILED EXPLANATION OF THE INCOME TAX TREATMENT OF
THE FUND OR ITS SHAREHOLDERS, AND THIS DISCUSSION IS
NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX
PLANNING.

The tax consequences discussed here apply whether you receive dividends in cash
or reinvest them in additional shares. The Fund will send you tax information
annually regarding the federal income tax consequences of distributions made
during the year. You should definitely consult your own tax adviser about any
state or local taxes that may apply.

The Fund will be treated as a separate entity for federal income tax purposes.
Income earned by the Fund, including any capital gains or losses realized, is
not combined with income earned on the Corporation's other portfolios.

The Fund intends to qualify each year as a regulated investment company under
the Internal Revenue Code so that it is not required to pay federal income taxes
on the income and capital gains distributed to shareholders.

FEDERAL INCOME TAXES

Unless shareholders of the Fund are otherwise exempt from taxes, they are
required to pay federal income taxes on dividends and other distributions
received (including capital gains distributions, if any) from the Fund.

DESCRIPTION OF FUND SHARES

Vision Group of Funds, Inc. was organized as a Maryland corporation on February
23, 1988, and consists of seven available portfolios: Vision Money Market Fund,
Vision Treasury Money Market Fund, Vision New York Tax-Free Money Market Fund,
Vision U.S. Government Securities Fund, Vision Growth and Income Fund, Vision
Capital Appreciation Fund, and Vision New York Tax-Free Fund. The Corporation's
Articles of Incorporation permit the Corporation to offer separate series of
shares in these funds or other future portfolios.

Each Fund share represents an equal proportionate interest in the Fund with
other shares and participates equally in the dividends and any other
distributions that are declared at the discretion of the Corporation's Board of
Directors.

VOTING RIGHTS AND OTHER INFORMATION

SHAREHOLDERS OF THE FUND ARE ENTITLED TO ONE VOTE FOR
EACH FULL SHARE THEY HOLD AND TO FRACTIONAL VOTES FOR
ANY FRACTIONAL SHARES THEY HOLD.
Shareholders in the Fund generally vote in the aggregate and not by class,
unless the law expressly requires otherwise or the Corporation's Board of
Directors determines that the matter to be voted upon affects only the interests
of shareholders of a particular class. (See the "Description of Fund Shares" in
the Statement of Additional Information for examples of when the Investment
Company Act of 1940 requires that shareholders vote by class.)

The Fund is not required to hold annual shareholder meetings, unless matters
arise that require a vote of the shareholders under the Investment Company Act
of 1940. That law requires a vote of the shareholders to approve changes in the
Fund's investment advisory agreements, to replace the Fund's independent
certified public accountants and, under certain circumstances, to elect members
to the Board of Directors. Directors may be removed by the Board of Directors or
by a vote of shareholders at a special meeting. The Board of Directors will
promptly call a special meeting of shareholders upon the written request of
shareholders owning at least 10% of any Fund's outstanding shares.

As used in this prospectus, "assets belonging to the Fund" means the money
received by the Corporation upon the issuance or sale of shares in the Fund,
together with all income, earnings, profits, and proceeds derived from the
investment of that money. This includes any proceeds from the sale, exchange,
or liquidation of these investments, any funds or payments derived from the
reinvestment of these proceeds, and a portion of the general assets of the
Corporation that do not otherwise belong to the Fund.

Assets belonging to the Fund are charged with the direct expenses and
liabilities of the Fund and with a share of the general expenses and liabilities
of the Corporation. The general expenses and liabilities of the Corporation are
allocated in proportion to the relative asset values of all the Corporation's
portfolios at the time the expense or liability is incurred.

The management of the Corporation determines the Fund's direct and allocable
liabilities at the time the expense or liability is incurred as well as the
Fund's allocable share of any general assets at the time the asset is acquired.
These determinations are reviewed and approved annually by the Corporation's
Board of Directors and are conclusive.

HOW THE FUND SHOWS
PERFORMANCE

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. The Fund may advertise its performance in
terms of yield and total return, as defined below. Of course, yield and total
return figures are based on past results and are not an indication of future
performance.

YIELD

The yield of the Fund is determined by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the maximum offering price per share of the Fund on
the last day of the period. This number is then annualized using semi-annual
compounding. This means that the amount of income generated during the
thirty-day period is assumed to be generated each month over a 12-month period
and is reinvested every six months. The yield does not necessarily reflect
income actually earned by the Fund because of certain adjustments required by
the Securities and Exchange Commission and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.

TOTAL RETURN

The average annual total return of the Fund is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the maximum offering price per share at the end of the period. The number of
shares owned at the end of the period is based on the number of shares purchased
at the beginning of the period with $1,000, less any applicable sales charge,
adjusted over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.

ADDRESSES

Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556
(800) 836-2211 (716) 842-4488

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

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

INVESTMENT ADVISER
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14240

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 1119
Boston, Massachusetts 02103
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

INDEPENDENT AUDITORS
Ernst & Young LLP
One Oxford Centre
Pittsburgh, Pennsylvania 15219

Vision
Capital Appreciation
Fund

---------------------------------------------

Prospectus dated
June 5, 1996
<TABLE>
<S> <C> <C>
FEDERATED SECURITIES CORP. MANUFACTURERS AND TRADERS
--------------------------------------------- TRUST COMPANY
Distributor ----------------------------------------------------
A subsidiary of FEDERATED INVESTORS Investment Adviser
FEDERATED INVESTORS TOWER A subsidiary of First Empire State Corporation
PITTSBURGH, PA 15222-3779 TRG01627-01 (6/96)
G01627-01 (6/96)
</TABLE>

VISION CAPITAL APPRECIATION FUND
(A Portfolio of Vision Group of Funds, Inc.)

SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 5, 1996

A. Please insert the following as the last sentence of the paragraph under the
section entitled `Portfolio Turnover'' on page 6.

``or the period from July 3, 1996 (date of initial public investment)
to October 31, 1996, the portfolio turnover rate of the Fund was 8%.''

B. Please insert the following as the second paragraph in the section
entitled ``und Ownership'' on page 10.

``s of December 4, 1996, the following shareholder of record owned 5%
or more of the outstanding shares of the Fund: Reho & Co.
Buffalo, New York, owned approximately 1,103,914 shares (75.25%).''

C. Please insert the following as the second paragraph in the section
entitled ``dvisory Fees'' on page 11.

"`For the period from July 3, 1996, (date of initial public investment) to
October 31, 1996, Bank earned advisory fees of $33,799, all of which was
waived.

MANUFACTURES AND TRADERS
TRUST COMPANY
D. Please insert the following as the second sentence in the section
entitled ``Administrative Investment Adviser Services'' on page 11.
A subsidiary of First Empire
`For the period from July 3, 1996, (date of initial public investment) to
October 31, 1996,
State Corporation
Fund incurred $16,576 in administrative services, all of which was
reimbursed by the Adviser.''

E. Please insert the following as the final paragraph in the section
entitled ``Brokerage Transactions'' on page 12.

``For the period from July 3, 1996, (date of initial public investment) to
October 31, 1996, Fund paid brokerage commissions in the amount of $13,040.

Cusip 92830F703
G00996-01 (12/96)

F. Please insert the following as the first paragraph in the section
entitled `Total Return'' on page 14.

`The Fund's cumulative total return from July 3, 1996, (date of initial
public investment) to October 31, 1996, was 3.18%.
Cumulative total return reflects the Fund's total performance over a specific
period of time. This total return assumes and is reduced
by the payment of the maximum sales charge. The Fund's total return is
representative of only four months of investment activity since
the Fund's effective date.''

October 31, 1996

VISION CAPITAL APPRECIATION FUND
(A PORTFOLIO OF VISION GROUP OF FUNDS, INC.)
STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information relates to the prospectus of
one portfolio of the Vision Group of Funds, Inc., referred to as the
Vision Capital Appreciation Fund (the ``Fund') dated June 5, 1996.

This Statement of Additional Information is not a prospectus itself,
but should be read in conjunction with the Fund's current prospectus
dated June 5, 1996. This Statement of Additional Information is
incorporated into the Fund's prospectus by reference. To receive a copy
of the prospectus, or a paper copy of this Statement of Additional
Information, if you have received it electronically, write to Vision
Group of Funds, Inc., P.O. Box 4556, Buffalo, NY 14240-4556, or call
(800) 836-2211 or (716) 842-4488. Please retain this Statement of
Additional Information for future reference.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779

Statement of Additional Information dated June 5, 1996

MANUFACTURERS AND TRADERS
TRUST COMPANY
Investment Adviser
A subsidiary of First Empire State Corporation
Federated Securities Corp. is distributor of the Fund.

GENERAL INFORMATION ABOUT THE FUND 1

INVESTMENT OBJECTIVE 1

INVESTMENT POLICIES 1

ACCEPTABLE INVESTMENTS 1

Corporate Debt Obligations 1
U.S. Government Securities 1
Money Market Instruments 2
Securities of Foreign Issuers 2
Repurchase Agreements 2
When-Issued and Delayed Delivery
Transactions 2
Illiquid and Restricted Securities 2
Lending of Portfolio Securities 3
Reverse Repurchase Agreements 3
Futures and Options Transactions 3
Warrants 6
Portfolio Turnover 6
INVESTMENT LIMITATIONS 7

VISION GROUP OF FUNDS, INC. MANAGEMENT 9

Fund Ownership 10
Directors' Compensation 10
Director Liability 10
INVESTMENT ADVISORY SERVICES 11

Adviser to the Fund 11
Advisory Fees 11
OTHER SERVICES 11

BROKERAGE TRANSACTIONS 12

DESCRIPTION OF FUND SHARES 12

HOW TO BUY SHARES 13

HOW THE FUND VALUES ITS SHARES 13

HOW TO REDEEM SHARES 13

Redemption in Kind 13
DETERMINING NET ASSET VALUE 13

TAX STATUS 14

The Fund's Tax Status 14
Shareholders' Tax Status 14
TOTAL RETURN 14

YIELD 14
PERFORMANCE COMPARISONS 14

APPENDIX 17

GENERAL INFORMATION ABOUT THE FUND

The Fund is a portfolio in the Vision Group of Funds, Inc. (the
`Corporation''). The Corporation was established as a Maryland Corporation
under Articles of Incorporation dated February 23, 1988.
INVESTMENT OBJECTIVE

The investment objective of the Vision Fund (the `Fund'') is to provide
long-term capital appreciation. The investment objective of the Fund cannot
be changed without approval of its shareholders.
INVESTMENT POLICIES

The prospectus discusses the Fund's investment policies. Supplemental
information is set out below concerning the types of securities and other
instruments in which the Fund may invest, the investment policies and
strategies that the Fund may utilize, and certain risks attendant to those
investments, policies and strategies.
ACCEPTABLE INVESTMENTS

CORPORATE DEBT OBLIGATIONS
The Fund may invest in corporate debt obligations. Corporate debt
obligations may bear fixed, fixed and contingent, or variable rates of
interest. They may involve equity features such as conversion or exchange
rights, warrants for the acquisition of common stock of the same or a
different issuer, participations based on revenues, sales, or profits, or
the purchase of common stock in a unit transaction (where corporate debt
securities and common stock are offered as a unit).
Increasing rate securities, which currently do not make up a significant
share of the market in corporate debt obligations, are generally offered at
an initial interest rate which is at or above prevailing market rates.
Interest rates are reset periodically (most commonly every 90 days) at
different levels on a predetermined scale. These levels of interest are
ordinarily set at progressively higher increments over time. Some
increasing rate securities may, by agreement, revert to a fixed rate
status. These securities may also contain features which allow the issuer
the option to convert the increasing rate of interest to a fixed rate under
such terms, conditions, and limitations as are described in each issuer's
prospectus.
U.S. GOVERNMENT SECURITIES
The types of U.S. government securities in which the Fund may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are backed
by:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
othe credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are:
oFarm Credit Banks;
oThe Student Loan Marketing Association;
oFederal Home Loan Banks;
oFederal Home Loan Mortgage Corporation; and
oFederal National Mortgage Association.

MONEY MARKET INSTRUMENTS
The Fund may invest in money market instruments such as:
oinstruments of domestic and foreign banks and savings and loans if
they have capital, surplus, and undivided profits of over
$100,000,000, or if the principal amount of the instrument is
federally insured;
ocommercial paper rated, at the time of purchase, not less than A-1
by Standard & Poor's Ratings Group (``S&P''), Prime-1 by Moody's
Investors Services, Inc. (``Moody's''), or F-1 by Fitch Investors
Service, Inc. (``Fitch''), or if not rated are determined to be of
comparable quality by the Fund's Adviser (see Appendix for a
description of the basis of those ratings);
otime and savings deposits (including certificates of deposit) in
commercial or savings banks whose accounts are insured by the Bank
Insurance Fund (``BIF''), or institutions whose accounts are insured
by the Savings Association Insurance Fund (``SAIF''), including
certificates of deposit issued by, and other time deposits in,
foreign branches of BIF-insured banks which, if negotiable, mature
in six months or less or if not negotiable, either mature in ninety
days or less, or are withdrawable upon notice not exceeding ninety
days; and
obankers' acceptances.
SECURITIES OF FOREIGN ISSUERS
The Fund may invest in securities of foreign issuers. Securities of foreign
issuers may include debt obligations of supranational entities, which
include international organizations designed or supported by governmental
entities to promote economic reconstruction or development, and
international banking institutions and related government agencies.
Examples of these include, but are not limited to, the International Bank
for Reconstruction and Development (World Bank), European Investment Bank
and InterAmerican Development Bank.
Securities of a foreign issuer may present greater risks than investments
in U.S. securities, including higher transaction costs as well as the
imposition of additional taxes by foreign government. In addition,
investments in foreign issuers may include additional risks associated with
less complete financial information about the issuers, less market
liquidity, and political instability. Future political and economic
developments, the possible imposition of withholding taxes on interest
income, the possible seizure or nationalization of foreign holdings, the
possible establishment of exchange controls, or the adopt of other
governmental restrictions, might adversely affect the payment of principal
and interest on securities of foreign issuers. As a matter of practice, the
Fund will not invest in the securities of a foreign issuer if any risk
appears to the Adviser to be substantial.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/ dealers, and other recognized
financial institutions sell U.S. government securities or certificates of
deposit to the Fund and agree at the time of sale to repurchase them at a
mutually agreed upon time and price within one year from the date of
acquisition. 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
Fund believes 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 may
only enter into repurchase agreements with banks and other recognized
financial institutions such as broker/dealers which are found by the
Adviser to be creditworthy pursuant to guidelines established by the Board
of Directors.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses, other
than normal transaction costs, are incurred. However, liquid assets of the
Fund sufficient to make payment for the securities to be purchased are
segregated on the Fund's records at the trade date. These assets are marked
to market daily and are maintained until the transaction has been settled.
The Fund does not intend to engage in when-issued and delayed delivery
transactions to an extent that would cause the segregation of more than 20%
of the total value of its assets.
ILLIQUID AND RESTRICTED SECURITIES
The Fund may invest in illiquid and restricted securities. The ability of
the Board of Directors to determine the liquidity of certain restricted
securities is permitted under a Securities and Exchange Commission staff
position set forth in the adopting release for Rule 144A under the
Securities Act of 1933 (the `Rule''). The Rule is a non-exclusive, safe-
harbor for certain secondary market transactions involving securities
subject to restrictions on resale under federal securities laws. The Rule
provides an exemption from registration for resales of otherwise restricted
securities to qualified institutional buyers. The Rule was expected to
further enhance the liquidity of the secondary market for securities
eligible for resale under the Rule. The Fund believes that the staff of the
Securities and Exchange Commission has left the question of determining the
liquidity of all restricted securities (eligible for resale under the Rule)
to the Corporation's Board.
Under the criteria currently established by the Directors, the Adviser must
consider the following factors in determining the liquidity of restricted
securities: (i) the frequency of trades and quotes for the security; (ii)
the volatility of quotations and trade prices for the security; (iii) the
number of dealers willing to purchase or sell the security and the number
of potential purchasers; (iv) dealer undertakings to make a market in the
security; (v) the nature of the security and the nature of the marketplace
trades; (vi) the rating of the security and the financial condition and
prospects of the issuer of the security; and (vii) such other factors as
may be relevant to a Fund's ability to dispose of the security.
The Fund may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law, and is generally sold to institutional investors, such as
the Fund, who agree that they are purchasing the paper for investment
purposes and not with a view to public distribution. Any resale by the
purchaser must be in an exempt transaction. Section 4(2) commercial paper
is normally resold to other institutional investors like the Fund through
or with the assistance of the issuer or investment dealers who make a
market in Section 4(2) commercial paper, thus providing liquidity. The Fund
believes that Section 4(2) commercial paper and possibly certain other
restricted securities which meet the criteria for liquidity established by
the Directors are quite liquid. The Fund intends, therefore, to treat the
restricted securities which meet the criteria for liquidity established by
the Directors, including Section 4(2) commercial paper, as determined by
the Adviser, as liquid and not subject to the investment limitation
applicable to illiquid securities. In addition, because Section 4(2)
commercial paper is liquid, the Fund intends to not subject such paper to
the limitation applicable to restricted securities.
LENDING OF PORTFOLIO SECURITIES
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.
During the time portfolio securities are on loan, the borrower pays the
Fund any interest paid on such securities. Loans are subject to termination
at the option of the Fund or the borrower. The Fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Fund does not have the
right to vote securities on loan, but would terminate the loan and regain
the right to vote if that were considered important with respect to the
investment.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. This
transaction is similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in
return for a percentage of the instrument's market value in cash, and
agrees that on a stipulated date in the future the Fund will repurchase the
portfolio instrument by remitting the original consideration plus interest
at an agreed upon rate. The use of reverse repurchase agreements may enable
the Fund to avoid selling portfolio instruments at a time when a sale may
be deemed to be disadvantageous, but the ability to enter into reverse
repurchase agreements does not ensure that the Fund will be able to avoid
selling portfolio instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund, in
a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the transaction
is settled.
FUTURES AND OPTIONS TRANSACTIONS
As a means of reducing fluctuations in the net asset value of shares of the
Fund, the Fund may attempt to hedge all or a portion of its portfolio by
buying and selling futures contracts, buying put options on portfolio
securities and listed put options on futures contracts, and writing call
options on futures contracts. The Fund may also write covered call options
on portfolio securities to attempt to increase current income.
The Fund will maintain its position in securities, options and segregated
cash subject to puts and calls until the options are exercised, closed, or
have expired. An option position of futures transactions may be closed out
over-the-counter or on a nationally recognized exchange which provides a
secondary market for options of the same series. The Fund currently does
not intend to invest more than 5% of its total assets in options
transactions.
FUTURES CONTRACTS
The Fund may purchase and sell financial futures contracts to hedge
against the effects of changes in the value of portfolio securities
due to anticipated changes in interest rates and market conditions
without necessarily buying or selling the securities. The Fund also
may purchase and sell stock index futures to hedge against changes in
prices. The Fund will not engage in futures transactions for
speculative purposes. A futures contract is a firm commitment by two
parties: the seller who agrees to make delivery of the specific type
of security called for in the contract (`going short'') and the buyer
who agrees to take delivery of the security (`going long'') at a
certain time in the future.
For example, in the fixed income securities market, prices move
inversely to interest rates. A rise in rates means a drop in price.
Conversely, a drop in rates means a rise in price. In order to hedge
its holdings of fixed income securities against a rise in market
interest rates, the Fund could enter into contracts to deliver
securities at a predetermined price (i.e., `go short'') to protect
itself against the possibility that the prices of its fixed income
securities may decline during the Fund's anticipated holding period.
The Fund would `go long'' (i.e., agree to purchase securities in the
future at a predetermined price) to hedge against a decline in market
interest rates.
Stock index futures contracts are based on indices that reflect the
market value of common stock of the issuers included in the indices.
An index futures contract is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to
the differences between the value of the index at the close of the
last trading day of the contract and the price at which the index
contract was originally written.
``MARGIN''IN FUTURES TRANSACTIONS
Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract. Rather,
the Fund is required to deposit an amount of `initial margin'' in
cash or U.S. Treasury bills with its custodian (or the broker, if
legally permitted). The nature of initial margin in futures
transactions is different from that of margin in securities
transactions in that futures contract initial margin does not involve
the borrowing of funds by the Fund to finance the transactions.
Initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination
of the futures contract, assuming all contractual obligations have
been satisfied.
A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the
Fund pays or receives cash, called `variation margin,'' equal to the
daily change in value of the futures contract. This process is known
as `marking to market.'' Variation margin does not represent a
borrowing or loan by the Fund but is instead settlement between the
Fund and the broker of the amount one would owe the other if the
futures contract expired. In computing its daily net asset value, the
Fund will mark-to-market its open futures positions. The Fund is also
required to deposit and maintain margin when it writes call options on
futures contracts.
The Fund will comply with the following restrictions when purchasing
and selling futures contracts. First, the Fund will not participate in
futures transactions if the sum of its initial margin deposits on open
contracts and options on premiums will exceed 5% of the market value
of the Fund's net assets, after taking into account the unrealized
profits and losses on those contracts it has entered into. Second, the
Fund will not enter into these contracts for speculative purposes.
Third, since the Fund does not constitute a commodity pool, it will
not market itself as such, nor serve as a vehicle for trading in the
commodities futures or commodity options markets. Connected with this,
the Fund will disclose to all prospective investors the limitations on
its futures and options transactions, and make clear that these
transactions are entered into only for bona fide hedging purposes, or
other permissible purposes pursuant to regulations promulgated by the
Commodity Futures Trading Commission (`CFTC''). Finally, because the
Fund will submit to the CFTC special calls for information, the Fund
will not register as a commodities pool operator.
PUT OPTIONS ON FINANCIAL AND STOCK INDEX FUTURES CONTRACTS
The Fund may purchase listed put options on financial and stock index
futures contracts. The Fund would purchase put options on futures
contracts to protect portfolio securities against decreases in value
resulting from an anticipated increase in market interest rates or
changes in stock prices. Unlike entering directly into a futures
contract, which requires the purchaser to buy a financial instrument
on a set date at a specified price, the purchase of a put option on a
futures contract entitles (but does not obligate) its purchaser to
decide on or before a future date whether to assume a short position
at the specified price.
Generally, if the hedged portfolio securities decrease in value during
the term of an option, the related futures contracts will also
decrease in value and the option will increase in value. In such an
event, the Fund will normally close out its option by selling an
identical option. If the hedge is successful, the proceeds received by
the Fund upon the sale of the second option will be large enough to
offset both the premium paid by the Fund for the original option plus
the decrease in value of the hedged securities.
Alternatively, the Fund may exercise its put option to close out the
position. To do so, it would simultaneously enter into a futures
contract of the type underlying the option (for a price less than the
strike price of the option) and exercise the option. The Fund would
then deliver the futures contract in return for payment of the strike
price. If the Fund neither closes out nor exercises an option, the
option will expire on the date provided in the option contract, and
the premium paid for the contract will be lost.
CALL OPTIONS ON FINANCIAL AND STOCK INDEX FUTURES CONTRACTS
In addition to purchasing put options on futures, the Fund may write
listed call options on financial and stock index futures contracts to
hedge its portfolio against an increase in market interest rates or
changes in stock market conditions. When the Fund writes a call option
on a futures contract, it is undertaking the obligation of assuming a
short futures position (selling a futures contract) at the fixed
strike price at any time during the life of the option if the option
is exercised. As market interest rates rise or market conditions
change, causing the prices of futures to go down, the Fund's
obligation under a call option on a future (to sell a futures
contract) costs less to fulfill, causing the value of the Fund's call
option position to increase.
In other words, as the underlying futures price goes down below the
strike price, the buyer of the option has no reason to exercise the
call, so that the Fund keeps the premium received for the option. This
premium can offset the drop in value of the Fund's fixed income
portfolio which is occurring as interest rates rise.
Prior to the expiration of a call written by the Fund, or exercise of
it by the buyer, the Fund may close out the option by buying an
identical option. If the hedge is successful, the cost of the second
option will be less than the premium received by the Fund for the
initial option. The net premium income of the Fund will then offset
the decrease in value of the hedged securities.
The Fund will not maintain open positions in futures contracts it has
sold or call options it has written on futures contracts if, in the
aggregate, the value of the open positions (marked to market) exceeds
the current market value of its securities portfolio plus or minus the
unrealized gain or loss on those open positions, adjusted for the
correlation of volatility between the hedged securities and the
futures contracts. If this limitation is exceeded at any time, the
Fund will take prompt action to close out a sufficient number of open
contracts to bring its open futures and options positions within this
limitation.
PURCHASING PUT OPTIONS ON PORTFOLIO SECURITIES
The Fund may purchase put options on portfolio securities to protect
against price movements in particular securities in their portfolios.
A put option gives the Fund, in return for a premium, the right to
sell the underlying security to the writer (seller) at a specified
price during the term of the option. The Fund may purchase these put
options as long as the underlying stocks are held in its portfolio.
WRITING COVERED CALL OPTIONS ON PORTFOLIO SECURITIES
The Fund may also write covered call options on securities either held
in its portfolio or which it has the right to obtain without payment
of further consideration or for which it has segregated cash in the
amount of any additional consideration. As the writer of a call
option, the Fund has the obligation upon exercise of the option during
the option period to deliver the underlying security upon payment of
the exercise price. Covered call options generally do not present
investment risks different from those associated with a security
purchase. For example, a security may be sold before it reaches its
maximum potential value, or it may be retained even though its current
market price has dropped below its purchase price. Similarly, a
covered call option presents these risks. For example, when the option
purchaser acquires the security at the predetermined exercise price,
the Fund could be giving up any capital appreciation above the
exercise price that is not offset by the option premium paid by the
option purchaser to the Fund. Conversely, if the underlying security
decreases in price and the option purchaser decides not to carry out
the transaction, the Fund keeps the premium and the Fund can sell the
security or hold onto it for future price appreciation. The Fund may
only sell call options either on securities held in its portfolio or
on securities which it has the right to obtain without payment of
further consideration or for which it has segregated cash in the
amount of any additional consideration. Writing of call options by the
Fund is intended to generate income for the Fund and thereby protect
against price movements in particular securities in the Fund's
portfolio.
OVER-THE-COUNTER OPTIONS
The Fund may purchase and write over-the-counter options on portfolio
securities in negotiated transactions with the buyer or writers of the
options for those options on portfolio securities held by the Funds
and not traded on an exchange.
STOCK INDEX OPTIONS
The Fund may purchase put options on stock indices listed on national
securities exchanges or traded in the over-the-counter market. A stock
index fluctuates with changes in the market values of the stock
included in the index.
The effectiveness of purchasing stock index options will depend upon
the extent to which price movements in the Fund's portfolio correlate
with price movements of the stock index selected. Because the value of
an index option depends upon movements in the level of the index
rather than the price of a particular stock, whether the Fund will
realize a gain or loss from the purchase of options on an index
depends upon movements in the level of stock prices in the stock
market generally or, in the case of certain indices, in an industry or
market segment, rather than movements in the price of a particular
stock. Accordingly, successful use by the Fund of options on stock
indices will be subject to the ability of the Adviser to predict
correctly movements in the direction of the stock market generally or
of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual stocks.
RISKS
When the Fund uses futures and options on futures as hedging devices,
there is a risk that the prices of the securities subject to the
futures contracts may not correlate with the prices of the securities
in the Fund's portfolio. This may cause the futures contract and any
related options to react differently than the portfolio securities to
market changes. In addition, the Adviser could be incorrect in its
expectations about the direction or extent of market factors such as
stock price movements. In these events, the Fund may lose money on the
futures contract or option.

It is not certain that a secondary market for positions in futures
contracts or for options will exist at all times. Although the Adviser
will consider liquidity before entering into these transactions, there
is no assurance that a liquid secondary market on an exchange or
otherwise will exist for any particular futures contract or option at
any particular time. The Fund's ability to establish and close out
futures and options positions depends on this secondary market. The
inability to close out these positions could have an adverse effect on
the Fund's ability to effectively hedge its portfolio.

To minimize risks, the Fund may not purchase or sell futures contracts
or related options if immediately thereafter the sum the amount of
margin deposits on the Fund's existing futures positions and premiums
paid for related options would exceed 5% of the market value of the
Fund's net assets. When the Fund purchases futures contracts, an
amount of cash and cash equivalents, equal to the underlying commodity
value of the futures contracts (less any related margin deposits),
will be deposited in a segregated account with the Fund's custodian
(or the broker, if legally permitted) to collateralize the position
and thereby insure that the use of such futures contract is
unleveraged. When the Fund sells futures contracts, it will either own
or have the right to receive the underlying future or security, or
will make deposits to collateralize the position as discussed above.
WARRANTS
The Fund may invest in warrants. Warrants are basically options to purchase
common stock at a specific price (usually at a premium above the market
value of the optioned common stock at issuance) valid for a specific period
of time. Warrants may have a life ranging from less than a year to twenty
years or may be perpetual. However, most warrants have expiration dates
after which they are worthless. In addition, if the market price of the
common stock does not exceed the warrant's exercise price during the life
of the warrant, the warrant will expire as worthless. Warrants have no
voting rights, pay no dividends, and have no rights with respect to the
assets of the corporation issuing them. The percentage increase or decrease
in the market price of the warrant may tend to be greater than the
percentage increase or decrease in the market price of the optioned common
stock.
PORTFOLIO TURNOVER
The Fund will not attempt to set or meet a portfolio turnover rate since
any turnover would be incidental to transactions undertaken in an attempt
to achieve its investment objective. The Adviser does not anticipate that
the Fund's annual portfolio rate will exceed 100% under normal market
conditions. Securities in its portfolio will be sold whenever he Adviser
believes it is appropriate to do so in light of the Fund's investment
objectives, without regard to the length of time a particular security may
have been held.
INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN
The Fund may sell securities short, but will not purchase any
securities on margin, other than in connection with buying futures
contracts and put options, and writing covered call options, but may
obtain such short-term credits as are necessary for clearance of
purchases and sales of securities.
The deposit or payment by the Fund of initial or variation margin in
connection with futures contracts or related options transactions is
not considered the purchase of a security on margin.
The Fund may purchase and dispose of U.S. government securities before
they are issued and may also purchase and dispose of them on a delayed
delivery basis.

ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up
to one-third of the value of its net assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings (including reverse repurchase agreements)
in excess of 5% of its total assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, the Fund may mortgage,
pledge, or hypothecate assets having a market value not exceeding the
lesser of the dollar amounts borrowed or 15% of the value of its total
assets at the time of the borrowing. For purposes of this limitation,
the following are not deemed to be pledges: margin deposits for the
purchase and sale of futures contracts and related options and
segregation or collateral arrangements made in connection with
options, futures, options on futures, reverse repurchase agreements,
lending of portfolio securities, or the purchase of securities on a
when-issued basis.
UNDERWRITING
The Fund will not underwrite any issue of securities except as they
may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate including limited
partnership interests although it may invest in securities of
companies whose business involves the purchase or sale of real estate
or in securities which are secured by real estate or interests in real
estate.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except portfolio securities,
the market value of which does not exceed one-third of the value of
the Fund's total assets. This shall not prevent the Fund from
purchasing or holding U.S. government obligations, money market
instruments, variable rate demand notes, bonds, debentures, notes,
certificates of indebtedness, or other debt securities, entering into
repurchase agreements, or engaging in other transactions where
permitted by the Fund's investment objective, policies, and
limitations.
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts except that the Fund may purchase and
sell futures contracts and related options.
CONCENTRATION OF INVESTMENTS
The Fund will not invest 25% or more of the value of its total assets
in any one industry, except that the Fund may invest 25% or more of
the value of its total assets in cash or cash items (including
instruments issued by a U.S. branch of a domestic bank or savings and
loan association and bankers' acceptances), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities,
and repurchase agreements collateralized by such securities.
DIVERSIFICATION OF INVESTMENTS
With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities issued by any one issuer
(other than cash, cash items or securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities
and repurchase agreements collateralized by such securities) if as a
result more than 5% of the value of its total assets would be invested
in the securities of that issuer. The Fund will not acquire more than
10% of the outstanding voting securities of any one issuer.
The above investment limitations are fundamental policies of the Fund and
cannot be changed without shareholder approval. The following limitations,
however, may be changed by the Directors without shareholder approval.
Shareholders will be notified before any material change in these
limitations becomes effective.

INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND
DIRECTORS OF THE CORPORATION
The Fund will not purchase or retain the securities of any issuer if
the Officers and Directors of the Corporation or the Fund's Adviser,
owning individually more than 1/2 of 1% of the issuer's securities,
together own more than 5% of the issuer's securities.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in illiquid
securities, including repurchase agreements providing for settlement
in more than seven days after notice, over-the-counter options,
certain restricted securities not determined by the Directors to be
liquid, and non-negotiable time deposits with maturities over seven
days.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets
in securities where the principal and interest are the responsibility
of companies (or guarantors, where applicable) with less than three
years of continuous operations, including the operation of any
predecessor.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although they may
purchase the securities of issuers which invest in or sponsor such
programs.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
In order to comply with the investment restrictions imposed by certain
states, the Fund will limit investments in the securities of other
investment companies to those with sales s not exceeding 1.00% of the
offering price of such securities. The Fund may amend this investment
policy without notice to shareholders in the event that the state
restriction on this type of investment is amended.
PURCHASING SECURITIES TO EXERCISE CONTROL
The Fund will not purchase securities of a company for purposes of
exercising control or management.
INVESTING IN PUT OPTIONS
The Fund will not purchase put options on securities, other than put
options on stock indices, unless the underlying securities are held in
the Fund's portfolio and not more than 5% of the value of the Fund's
total assets would be invested in premiums on open put options.
WRITING COVERED CALL OPTIONS
The Fund will not write call options on securities unless the
underlying securities are held in a Fund's portfolio, or unless the
Fund is entitled to them in deliverable form without further payment
or after segregating cash in the amount of any further payment.
INVESTING IN WARRANTS
The Fund will not invest more than 5% of its assets in warrants,
including those acquired in units or attached to other securities. To
comply with certain state restrictions, the Fund will limit its
investment in such warrants not listed on nationally recognized stock
exchanges to 2% of its total assets. (If state restrictions change,
this latter restriction may be revised without notice to
shareholders.) For purposes of this investment restriction, warrants
acquired by the Fund in units or attached to securities may be deemed
to be without value.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not
result in a violation of such restriction. The Fund has no present
intent to borrow money in excess of 5% of the value of its net assets
during the coming fiscal year. In order to permit the sale of the
Fund's shares in certain states, the Fund may make commitments more
restrictive than the investment limitations described above. To comply
with registration requirements in certain states, the Fund (1) will
limit short sales of securities of any class of any one issuer to 20%
of the Fund's net assets, and (2) will make short sales only on
securities listed on recognized stock exchanges. The latter
restrictions, however, do not apply to short sales of securities the
Fund holds or has a right to acquire without the payment of further
consideration. (If state requirements change, these restrictions may
be revised without shareholder notification.)
For purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment to be
`cash items.''
VISION GROUP OF FUNDS, INC. MANAGEMENT

Officers and Directors are listed with their addresses, present positions
with Vision Group of Funds, Inc., and principal occupations.

Randall I. Benderson
570 Delaware Avenue
Buffalo, NY
Birthdate: January 12, 1955
Director
Senior Vice President and Chief Operating Officer, Benderson Development
Company, Inc.

Joseph J. Castiglia
Roycroft Campus
21 South Grove Street, Suite 291
East Aurora, NY 14052
Birthdate: July 20, 1934
Director
Director, New York State Electric & Gas Corp.; Secewsow Environmental
Services, Inc.; Blue Cross & Blue Shield of Western New York; Buffalo
Branch, Federal Reserve Bank of New York; and President, Chief Executive
Officer and Vice Chairman, Pratt & Lambert United, Inc.

Daniel R. Gernatt, Jr.
Richardson & Taylor Hollow Roads
Collins, NY
Birthdate: July 14, 1940
Director
President and CFO of Gernatt Asphalt Products, Inc.; Executive Vice
President, Dan Gernatt Gravel Products, Inc.; Vice President, Countryside
Sand & Gravel, Inc.

George K. Hambleton, Jr.
670 Young Street
Tonawanda, NY
Birthdate: February 8, 1933
Director
President, Brand Name Sales, Inc.; President, Hambleton & Carr, Inc.

Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President and Treasurer
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp., and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company; Trustee or Director of
other funds distributed by Federated Securities Corp.; President, Executive
Vice President and Treasurer of other funds distributed by Federated
Securities Corp.

Charles L. Davis, Jr.
Federated Investors Tower
Pittsburgh, PA
Birthdate: March 23, 1960
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services; Vice President and
Assistant Treasurer of other funds distributed by Federated Securities
Corp.

Victor R. Siclari
Federated Investors Tower
Pittsburgh, PA
Birthdate:
Secretary
Corporate Counsel, Federated Services Company; formerly Attorney, Morrison
& Foerster (law firm).

FUND OWNERSHIP
Officers and Directors own less than 1% of the Fund's outstanding shares.

DIRECTORS' COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM
CORPORATION CORPORATION*#

RANDALL I. BENDERSON,
DIRECTOR $10,473.50

JOSEPH J. CASTIGLIA,
DIRECTOR $9,973.50

DANIEL R. GERNATT, JR.,
DIRECTOR $10,473.50

GEORGE K. HAMBLETON, JR.,
DIRECTOR $10,473.50

*Information is furnished for the fiscal year ended April 30, 1996. The
Corporation is the only investment company in the Fund Complex.
#The aggregate compensation is provided for the Corporation which is
comprised of seven portfolios.
DIRECTOR LIABILITY
With respect to the removal of a Director of the Corporation, the
Corporation's By-Laws provide, in accordance with applicable law, that a
Director may be removed from the Board at a meeting of shareholders called
for that purpose upon the majority vote of the shareholders of the
Corporation entitled to vote at such meeting. Such a meeting shall be
called by the President or the Board of Directors or at the request in
writing of shareholders entitled to cast at least ten percent (10%) of the
votes entitled to be cast at such meeting. Such shareholders' request shall
state the purpose of the proposed meeting, and the Corporation shall inform
those shareholders of the reasonably estimated cost of preparing and
mailing a notice of the meeting to the other shareholders and, on payment
of these costs, shall notify each shareholder entitled to notice of the
meeting.
INVESTMENT ADVISORY SERVICES

ADVISER TO THE FUND
Investment advisory services are provided to the Fund by Manufacturers and
Traders Trust Company (`M&T Bank''). The advisory services provided and
the expenses assumed by M&T Bank, as well as the advisory fees payable to
it, are described in the Fund's prospectus.
The investment advisory agreement provides that M&T Bank shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with its performance under the advisory
agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of M&T
Bank in the performance of its duties, or from reckless disregard by it of
its duties and obligations thereunder. Because of internal controls
maintained by M&T Bank to restrict the flow of non-public information, Fund
investments are typically made without any knowledge of M&T Bank's or its
affiliates' lending relationships with an issuer.
Unless sooner terminated, the advisory agreement between the Fund and M&T
Bank will continue in effect from year to year if such continuance is
approved at least annually by the Corporation's Board of Directors, or by
vote of a majority of the outstanding shares of a Fund (as defined in the
Prospectus), and by a majority of the Directors who are not parties to the
advisory agreement or interested persons (as defined in the Investment
Company Act of 1940) of any party to the advisory agreement, by vote cast
in person at a meeting called for such purpose. The advisory agreement is
terminable at any time on sixty days' written notice without penalty by the
Directors, by vote of a majority of the outstanding shares of a Fund, or by
M&T Bank. The advisory agreement also terminates automatically in the event
of its assignment, as defined in the Investment Company Act of 1940.
ADVISORY FEES
For its advisory services, M&T Bank receives an annual investment advisory
fee from the Fund as described in the Prospectus.
STATE EXPENSE LIMITATIONS
M&T Bank has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If the Fund's normal
operating expenses (including the investment advisory fee, but not
including brokerage commissions, interest, taxes, and extraordinary
expenses) exceed 2-1/2% per year of the first $30 million of average
net assets, 2% per year of the next $70 million of average net assets,
and 1-1/2% per year of the remaining average net assets, M&T Bank will
reimburse the Fund for its expenses over the limitation. If the Fund's
monthly projected operating expenses exceed this limitation, the
investment advisory fee paid will be reduced by the amount of the
excess, subject to an annual adjustment. If the expense limitation is
exceeded, the amount to be reimbursed by M&T Bank will be limited by
the amount of the investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
OTHER SERVICES

ADMINISTRATIVE SERVICES
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee set
forth in the prospectus.
CUSTODIAN AND PORTFOLIO ACCOUNTANT
State Street Bank and Trust Company, Boston, Massachusetts, is custodian
for the securities and cash of the Fund and provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company, Pittsburgh, Pennsylvania, the
Fund's registered transfer agent, maintains all necessary shareholder
records.
INDEPENDENT AUDITORS
The independent auditors for the Fund are Ernst & Young LLP, Pittsburgh,
Pennsylvania
BROKERAGE TRANSACTIONS

Pursuant to the Fund's Advisory Contract, M&T Bank determines which
securities are to be sold and purchased by the Fund and which brokers are
to be eligible to execute its portfolio transactions. Portfolio securities
of the Fund are normally purchased directly from the issuer or from an
underwriter or market maker for the securities. Purchases from dealers
serving as market makers may include the spread between the bid and asking
price. While M&T Bank generally seeks competitive spreads or commissions,
the Fund may not necessarily pay the lowest spread or commission available
on each transaction for reasons discussed below.
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the Adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to guidelines established by the
Directors. The Adviser may select brokers and dealers who offer brokerage
and research services. These services may be furnished directly to the Fund
or to the Adviser and may include: advice as to the advisability of
investing in securities; security analysis and reports; economic studies;
industry studies; receipt of quotations for portfolio evaluations; and
similar services. Research services provided by brokers and dealers may be
used by the Adviser or its affiliates in advising the Fund and other
accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have paid,
it would tend to reduce their expenses. The Adviser and its affiliates
exercise reasonable business judgment in selecting brokers who offer
brokerage and research services to execute securities transactions. They
determine in good faith that commissions charged by such persons are
reasonable in relationship to the value of the brokerage and research
services provided.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the Adviser, investments of the type
the Fund may make may also be made by those other accounts. When the Fund
and one or more other accounts managed by the Adviser are prepared to
invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner
believed by the Adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by the Fund or
the size of the position obtained or disposed of by the Fund. In other
cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Fund
DESCRIPTION OF FUND SHARES

The Corporation's Articles of Incorporation authorize the Board of
Directors to issue up to ten billion full and fractional shares of Common
Stock, of which seven billion shares have been classified into seven
classes of one billion shares each. Three billion shares remain
unclassified at this time. Shares of Classes A, B, C, D, E, F and G Common
Stock represent interests in Vision Money Market Fund, Vision Treasury
Money Market Fund, Vision New York Tax-Free Money Market Fund, Vision U.S.
Government Securities Fund, Vision New York Tax-Free Fund, Vision Growth
and Income Fund, and Vision Capital Appreciation Fund, respectively.
The Board of Directors may classify or reclassify any unissued shares of
the Corporation into one or more additional classes by setting or changing
in any one or more respects their respective preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption.
Shares have no subscription or pre-emptive rights and only such conversion
or exchange rights as the Board may grant in its discretion. When issued
for payment as described in the Fund's prospectus and this Statement of
Additional Information, the Fund's shares will be fully paid and non-
assessable. In the event of a liquidation or dissolution of the
Corporation, shares of the Fund are entitled to receive the assets
available for distribution belonging to the Fund, and a proportionate
distribution, based upon the relative asset values of that Fund and the
Corporation's other portfolios, of any general assets not belonging to any
particular portfolio which are available for distribution.
Rule 18f-2 under the Investment Company Act of 1940 provides that any
matter required to be submitted to the holders of the outstanding voting
securities of an investment company such as the Corporation shall not be
deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each portfolio affected by the
matter. A portfolio is not affected by a matter unless it is clear that the
interests of each portfolio in the matter are identical, or that the matter
does not affect any interest of the portfolio. Under Rule 18f-2, the
approval of an investment advisory agreement or any change in a fundamental
investment policy would be effectively acted upon with respect to a
portfolio only if approved by a majority of the outstanding shares of such
portfolio. However, Rule 18f-2 provides that the ratification of
independent certified public accountants, the approval of principal
underwriting contracts and the election of Directors may be effectively
acted upon by shareholders of the Corporation voting without regard to
class.
Notwithstanding any provision of Maryland law requiring a greater vote of
the Corporation shares (or of any class voting as a class) in connection
with any corporate action, unless otherwise provided by law (for example,
by Rule 18f-2) or by the Corporation's Articles of Incorporation, the
Corporation may take or authorize such action upon the favorable vote of
the holders of more than 50% of the outstanding common stock of the Fund
and the Corporation's other portfolios (voting together without regard to
class).
HOW TO BUY SHARES

Shares of the Fund are sold at net asset value plus an applicable sales
charge on days on which the New York Stock Exchange, M&T Bank, and the
Federal Reserve Wire System are open for business. The procedure for
purchasing shares of the Fund is explained in the prospectus under `How to
Buy Shares.''
HOW THE FUND VALUES ITS SHARES

The market value of the Fund's portfolio securities are determined as
follows:
ofor equity securities, according to the last sales price on a
national securities exchange, if applicable;
oin the absence of recorded sales for equity securities, according to
the mean between the last closing bid and asked prices;
ofor bond and other fixed income securities, as determined by an
independent pricing service;
ofor short-term obligations, according to the mean between bid and
asked prices as furnished by an independent pricing service or, for
short-term obligations with remaining maturities of 60 days or less
at the time of purchase, at amortized cost; or
ofor all other securities, at fair value as determined in good faith
by the Directors.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may reflect: institutional trading
in similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics, and other market data.
The Fund will value futures contracts, options on portfolio securities and
options on futures at their market values established by the applicable
exchanges at the close of trading on such exchanges, unless the Directors
determine in good faith that another method of valuing these positions is
necessary to appraise their fair value.
HOW TO REDEEM SHARES

The Fund redeems shares at the net asset value next calculated after the
Fund receives the redemption request. Redemption procedures are explained
in the prospectus under `How to Redeem Shares.''
REDEMPTION IN KIND
Although the Fund intends to redeem shares in cash, it reserves the right
under certain circumstances to pay the redemption price in whole or in part
by a distribution of securities from the Fund's portfolio. To the extent
available, such securities will be readily marketable.
Redemption in kind will be made in conformity with applicable Securities
and Exchange Commission rules, taking such securities at the same value
employed in determining net asset value and selecting the securities in a
manner the Directors determine to be fair and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them
before their maturity could receive less than the redemption value of their
securities and could incur transaction costs.
DETERMINING NET ASSET VALUE

Net asset value generally changes each day. The days on which net asset
value is calculated for shares of the Fund are described in the prospectus.
TAX STATUS

THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, a Fund must,
among other requirements:
oderive at least 90% of its gross income from dividends, interest,
and gains from the sale of securities;
oderive less than 30% of its gross income from the sale of securities
held less than three months;
oinvest in securities within certain statutory limits; and
odistribute to its shareholders at least 90% of its net income earned
during the year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends received as
cash or additional shares. The dividends received deduction for
corporations will apply to ordinary income distributions to the extent the
distribution represents amounts that would qualify for the dividends
received deduction to the Fund if the Fund were a regular corporation, and
to the extent designated by the Fund as so qualifying. Otherwise, these
dividends, and any short-term capital gains are taxable as ordinary income.
CAPITAL GAINS
Capital gains experienced by the Fund could result in an increase in
dividends. Capital losses could result in a decrease in dividends. If the
Fund realizes net long-term capital gains, it will distribute them at least
once every 12 months.
TOTAL RETURN

The average annual total return for the Fund is the average compounded rate
of return for a given period that would equate a $1,000 initial investment
to the ending redeemable value of that investment. The ending redeemable
value is computed by multiplying the number of shares owned at the end of
the period by the maximum offering price per share at the end of the
period. The number of shares owned at the end of the period is based on the
number of shares purchased at the beginning of the period with $1,000, less
any applicable sales load, adjusted over the period by any additional
shares, assuming the monthly reinvestment of all dividends and
distributions. Any applicable redemption fee is deducted from the ending
value of the investment based on the lesser of the original purchase price
or the net asset value of shares redeemed.
YIELD

The yield for the Fund is determined by dividing the net investment income
per share (as defined by the Securities and Exchange Commission) earned by
the Fund over a thirty-day period by the maximum offering price per share
of the Fund on the last day of the period. This value is then annualized
using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each
month over a twelve-month period and is reinvested every six months. The
yield does not necessarily reflect income actually earned by the Fund
because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders. To the extent that financial
institutions and broker/dealers charge fees in connection with services
provided in conjunction with an investment in the Fund, performance will be
reduced for those shareholders paying those fees.
PERFORMANCE COMPARISONS

The performance of shares of the Fund depends upon such variables as:
oportfolio quality;
oaverage portfolio maturity;
otype of instruments in which the portfolio is invested;
ochanges in interest rates and market value of portfolio securities;
ochanges in a Fund's expenses; and
ovarious other factors.
The Fund's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings
and offering price per share are factors in the computation of yield and
total return as described above.

Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute
offering price. The financial publications and/or indices which the Fund
uses in advertising may include:

oLIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in net asset value over a specific period of time. From time to
time, the Fund will quote its Lipper rankings in the growth and mid-
cap categories in advertising and sales literature.
oDOW JONES INDUSTRIAL AVERAGE (``DJIA'') represents share prices of
selected blue chip industrial corporations. The DJIA indicates daily
changes in the average price of stock of these corporations. Because
it represents the top corporations of America, the DJIA index is a
leading economic indicator for the stock market as a whole.
oSTANDARD & POOR'S DAILY STOCK PRICE INDICES OF 500 AND 400 COMMON
STOCKS are composite indices of common stocks in industry,
transportation, and financial and public utility companies that can
be used to compare to the total returns of funds whose portfolios
are invested primarily in common stocks. In addition, the Standard &
Poor's indices assume reinvestment of all dividends paid by stocks
listed on its indices. Taxes due on any of these distributions are
not included, nor are brokerage or other fees calculated in the
Standard & Poor's figures.
oRUSSELL 1000 GROWTH INDEX consists of those Russell 1000 securities
with a greater-than-average growth orientation. Securities in this
index tend to exhibit higher price-to-book and price-earnings
ratios, lower dividend yields and higher forecasted growth values.
oRUSSELL 2000 SMALL STOCK INDEX is a broadly diversified index
consisting of approximately 2,000 small capitalization common stocks
that can be used to compare to the total returns of funds whose
portfolios are invested primarily in small capitalization common
stocks.
oWILSHIRE 5000 EQUITY INDEX consists of nearly 5,000 common equity
securities, covering all stocks in the U.S. for which daily pricing
is available, and can be used to compare to the total returns of
funds whose portfolios are invested primarily in common stocks.
oCONSUMER PRICE INDEX is generally considered to be a measure of
inflation.
oNEW YORK STOCK EXCHANGE COMPOSITE INDEX is a market value weighted
index which relates all NYSE stocks to an aggregate market value as
of December 31, 1965, adjusted for capitalization changes.
oVALUE LINE COMPOSITE INDEX consists of approximately 1,700 common
equity securities. It is based on a geometric average of relative
price changes of the component stocks and does not include income.
oNASDAQ OVER-THE-COUNTER COMPOSITE INDEX covers 4,500 stocks traded
over the counter. It represents many small company stocks but is
heavily influenced by about 100 of the largest NASDAQ stocks. It is
a value-weighted index calculated on price change only and does not
include income.
oAMEX MARKET VALUE INDEX covers approximately 850 American Stock
Exchange stocks and represents less than 5% of the market value of
all US stocks. The AMEX is a value-weighted index calculated on
price change only and does not include income.
oMORNINGSTAR, INC., an independent rating service, is the publisher
of the bi-weekly Mutual Fund Values. Mutual Fund Values rates more
than l,000 NASDAQ-listed mutual funds of all types, according to
their risk-adjusted returns. The maximum rating is five stars, and
ratings are effective for two weeks.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Fund's returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Fund can
compare its performance, or performance for the types of securities in
which it invests, to a variety of other investments, such as bank savings
accounts, certificates of deposit, and Treasury bills and to money market
funds using the Lipper Analytical Services money market instruments
average. Unlike federally insured bank products, the shares of the Fund are
not insured. Unlike money market funds, which attempt to maintain a stable
offering price, the offering price of the Fund's shares fluctuates.
Advertisements may quote performance information which does not reflect the
effect of the sales load.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on
these developments by the Fund's portfolio manager and their views and
analysis on how such developments could affect the Fund. In addition,
advertising and sales literature may quote statistics and give general
information about the mutual fund industry, including the growth of the
industry, from sources such as the Investment Company Institute (`ICI'').
For example, according to the ICI, twenty-seven percent of American
households are pursuing their financial goals through mutual funds. These
investors, as well as business and institutions, have entrusted over $3
trillion to the more than 5,500 mutual funds available.

APPENDIX

Standard & Poor's Ratings Group Bond Ratings
AAA-Debt rated `AAA'' has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA-Debt rated `AA'' has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A-Debt rated `A'' has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher
rated categories.
BBB-Debt rated `BBB'' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories.
NR-Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not
rate a particular type of obligation as a matter of policy.
Plus (+) or minus (-): The ratings from AA to BBB may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Moody's Investors Service, Inc. Bond Ratings
AAA-Bonds which are rated AAA are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as `gilt edged.'' Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA-Bonds which are rated AA are judged to be of high quality by all
standards. Together with the AAA group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in AAA securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in AAA securities.
A-Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
BAA-Bonds which are rated BAA are considered as medium grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
NR-Not rated by Moody's.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through Baa in its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of its generic rating category.
Fitch Investors Service, Inc. Long-Term Debt Ratings
AAA-Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA-Bonds considered to be investment grade and of very high quality. The
obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA. Because bonds rated in the
AAA and AA categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated F-
1+.
A-Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB-Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore, impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than for
bonds with higher ratings.
NR-NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating symbol
to indicate the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the AAA category.

Moody's Investors Service, Inc. Short-Term Loan Ratings
MIG 1/VMIG 1-This designation denotes best quality. There is a present
strong protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.
MIG 2/VMIG 2-This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
Fitch Investors Service, Inc. Short-Term Debt Ratings
F-1+-Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1-Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2-Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great for issues assigned F-1+ and F-1 ratings.
Standard & Poor's Ratings Group Commercial Paper Ratings
A-1-This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess strong safety
characteristics are denoted with a plus sign (+) designation.
A-2-Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Moody's Investors Service, Inc. Commercial Paper Ratings
PRIME1-Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
PRIME-1 repayment capacity will normally be evidenced by the following
characteristics: Leading market positions in well established industries;
high rates of return on funds employed; conservative capitalization
structure with moderate reliance on debt and ample asset protection; broad
margins in earning coverage of fixed financial charges and high internal
cash generation; well-established access to a range of financial markets
and assured sources of alternate liquidity.
PRIME-2-Issuers (or related supporting institutions) rated PRIME-2 have a
strong capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

Cusip 92830F703
G01627-02

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:

(a) (Portfolios 1-6) Incorporated by reference to Part A of the
Registrant's Post-Effective Amendment No. 23 filed on June 27,
1996, pursuant to Rule 411 of the 1933 act (File Nos. 33-202673
and 811-5514); (Portfolio 7) Filed in Part A.
(b) Exhibits:
(1) Conformed copy of Articles of Incorporation of the
Registrant (11);
(i) Conformed Copy of Articles Supplementary (8);
(ii) Conformed copy of Articles Supplementary dated May 29,
1996; +
(2) Copy of By-Laws of the Registrant (11);
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Capital Stock of
the Registrant (8);
(i) Copy of Specimen Certificate for Shares of Capital
Stock of the Vision Capital Appreciation Fund; +
(5) (i) Conformed Copy of Investment Advisory Contract of the
Registrant (9);
(ii) Conformed Copy of Sub-Advisory Contract (10);
(iii) Conformed Copy of Exhibit B to Investment
Advisory Contract;(14)
(6) (i) Conformed Copy of Distributor's Contract of the
Registrant (9);
(a) Conformed copy of Distribution Plan of the
Registrant (9);
(ii) Conformed Copy of Administrative Services Agreement of
the Registrant (9);
(iii)................Conformed Copy of Shareholder Services
Plan of Registrant (9);
(iv) Conformed Copy of Exhibit C to Distributor's
Contract;(14)
(v) Copy of Amendment No. 1 to Exhibit A to Shareholder
Services Agreement;(14)
(vi) Conformed Copy of Amended and Restated Shareholder
Services Agreement (13);
(vii)................Copy of Amendment No. 1 to Exhibit A
to Shareholder Services Agreement;(14)

(7) Not applicable;

+ All Exhibits have been filed electronically.

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed September 3, l993. (File Nos. 33-
20673 and 811-5514)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed December 27, 1993 (File Nos. 33-
20673 and 811-5514)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed March 31, 1994 (File Nos. 33-20673
and 811-5514)
11. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 19 on Form N-1A filed June 27, 1994. (File Nos. 33-
20673 and 811-5514)
13. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 19 on Form N-1A filed May 3, 1996. (File Nos. 33-20673
and 811-5514)
14. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 23 on Form N-1A filed June 27, 1996. (File Nos. 33-
20673 and 811-5514)
(8) Conformed Copy of Custodian Agreement of the Registrant
(12);
(i) Copy of Amendment No. 2 to Exhibit A to
Custodian Contract;(14)
(9) Conformed Copy of Assignment of Transfer Agency and Service
Agreement of the Registrant (11);
(i) Copy of Amendment No. 2 to Exhibit A to
Transfer Agency and Service Agreement;(14)
(10) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered (11);
(11) Not applicable;
(12) Not applicable;
(13) Conformed copy of Initial Capital Understanding (11);
(14) Not applicable;
(15) (i) Copy of Rule 12b-1 Plan (7);
(a) Conformed Copy of Exhibit B to Rule
12b-1 Plan; (14)
(ii) Copy of Rule 12b-1 Agreement (7);
(a) Copy of Exhibit B to Rule
12b-1 Agreement; (14)
(iii) Copy of Dealer (Sales) Agreement (7);
(16) Copy of Schedule for Computation of Fund Performance Data
(12);
(i) Copy of Schedule for Computation of Fund Performance
Date for the Vision Capital Appreciation Fund; +
(17) Financial Data Schedules; (14)
(18) Not Applicable
(19) Conformed Copy of Power of Attorney; (14)

Item 25. Persons Controlled by or Under Common Control with Registrant
None

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class as of December 4, 1996

Shares of capital stock
($0.001 per Share par value)

Vision Money Market Fund 9,180
Vision New York Tax-Free Money Market Fund 448
Vision Treasury Money Market Fund 679
Vision U.S. Government Securities Fund 1,070
Vision New York Tax-Free Fund 1,405
Vision Growth and Income Fund 4,821
Vision Capital Appreciation Fund 1,215
+ All Exhibits have been filed electronically.

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed June 17, 1993. (File Nos. 33-20673
and 811-5514)
11. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 19 on Form N-1A filed June 27, 1994. (File Nos. 33-
20673 and 811-5514)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed June 26, 1995. (File Nos. 33-20673
and 811-5514)
14. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 23 on Form N-1A filed June 27, 1996. (File Nos. 33-
20673 and 811-5514)

Item 27. Indemnification: (7)

Item 28. Business and Other Connections of Investment Adviser:

(a) Manufacturers & Traders Trust Company (`M&T Bank'') performs
investment advisory services for the Registrant. M&T Bank is the
principal banking subsidiary of First Empire State Corporation, a
$12 billion bank holding company, as of December 31, 1995,
headquartered in Buffalo, New York. As of December 3l, l995, M&T
Bank (consolidated) had $10.2 billion in assets, and has 121
offices throughout Western New York State and New York's southern
tier, 22 offices in the Hudson Valley region of New York State,
plus offices in New York City, Albany, Syracuse, and Nassau, the
Bahamas.

M&T Bank was founded in 1856 and provides comprehensive banking
and financial services to individuals, governmental entities and
businesses throughout western New York. Registrant's investments
are managed through the Trust and Investment Services Division of
M&T Bank. As of December 31, 1996, M&T Bank had $1.8 billion in
assets under management for which it has investment discretion
(which includes employee benefits, personal trusts, estates,
agencies and other accounts). As of December 3l, 1995, M&T Bank
managed over $885 million in VISION money market mutual fund
assets. Except for Vision Group of Funds, Inc., M&T Bank does
not presently provide investment advisory services to any other
registered investment companies. The Funds' investments are
managed through the Trust & Investment Services Division of M&T
Bank.

The principal executive Officers and Directors of M&T Bank are
set forth in the following tables. Unless otherwise noted, the
position listed under Other Substantial Business, Profession,
Vocation or Employment is with M&T Bank.

(b)
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment

Brent D. Baird Director Private Investor
1350 One M&T Plaza
Buffalo, NY 14203-2396

C. Angela Bontempo Director Senior V.P. & Exec. Dir.
Elm & Carlton Streets Roswell Park Cancer
Buffalo, NY 14263-0001 Institute

Robert T. Brady Director Chairman, President and
East Aurora, NY 14052-0018 C.E.O. Moog, Inc.

William A. Buckingham Executive Officer Executive Vice President
One M&T Plaza First Empire State
19th Floor Corporation and
Buffalo, NY 14203-2399 Manufacturers and
Traders Trust Company

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed June 17, 1993. (File Nos. 33-20673
and 811-5514)

Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment Atwood
Collins, III Executive Officer President and CEO
350 Park Avenue The East New York
6th Floor Savings Bank and
New York, NY 10022-6022 Executive Vice
President M&T Bank

Barber B. Conable, Jr. Director Former Member of
P.O. Box 218 Congress; Retired
Alexander, NY 14005-0218 President
The World Bank

Richard E. Garman Director President and Chief
2544 Clinton Street Executive Officer
Buffalo, NY 14224-1092 A.B.C. Paving Co., Inc.
and Buffalo Crushed Stone,
Inc.

James V. Glynn Director President
151 Buffalo Avenue Maid of the Mist
Suite 204 Corporation
Niagara Falls, NY 14303-1288

Brian E. Hickey Executive Officer Executive Vice President
44 Exchange Street and President-Rochester
3rd Floor Division-Manufacturers
Rochester, NY 14614-2097 and Traders Trust
Company

Patrick W.E. Hodgson Director President Cinnamon
248 Pall Mall Street Investments Limited
Suite 400
London, Ontario
CANADA N6A5P6

James L. Hoffman Executive Officer Executive Vice President
700 Corporate Blvd. and President-Hudson Suite 701
Valley Division-
Newburgh, NY 12552-6046 Manufacturers and
Traders Trust Company

Samual T. Hubbard, Jr. Director President & CEO
1059 West Ridge Road The Alling and Cory
Rochester, NY 14615-2731 Company

Robert J. Irwin Advisory Director Chairman and CEO
Ellicott Station ASA Limited
P.O. Box 1210
Buffalo, NY 14205-1210

Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment
----
Wilfred J. Larson Director Retired President and
88 Oakland Place Chief Executive Officer
Buffalo, NY 14222-2030 Westwood-Squibb
Pharmaceuticals Inc.
Barbara L. Laughlin Executive Officer Executive Vice President
One M&T Plaza First Empire State
13th Floor Corporation and
Buffalo, NY 14203-2399 Manufacturers and
Traders Trust Company

Jorge G. Pereira Director Vice Chairman of the
350 Park Ave. Board First Empire State
6th Floor Corporation and
New York, NY 10022-6022 Manufacturers and
Traders Trust Company

John L. Pett Executive Officer Executive Vice President
One Fountain Plaza and Chief Credit Officer
9th Floor Manufacturers and
Buffalo, NY 14203-1495 Traders Trust Company

Michael P. Pinto Executive Officer Executive Vice President
One M&T Plaza and Chief Financial
5th Floor Officer Manufacturers
Buffalo, NY 14203-2399 and Traders Trust
Company

Donald P. Quinlan Director Retired Chairman of the
27 Pine Terrace Board and Chief
Orchard Park, NY 14127-3929 Executive Officer
Graphic Controls
Corporation

William C. Rappolt Executive Officer Executive Vice President
One M&T Plaza and Treasurer
19th Floor First Empire State
Buffalo, NY 14203-2399 Corporation and
Manufacturers and
Traders Trust Company

Melinda R. Rich Director President
P.O. Box 245 Rich Entertainment
Buffalo, NY 14240-0245 Group;

Robert E. Sadler, Jr. Executive Officer President Manufacturers
One M&T Plaza and Traders Trust
19th Floor Company and
Buffalo, NY 14203-2399 Executive Vice President
First Empire State
Corporation

Harry R. Stainrook Executive Officer Executive Vice President
One M&T Plaza First Empire State
7th Floor Corporation and
Buffalo, NY 14203-2399 Manufacturers and
Traders Trust Company

Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment
----
Raymond D. Stevens, Jr. Director Retired Chairman of
11 Summer Street the Board Pratt &
Suite 308 Lambert United, Inc.
Buffalo, NY 14209-2256

Herbert L. Washington Director President
3280 Monroe Avenue H.L.W. Fast Track, Inc.
Rochester, NY 14618-4608

John L. Wehle, Jr. Director Chairman of the
445 St. Paul Street Board, President &
Rochester, NY 14605-1775 Chief Executive
Officer, Genessee
Corporation

Robert G. Wilmers Director and Chairman of the Board,
One M&T Plaza Executive Officer President and Chief
19th Floor Executive Officer
Buffalo, NY 14203-2399 First Empire State
Corporation; and
Chairman of the Board
and Chief Executive Officer
Manufacturers and Traders Trust
Company

The information required by this item with regard to the Corporation's sub-
adviser, Harbor Capital Management Company, Inc., is incorporated by
reference to Form ADV #801-14882, which was filed on March 27, 1993 by
Harbor Capital Management Company, Inc.

Item 29. Principal Underwriters:

(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the following
open-end investment companies: 111 Corcoran Funds; Annuity
Management Series; Arrow Funds; Automated Government Money Trust;
BayFunds; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
Cash Trust Series II; Cash Trust Series, Inc.; DG Investor
Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated
American Leaders Fund, Inc.; Federated ARMs Fund; Federated
Equity Funds; Federated Equity Income Fund, Inc.; Federated Fund
for U.S. Government Securities, Inc.; Federated GNMA Trust;
Federated Government Income Securities, Inc.; Federated
Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated
Institutional Trust; Federated Insurance Series; Federated Master
Trust; Federated Municipal Opportunities Fund, Inc.; Federated
Municipal Securities Fund, Inc.; Federated Municipal Trust;
Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return
Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities
Fund: 5-10 Years; Federated Utility Fund, Inc.; First Priority
Funds; Fixed Income Securities, Inc.; Fortress Utility Fund,
Inc.; High Yield Cash Trust; Independence One Mutual Funds;
Intermediate Municipal Trust; International Series, Inc.;
Investment Series Funds, Inc.; Investment Series Trust; Liberty
U.S. Government Money Market Trust; Liquid Cash Trust; Managed
Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star Funds;
Targeted Duration Trust; Tax-Free Instruments Trust; The Biltmore
Funds; The Biltmore Municipal Funds; The Monitor Funds; The
Planters Funds; The Starburst Funds; The Starburst Funds II; The
Virtus Funds; Tower Mutual Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury
Obligations; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for
the following closed-end investment company: Liberty Term Trust,
Inc.- 1999.

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Richard B. Fisher Director, Chairman, Chief Federated
Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive VicePresident and
Federated Investors Tower President, Federated, Treasurer
Pittsburgh, PA 15222-3779 Securities Corp.

John W. McGonigle Director, Federated
Federated Investors Tower Securities Corp. Pittsburgh, PA
15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Assistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Assistant Secretary,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Item 30. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Vision Group of Funds, Inc. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

Federated Shareholder P.O. Box 8600
Services Company Boston, Massachusetts 02266-8600
("Transfer Agent, Dividend
Disbursing Agent and Portfolio
Recordkeeper")

Federated Administrative Services Federated Investors Tower
("Administrator") Pittsburgh, Pennsylvania 15222-3779

Manufacturers and Traders TrustOne M&T Plaza
Company Buffalo, New York 14240
("Adviser")

Harbor Capital Management 125 High Street
Company, Inc. Boston, Massachusetts 02110-2701
(`Sub-Adviser'' to the Vision
Growth and Income Fund)

State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, Massachusetts 02266-8600

Item 31. Management Services: Not applicable.

Item 32. Undertakings:

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees/Directors and the calling of special shareholder
meetings by shareholders.

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, VISION GROUP OF FUNDS,
INC., certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 20th day of December, 1996.

VISION GROUP OF FUNDS, INC.

BY: /s/Victor R. Siclari
Victor R. Siclari, Secretary
Attorney in Fact for Edward C. Gonzales
December 20, 1996

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:

NAME TITLE DATE

By:/s/ Victor R. Siclari
Victor R. Siclari Attorney In Fact December 20, 1996
SECRETARY For the Persons
Listed Below

NAME TITLE

Edward C. Gonzales* President and Treasurer
(Chief Executive Officer
and Principal Financial and
Accounting Officer)

Randall I. Benderson* Director
Joseph J. Castiglia* Director

Daniel R. Gernatt, Jr.* Director

George K. Hambleton, Jr.* Director

* By Power of Attorney

VISION GROUP OF FUNDS, INC.

ARTICLES SUPPLEMENTARY

Vision Group of Funds, Inc., a Maryland Corporation having its
principal office in the State of Maryland in the City of Baltimore
(hereinafter called the "Corporation") certifies:

FIRST:Pursuant to Section 2-208 of the Maryland General Corporation
Law and pursuant to the following resolutions adopted by the
directors of the Corporation at a meeting held on May 29, 1996,
the Board of Directors of the Corporation has classified as
Class G Common Stock One Billion (1,000,000,000) previously
unissued and unclassified shares of the total Ten Billion
(10,000,000,000) authorized shares of capital stock of the
Corporation (par value One Mill ($.001) per share).

RESOLVED, that pursuant to Article VI of the Articles of Incorporation
of the Corporation, One Billion previously unissued and
unclassified shares of the Ten Billion (10,000,000,000)
authorized shares of capital stock of the Corporation (of
the par value of One Mill ($.001) per share and the
aggregate par value of One Million Dollars ($1,000,000)) be,
and hereby are, classified and designated as Class G Common
Stock;

FURTHER RESOLVED, that each share of Class G Common Stock shall have
all of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption that
are set forth in the Articles of Incorporation of the
Corporation with respect to its shares of capital stock.
FURTHER RESOLVED, that the actions of the officers of the Corporation
in filing Articles Supplementary with the State Department
of Assessments and Taxation of Maryland regarding the
classification of the Fund's shares as Class G Common Stock
be, and the same hereby are approved

SECOND: The shares of Class G Common Stock of the Corporation
classified pursuant to the resolutions set forth in Article
FIRST of these Articles of Supplementary have been classified
by the Corporation's Board of Directors under the authority
contained in the Charter of the Corporation.

THIRD:The foregoing Articles Supplementary does not increase the
authorized stock of the Corporation or the aggregate par value
thereof.

IN WITNESS WHEREOF, Vision Group of Funds, Inc. has caused these
Articles to be executed in its name and on its behalf by its Vice President
and witnessed by its Secretary on May 29, 1996.

The undersigned, Charles L. Davis, Vice President of the Corporation,
hereby acknowledges in the name and on behalf of the Corporation the
foregoing Articles Supplementary to be its corporate act and further
certifies to the best of his knowledge, information and belief, that the
matters and facts set forth herein with respect to the authorization and
approval hereof are true in all material respects and that this statement
is made under the penalties of perjury.

Attest: VISION GROUP OF FUNDS, INC.

/s/ Victor R. Siclari /s/ Charles L. Davis
Victor R. Siclari Charles L. Davis
Secretary Vice President

VISION GROUP OF FUNDS, INC.

Number Shares
PORTFOLIO
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
Account No. Alpha Code See Reverse Side For
Certain Definitions

THIS IS TO CERTIFY THAT is the owner of

CUSIP 92830F703

Fully Paid and Non-Assessable Shares of Beneficial Interest of the VISION
CAPITAL APPRECIATION FUND Portfolio of VISION GROUP OF FUNDS, INC. hereafter
called the `Company'', transferable on the books of the Company by the owner,
in person or by duly authorized attorney, upon surrender of this certificate
properly endorsed.
The shares represented hereby are issued and shall be held subject to the
provisions of the Articles of Incorporation and By-Laws of the Company, and all
amendments thereto, to all of which the holder by acceptance hereof assents.

This Certificate is not valid unless countersigned by the Transfer Agent.

IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed in
its name by its proper officers and to be sealed with its seal.

Dated: VISION GROUP OF FUNDS, INC.
Corporate Seal
1988
Maryland

/s/Edward C. Gonzales /s/ Victor R. Siclari
President & Treasurer Secretary

Countersigned:
FEDERATED SHAREHOLDER SERVICES COMPANY
(Pittsburgh) Transfer Agent
By:
Authorized Signature

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-
....Custodian...
TEN ENT - as tenants by the entireties (Cust)
(Minors)
JT TEN - as joint tenants with right of under
Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)

Additional abbreviations may also be used though not in the above list.
The Company will furnish to any stockholder, on request and without charge,
a full statement of designations and any preferences, conversion and other
right, voting powers, restrictions, limitations as to dividends, qualifications,
and terms and conditions of redemption of the stock of each class which the
corporation is authorized to issue.

For value received hereby sell, assign, and transfer unto
----------

Please insert social security or other
identifying number of assignee

- -----------------------------------------------------------------------------
(Please print or typewrite name and address, including zip code, of assignee)

- -----------------------------------------------------------------------------

shares
- ----------------------------------------------------------------------
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint
------------------------------------------
Attorney
- ------------------------------------------------------------------
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.

Dated
----------------------
NOTICE:
------------------------------
The signature to this assignment must correspond
with the name as written upon the face of the
certificate in every particular, without
alteration or enlargement or any change whatever.

DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE

Page One

A. The Certificate is outlined by a black one-half inch border.

B. The number in the upper left-hand corner and the number of shares in the
upper right-hand corner are outlined by octagonal boxes.

C. The cusip number in the middle right-hand area of the page is boxed.

D. The Maryland corporate seal appears in the bottom middle of the page.

Page Two

The social security or other identifying number of the assignee appears
in a box in the top-third bottom-left area of the page.

Schedule for Computation Initial
of Fund Performance Data Invest of: $500
Offering
Vision Capital Appreciation Price/
Fund
Share= $10.58
Return Since Inception
ending 11/30/96 NAV= $10.00

FYE: July
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Begin Capital Reinvest Ending Total
DECLARED: QUARTERLY Reinvest Period Dividend Gain Price Period Ending Invest
PAID: QUARTERLY Dates Shares /Share /Share /Share Shares Price Value
7/31/96 47.259 0.000000000 0.00000 $9.46 47.259 $9.46 $447.07
8/31/96 47.259 0.000000000 0.00000 $10.07 47.259 $10.07 $475.90
9/20/96 47.259 0.026000000 0.00000 $10.50 47.376 $10.50 $497.45
9/30/96 47.376 0.000000000 0.00000 $10.68 47.376 $10.68 $505.98
10/31/96 47.376 0.000000000 0.00000 $10.89 47.376 $10.89 $515.92
11/30/96 47.376 0.000000000 0.00000 $11.46 47.376 $11.46 $542.93

</TABLE>

Vision Capital Yield = 2{( $12,430.80 - $0.00 )+1)^6-1}=
Appreciation Fund

Computation of SEC Yield 1,411,042 *( $12.13 - 0.02020)

As of: November 30, 1996
SEC Yield = 0.87%

Dividend and/or Interest
Inc for the 30 days ended $12,430.80

Net Expenses for $0.00
the Period

Avg Daily Shares
Outstanding and entitled
to receive dividends 1,411,042

Maxium offering price $12.13
per share as of 11-30-96

Undistributed net income 0.02020

Tax Equivalent Yield
(assumes individual
does not itemize
on Federal Return)
100 % minus the Federal
taxable % (100%-28%=72%)

30 SEC yield / by the tax
equiv % (0.00% / 72.0%)= 1.21%
</TABLE>