VISION GROUP OF FUNDS INC, 485APOS, 1999-03-12

VISION GROUP OF FUNDS INC
485APOS, 1999-03-12

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1933 Act File No. 33-20673
1940 Act File No. 811-5514

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. 34 ............................ X
---- ------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
------

Amendment No. 35 .......................................... X
---- ------

VISION GROUP OF FUNDS, INC.

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010
(Address of Principal Executive Offices)

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

Victor R. Siclari, Esquire,
Federated Investors Tower,
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

___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)
_X_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.

Copy to:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037

<PAGE>

CROSS-REFERENCE SHEET

This amendment to the Registration Statement of Vision Group of Funds,
Inc., which is comprised of ten portfolios: (1) Vision Money Market Fund, (a)
Class A Shares and (b) Class S Shares, (2) Vision Treasury Money Market Fund,
(a) Class A Shares and (b) Class S Shares, (3) Vision New York Tax-Free Money
Market Fund, (4) Vision New York Municipal Income Fund, (a) Class A Shares, (5)
Vision U.S. Government Securities Fund, (a) Class A Shares (6) Vision High Yield
Bond Fund (a) Class A Shares,(7) Vision Mid Cap Value Fund (formerly, Vision
Growth and Income Fund), (a) Class A Shares (b) Class B Shares (8) Vision Mid
Cap Growth Fund, (formerly, Vision Capital Appreciation Fund), (a) Class A
Shares (b) Class B Shares,(9) Vision Large Cap Value Fund (formerly, Vision
Equity Income Fund), (a) Class A Shares (b) Class B Shares, (10) Vision Large
Cap Growth Fund, (a) Class A Shares (b) Class B Shares. This Amendment to the
Registration Statement only applies to Funds (4)-(10) and is comprised of the
following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)
<TABLE>
<CAPTION>

Item 1. Cover Page.........................Cover Page.
----------
Item 2. Synopsis...........................Summary of Fund Expenses.
--------
Item 3. Condensed Financial
Information........................Financial Highlights; How the Funds Show Performance.
Item 4. General Description of
Registrant.........................Synopsis; How the Funds Invest; How the Fund Invests; Fund Objectives and
Policies; Investment Objective; Investment Policies; Portfolio Turnover;
Acceptable Investments; Investment Techniques, Features and Limitations;
Investment Limitations; Appendix.
Item 5. Management of the Fund.............Fund Management, Distribution, and Administration; Board of Directors;
----------------------
Investment Adviser; Distribution of Fund Shares; Administration of the Funds;
Brokerage Transactions.
Item 6. Capital Stock and Other
Securities.........................Description of Fund Shares; Voting Rights and Other Information; Tax
Information.
Item 7. Purchase of Securities Being
Offered............................How the Funds Value Their Shares; Minimum Initial Investment; How to Buy
Shares; How to Exchange Shares; What Fund Shares Cost.
Item 8. Redemption or Repurchase...........How to Redeem Shares.
------------------------

Item 9. Pending Legal Proceedings..........None.
-------------------------
</TABLE>

<PAGE>

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

Item 10. Cover Page..................................Cover Page.
----------
Item 11. Table of Contents...........................Table of Contents.
-----------------
Item 12. General Information and
History.....................................General Information
About the Funds;
Item 13. Investment Objectives and
Policies....................................Investment Objectives
and Policies; Types of Acceptable Investments and
Techniques; Investment Limitations.
Item 14. Management of the Fund......................Vision Group of Funds, Inc. Management.
----------------------
Item 15. Control Persons and Principal
Holders of Securities.......................Not Applicable
Item 16. Investment Advisory and Other
Services....................................Investment Advisory Services; Other Services;
--------
Item 17. Brokerage Allocation........................Brokerage Transactions.
--------------------
Item 18. Capital Stock and Other
Securities..................................Description of Fund Shares.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered ....................................How To Buy Shares; Determining Market Value of Securities; Determining Net
Asset Value; Redeeming Fund Shares.
Item 20. Tax Status..................................Tax Status.
----------
Item 21. Underwriters................................Not applicable.
------------
Item 22. Calculation of Performance
Data........................................Performance Comparisons; Total Return; Yield; Tax-Equivalent Yield;
Tax-Equivalency Table.
Item 23. Financial
Statements
Incorporated by
reference to the
Registrant's
Annual Report
dated April 30,
1998 and
Semi-Annual Report
dated October 31,
1998.
</TABLE>

INSERT LOGO
PROSPECTUS

VISION GROUP OF FUNDS, INC.
PROSPECTUS DATED MAY __, 1999

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

Class A Shares

VISION U.S. GOVERNMENT SECURITIES FUND
VISION NEW YORK MUNICIPAL INCOME FUND

VISION HIGH YIELD BOND FUND

Class A Shares and Class B Shares

VISION MID CAP VALUE FUND
(formerly Vision Growth & Income Fund)
VISION MID CAP GROWTH FUND
(formerly Vision Capital Appreciation Fund)
VISION LARGE CAP VALUE FUND
(formerly Vision Equity Income Fund)
VISION LARGE CAP GROWTH FUND

The shares offered by this prospectus are not deposits or obligations of
Manufacturers and Traders Trust Company ("M&T bank"), are not endorsed or
guaranteed by M&T bank, 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 each of the Funds, and can help you
decide which of the Funds are suitable investments for you. Please read the
prospectus before you invest and keep it for future reference.

The Vision High Yield Bond Fund may invest primarily in lower rated bonds,
commonly referred to as junk bonds. Investments of this type are subject to a
greater risk of loss of principal and interest than investments in higher rated
securities. Investors should carefully assess the risks associated with an
investment in this Fund. The Fund's adviser will endeavor to minimize these
risks by diversifying the portfolio investments and by employing careful credit
analysis of the portfolio investments.

You can find additional facts about each of the Funds in their combined
Statement of Additional Information ("SAI") dated May __, 1999, which has also
been filed with the Securities and Exchange Commission ("SEC"). The information
contained in the SAI is incorporated by reference into this prospectus. To
obtain a free copy of the SAI, or a paper copy of this prospectus, if you have
received it electronically, or to make other inquiries about any of these Funds,
simply call or write Vision Group of Funds, Inc. at the telephone number or
address below. The SAI, material incorporated by reference into this document,
and other information regarding the Funds is maintained electronically with the
SEC at Internet Web site (http://www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE 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) 635-9368

<PAGE>

TABLE OF CONTENTS

INSERT TOC-TO COME

<PAGE>

SYNOPSIS

INVESTMENT OBJECTIVES AND POLICIES
Vision Group of Funds, Inc. (the "Corporation") offers you a convenient,
affordable way to participate in ten separate, professionally managed
portfolios. This prospectus describes seven of the portfolios: the Vision U.S.
Government Securities Fund, Vision New York Municipal Income Fund, Vision High
Yield Bond Fund, Vision Mid Cap Value Fund, Vision Mid Cap Growth Fund, Vision
Large Cap Value Fund, and Vision Large Cap Growth Fund. The three other money
market portfolios, Vision Money Market Fund, Vision Treasury Money Market Fund,
and Vision New York Tax-Free Money Market Fund, are described in a separate
prospectus.

VISION U.S. GOVERNMENT SECURITIES FUND

("U.S. GOVERNMENT SECURITIES FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS
CURRENT INCOME BY INVESTING PRIMARILY IN SECURITIES THAT ARE GUARANTEED AS TO
PAYMENT OF PRINCIPAL AND INTEREST BY THE U.S. GOVERNMENT, ITS AGENCIES OR
INSTRUMENTALITIES. CAPITAL APPRECIATION IS A SECONDARY INVESTMENT CONSIDERATION.
(SEE "HOW THE FUNDS INVEST.")

VISION NEW YORK MUNICIPAL INCOME FUND

("NEW YORK MUNICIPAL INCOME FUND") SEEKS CURRENT INCOME WHICH IS EXEMPT
FROM FEDERAL REGULAR INCOME TAX AND THE PERSONAL INCOME TAXES IMPOSED BY THE
STATE OF NEW YORK AND NEW YORK MUNICIPALITIES AND IS CONSISTENT WITH THE
PRESERVATION OF CAPITAL. (SEE "HOW THE FUNDS INVEST.")

VISION HIGH YIELD BOND FUND

("HIGH YIELD BOND FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS HIGH
CURRENT INCOME BY INVESTING PRIMARILY IN LOWER-RATED, FIXED INCOME SECURITIES.
CAPITAL APPRECIATION IS A SECONDARY OBJECTIVE. (SEE "HOW THE FUNDS INVEST.")

VISION MID CAP VALUE FUND (formerly Vision Growth & Income Fund)

("MID CAP VALUE FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS LONG-TERM
GROWTH OF CAPITAL AND INCOME. THE MID CAP VALUE FUND PURSUES ITS INVESTMENT
OBJECTIVE BY INVESTING IN A DIVERSIFIED PORTFOLIO CONSISTING PRIMARILY OF EQUITY
SECURITIES (E.G., COMMON STOCK, CONVERTIBLE SECURITIES), ALTHOUGH IT MAY ALSO
INVEST IN DEBT SECURITIES (E.G., BONDS, NOTES). (SEE "HOW THE FUNDS INVEST.")

VISION MID CAP GROWTH FUND (formerly Vision Capital Appreciation Fund)

("MID CAP GROWTH FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS TO PRODUCE
LONG- TERM CAPITAL APPRECIATION 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. (SEE "HOW THE
FUNDS INVEST.")

VISION LARGE CAP VALUE FUND (formerly Vision Equity Income Fund)

("LARGE CAP VALUE FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS TO PROVIDE
CURRENT INCOME. CAPITAL APPRECIATION IS A SECONDARY, NON-FUNDAMENTAL
CONSIDERATION. THE LARGE CAP VALUE FUND PURSUES ITS INVESTMENT OBJECTIVE BY
INVESTING IN A DIVERSIFIED PORTFOLIO CONSISTING PRIMARILY OF INCOME-PRODUCING
EQUITY SECURITIES OF DOMESTIC COMPANIES (E.G., COMMON AND PREFERRED STOCKS,
CONVERTIBLE SECURITIES). THE LARGE CAP VALUE FUND ALSO MAY INVEST IN FOREIGN
EQUITY SECURITIES AND DEBT OBLIGATIONS. (SEE "HOW THE FUNDS INVEST.")

VISION LARGE CAP GROWTH FUND

("LARGE CAP GROWTH FUND") IS A DIVERSIFIED PORTFOLIO WHICH SEEKS CAPITAL
APPRECIATION. THE LARGE CAP VALUE FUND PURSUES ITS INVESTMENT OBJECTIVE BY
INVESTING IN A DIVERSIFIED PORTFOLIO CONSISTING PRIMARILY OF EQUITY SECURITIES
(PRIMARILY COMMON STOCKS OF THE LARGEST GROWTH COMPANIES TRADED IN THE U.S.
STOCK MARKETS). THE LARGE CAP GROWTH FUND ALSO MAY INVEST IN FOREIGN EQUITY
SECURITIES, PRIMARILY THROUGH AMERICAN DEPOSITARY RECEIPTS. (SEE "HOW THE FUNDS
INVEST.")

<PAGE>

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

MANAGEMENT OF THE FUNDS
The Funds' investment adviser is Manufacturers and Traders Trust Company ("M&T
Bank" or "Adviser"). M&T Bank makes investment decisions for the Funds. M&T Bank
is the principal banking subsidiary of M&T Bank Corporation. (See "Adviser's
Background").

SHAREHOLDER SERVICES
When you become a shareholder, you can easily get information about your
account, and about the Funds and their services by calling M&T Bank's Mutual
Fund Services at (800) 836-2211 (in the Buffalo area, phone 635-9368).

RISK FACTORS
An investment in the Funds involves certain risks that are explained more fully
in the sections of the prospectus discussing each Fund's investment
techniques.

YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or experience other date-related problems. The Year 2000 problem may cause
systems to process information incorrectly and could disrupt businesses that
rely on computers, like the Fund.

While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.

However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities, will have
difficulty determining the Year 2000 readiness of those entities. This is
especially true of entities or issuers in emerging markets.

The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.

<PAGE>

SUMMARY OF FUND EXPENSES

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

U.S. Government New York Municipal High Yield Mid Cap Value Fund
Securities Fund Income Fund Bond Fund
Class A Class A Class A Class A Class B
-------------------------------------------------------------------------------
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.50% 4.50% 4.50% 5.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None None None None
Contingent Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable) None None None None 5.50%
Redemption Fees
(as a percentage of amount redeemed, if None None None None None
applicable)
Exchange Fee None None None None None

Annual Operating Expenses
(As a percentage of average net assets)
Management Fee (after waiver, if applicable) (1) 0.65% 0.50% 0.70% 0.70% 0.70%
12b-1 Fees (2) 0.00% 0.00% 0.00% 0.00% 0.75%
Other Expenses (3) 0.27% 0.32% 1.38% 0.51% 0.51%
Shareholder Servicing Agent Fee (4) 0.00% 0.00% 0.00% 0.25% 0.25%
Total Operating Expenses (after waivers if 0.92% 0.82% 2.08% 1.21% 1.96%
applicable) (5)

Mid Cap Growth Fund Large Cap Value Fund Large Cap Growth Fund
Class A Class B Class A Class B Class A Class B
--------------------------------------------------------------------------------
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 5.50% None 5.50% None 5.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None None None None None
Contingent Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable) None 5.50% None 5.50% None 5.50%
Redemption Fees (as a percentage of amount
redeemed, if applicable) None None None None None None
Exchange Fee None None None None None None

Annual Operating Expenses
(As a percentage of average net assets)
Management Fee (after waiver, if applicable) (1) 0.85% 0.85% 0.70% 0.70% 0.85% 0.85%
12b-1 Fees (2) 0.00% 0.75% 0.00% 0.75% 0.00% 0.75%
Other Expenses (3) 0.65% 0.65% 0.31% 0.31% 0.69% 0.69%
Shareholder Servicing Agent Fee (4) 0.25% 0.25% 0.00% 0.25% 0.00% 0.25%
Total Operating Expenses (after waiver if 1.50% 2.25% 1.01% 2.01% 1.54% 2.54%
applicable) (5)

</TABLE>

<PAGE>

(1) The management fee has been reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any time
at its sole discretion. The maximum management fee is 0.70% for the U.S.
Government Securities Fund Class A and the New York Municipal Income Fund Class
A.

(2) The U.S. Government Securities Fund Class A, New York Municipal Income Fund
Class A, High Yield Bond Fund Class A, Mid Cap Value Class A Shares, Mid Cap
Growth Fund Class A Shares, Large Cap Value Fund Class A Shares, and Large Cap
Growth Fund Class A Shares have no present intention of paying or accruing 12b-1
fees. If the Funds were paying or accruing 12b-1 fees, they would be able to pay
up to 0.25% of each Funds' daily average assets for 12b-1 fees. See "Fund
Management, Distribution and Administration."

(3) Other expenses for the Mid Cap Growth Fund were 0.66% absent the voluntary
waivers of the administrative fees by the administrator. The administrator can
terminate this voluntary waiver at any time at its sole discretion.

(4) The U.S. Government Securities Fund Class A, New York Municipal Income Fund
Class A, High Yield Bond Fund Class A Shares, Large Cap Value Class A Shares,
and Large Cap Growth Fund Class A Shares have no present intention of paying or
accruing shareholder servicing fees. If the Funds were paying or accruing
shareholder servicing fees, they would be able to pay up to 0.25% of each Funds'
daily average assets for shareholder servicing fees. See "Fund Management,
Distribution and Administration."

(5) The Total Fund Operating Expenses for the U.S. Government Securities Fund
Class A Shares, New York Municipal Income Fund Class A Shares, and Large Cap
Value Fund Class A Shares in the table above are based on expenses expected
during the fiscal year ending April 30, 1999 and were 1.03%, 0.96%, and 1.08%
respectively for the fiscal year ended April 30, 1998. The Total Operating
Expenses would have been 1.12% for the U.S. Government Securities Fund Class A
Shares, 1.27% for the New York Municipal Income Fund Class A Shares, 1.51% for
the Mid Cap Growth Fund Class A Shares, and 1.60% for the Large Cap Value Fund
Class A Shares absent the voluntary waivers described above. The Annual
Operating Expenses of the High Yield Bond Fund Class A Shares, Mid Cap Value
Fund Class B Shares, Mid Cap Growth Fund Class B Shares, Large Cap Value Class B
Shares Large-Cap Growth Fund Class A Shares, and Large-Cap Growth Fund Class B
Shares are based on expenses expected during the fiscal year ending April 30,
2000.

The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder of the Funds will bear either directly or
indirectly. For more complete descriptions of the various costs and expenses,
see "Fund Management, Distribution and Administration" in the prospectus.
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

EXAMPLE
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. As noted in the table above, the Funds charge no
redemption fees.

U.S. Government New York Municipal High Yield
Securities Fund Income Fund Bond Fund Mid Cap Value Fund
Class A Class A Class A Class A Class B
----------------------------------------------------------------------------------------------------
1 Year $54 $53 $65 $67 $77
3 Years $73 $70 $107 $91 $105
5 Years $94 $88 N/A $118 N/A
10 Years $153 $142 N/A $194 N/A

Mid Cap Growth Fund Large Cap Value Fund Large Cap Growth Fund
Class A Class B Class A Class B Class A Class B
----------------------------------------------------------------------------------------------------
1 Year $69 $79 $65 $77 $70 $82
3 Years $100 $114 $85 $107 $101 $122
5 Years $132 N/A $108 N/A N/A N/A
10 Years $224 N/A $172 N/A N/A N/A

The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.

</TABLE>

<PAGE>

FINANCIAL HIGHLIGHTS

(For a Share outstanding throughout each period)

The following table has been audited by Ernst & Young LLP, the Funds'
independent auditors. Their report, dated June 17, 1998, on the Funds' financial
statements for the fiscal year ended April 30, 1998, and on the following table
for the periods presented, is included in the Annual Report, which is
incorporated by reference into the SAI. This table should be read in conjunction
with the Funds' financial statements and notes thereto, which may be obtained
from the Funds. Since the date of this prospectus (effective May __, 1999), the
following funds have changed their names and/or have designated their
outstanding Shares as Class A Shares: Vision U.S. Government Securities Fund,
Vision New York Municipal Income Fund, Vision Mid Cap Value Fund (formerly
Vision Growth & Income Fund), Vision Mid Cap Growth Fund (formerly Vision
Capital Appreciation Fund), Vision Large Cap Value Fund (formerly Vision Equity
Income Fund). In addition, as of the date of this prospectus, Vision High Yield
Bond Fund and Vision Large Cap Growth Fund began publicly offering their Shares
for sale and, therefore, have no prior performance.

<PAGE>

NET DISTRIBUTIONS
NET ASSET INVESTMENT NET REALIZED DISTRIBUTIONS IN EXCESS OF DISTRIBUTIONS
YEAR VALUE, INCOME AND UNREALIZED TOTAL FROM FROM NET NET FROM NET
ENDED BEGINNING (OPERATING GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT REALIZED TOTAL
APRIL 30, OF PERIOD LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS DISTRIBUTIONS

U.S. GOVERNMENT SECURITIES FUND
1994(a) $10.00 0.34 (0.75) (0.41) (0.34) -- -- (0.34)
1995 $9.25 0.56 (0.16) 0.40 (0.56) -- -- (0.56)
1996 $9.09 0.52 0.22 0.74 (0.52) -- -- (0.52)
1997 $9.31 0.58 (0.03) 0.55 (0.58) -- -- (0.58)
1998 $9.28 0.60 0.34 0.94 (0.60) (0.01)(i) -- (0.61)
NEW YORK MUNICIPAL INCOME FUND (FORMERLY, NEW YORK TAX-FREE FUND)
1994(a) $10.00 0.20 (0.39) (0.19) (0.20) -- -- (0.20)
1995 $9.61 0.46 0.06 0.52 (0.46) -- -- (0.46)
1996 $9.67 0.46 0.23 0.69 (0.46) -- -- (0.46)
1997 $9.90 0.48 0.18 0.66 (0.48) -- -- (0.48)
1998 $10.08 0.46 0.38 0.84 (0.46) -- (0.04) (0.50)
GROWTH AND INCOME FUND
1994(e) $10.00 0.07 (0.08) (0.01) (0.06) -- -- (0.06)
1995 $9.93 0.21 0.43 0.64 (0.22) -- -- (0.22)
1996 $10.35 0.13 2.98 3.11 (0.11) -- -- (0.11)
1997 $13.35 0.13 2.35 2.48 (0.13) -- (0.59) (0.72)
1998 $15.11 0.11 4.34 4.45 (0.09) -- (3.34) (3.43)
CAPITAL APPRECIATION FUND
1997(f) $10.00 0.02(h) 1.35 1.37 (0.02) (0.03)(i) (0.06) (0.11)
1998 $11.26 (0.07) 4.44 4.37 -- -- (0.86) (0.86)
EQUITY INCOME FUND
1998(j) $9.99 0.08 1.47 1.55 (0.07) -- -- (0.07)
</TABLE>

(a) Reflects operations for the period from September 22, 1993 (date of initial
public investment) to April 30, 1994. (b) Based on net asset value, which does
not reflect the sales charge or contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above. (e) Reflects operations for the period
from November 29, 1993 (date of initial public investment) to April 30, 1994.
(f) Reflects operations for the period from July 3, 1996 (date of initial public
investment) to April 30, 1997. (g) Represents total commissions paid on
portfolio securities divided by total portfolio shares purchased or sold on
which commissions were charged. This disclosure is required for fiscal years
beginning on or after September 1, 1995. (h) Per share information presented is
based upon the monthly average number of shares outstanding due to large
fluctuations in the number of shares outstanding during the period. (i)
Distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These distributions do not
represent a return of capital for federal tax purposes. (j) Reflects operations
for the period from September 26, 1997 (date of initial public investment) to
April 30, 1998. Further information about the Funds' performance is contained in
the Funds' Annual Report for the fiscal year ended April 30, 1998, which can be
obtained free of charge.

<PAGE>

FINANCIAL HIGHLIGHTS-CONTINUED

RATIOS TO AVERAGE NET ASSETS

NET NET ASSETS,
NET ASSET INVESTMENT EXPENSE END AVERAGE
VALUE, END TOTAL INCOME WAIVER/ OF PERIOD COMMISSION PORTFOLIO
OF PERIOD RETURN(b) EXPENSES (OPERATING LOSS) REIMBURSEMENT(d) (000 OMITTED) RATE PAID(g) TURNOVER

$9.25 (4.23%) 0.00%(c) 6.11%(c) 1.86%(c) $24,468 -- 320%
$9.09 4.59% 0.43% 6.20% 1.01% $29,573 -- 78%
$9.31 8.10% 1.16% 5.41% 0.17% $34,492 -- 132%
$9.28 6.05% 1.11% 6.23% 0.20% $44,485 -- 121%
$9.61 10.42% 1.03% 6.30% 0.09% $53,922 -- 70%
$9.61 (1.22%) 0.00%(c) 4.79%(c) 1.78%(c) $25,225 -- 21%
$9.67 5.58% 0.40% 4.80% 1.12% $27,346 -- 51%
$9.90 7.18% 1.04% 4.60% 0.34% $32,621 -- 113%
$10.08 6.76% 1.01% 4.74% 0.38% $35,480 -- 79%
$10.42 8.37% 0.96% 4.35% 0.31% $43,456 -- 45%
$9.93 (0.12%) 0.00%(c) 2.24%(c) 2.15%(c) $22,944 -- 27%
$10.35 6.61% 0.47% 2.16% 0.96% $39,358 -- 79%
$13.35 30.18% 1.16% 1.09% -- $65,119 -- 77%
$15.11 18.61% 1.14% 0.87% -- $114,090 $0.0549 134%
$16.13 31.40% 1.21% 0.65% -- $143,404 $0.0542 88%
$11.26 13.97% 0.88%(c) 0.18%(c) 0.96%(c) $33,440 $0.0628 41%
$14.77 40.07% 1.50% (0.64%) 0.01% $75,095 $0.0547 86%
$11.47 15.51% 1.08%(c) 1.41%(c) 0.52%(c) $37,403 $0.0707 11%

</TABLE>

<PAGE>

HOW THE FUNDS INVEST

FUND OBJECTIVES AND POLICIES
The investment objective and policies of each Fund appear below. The investment
objective of a Fund cannot be changed without shareholder approval. While a Fund
cannot assure that it will achieve its investment objective, it attempts to do
so by following the investment policies described below.

Unless indicated otherwise, the investment policies of a Fund may be changed by
the Board of Directors ("Directors") without shareholder approval. However,
shareholders will be notified before any material change in these policies
becomes effective. Additional information about investments, investment
limitations and strategies, and certain investment policies appears in the
"Investment Techniques, Features, and Limitations" section of this prospectus.

VISION U.S. GOVERNMENT SECURITIES FUND

Investment Objective
The investment objective of the U.S. Government Securities Fund (referred to in
this section as the "Fund") is current income.

Investment Policies
The Fund pursues its investment objective by investing, under normal market
circumstances, at least 65% of its total assets in a diversified portfolio
consisting of securities that are guaranteed as to payment of principal and
interest by the U.S. government or its agencies or instrumentalities. Capital
appreciation is a secondary, non-fundamental investment consideration. The Fund
anticipates that most of its assets will be invested in fixed income securities
having maturities greater than one year. Certain mortgage-backed securities,
including Adjustable Rate Mortgage Securities ("ARMS") and Collateralized
Mortgage Obligations ("CMOs"), are included within the definition of "U.S.
Government Securities." Depending upon market conditions, the Fund may invest a
substantial portion of its assets in mortgage-backed securities. For a
description of these securities and the following list of Acceptable
Investments, see the "Investment Techniques, Features, and Limitations" section.

Acceptable Investments
The Fund's investments include:

o U.S. government securities;
o mortgage-backed securities that directly or indirectly represent a
participation in, or are secured by and payable from, mortgage loans on
real property;
o asset-backed securities that are similar to mortgage-backed securities, but
have underlying assets that are not mortgage loans or interests in mortgage
loans;
o taxable municipal securities;
o domestic issues of corporate debt obligations, including demand master
notes, rated at the time of purchase Aaa, Aa, or A by Moody's Investors
Service, Inc. ("Moody's"), or AAA, AA, or A by Standard & Poor's ("S&P") or
by Fitch IBCA, Inc. ("Fitch"), or, if unrated, of comparable quality as
determined by the Adviser;
o commercial paper that at the time of purchase is rated not less than P-1,
A-1, or F-1 by Moody's, S&P, or Fitch, respectively, or, if unrated, of
comparable quality as determined by the Adviser;
o securities of other investment companies; and
o money market instruments, including time and savings deposits (including
certificates of deposit) in commercial or savings banks, bankers'
acceptances, and repurchase agreements collateralized by high quality,
liquid investments.

VISION NEW YORK MUNICIPAL INCOME FUND

Investment Objective
The investment objective of the New York Municipal Income Fund (referred to in
this section as the "Fund") is to provide current income which is exempt from
federal regular income tax and the personal income taxes imposed by the State of
New York and New York municipalities and is consistent with the preservation of
capital.

Interest income of the Fund that is exempt from the income taxes described above
retains its exempt status when distributed to the Fund's shareholders. Income
distributed by the Fund may not necessarily be exempt from state or municipal
taxes in states other than New York.

<PAGE>

Investment Policies
The Fund pursues its investment objective by investing primarily in securities,
the interest of which is exempt from federal regular income tax and personal
income taxes imposed by the State of New York and New York municipalities. The
Fund invests in these securities to earn income consistent with the preservation
of capital. Under normal market conditions, at least 80% of the Fund's net
assets will be invested in securities the interest on which is exempt from
federal regular income tax. However, the interest on these securities may be
subject to the federal alternative minimum tax or "AMT." Under normal market
conditions, at least 65% of the value of the Fund's total assets will be
invested in obligations issued by or on behalf of the State of New York, its
political subdivisions or agencies the interest of which is exempt from the
personal income tax imposed by the State of New York and New York
municipalities. For a description of these securities and the following list of
Acceptable Investments, see the "Investment Techniques, Features, and
Limitations" section.

Acceptable Investments
The Fund's investments include:

o obligations issued by or on behalf of the State of New York, its political
subdivisions, or agencies ("New York municipal securities");
o debt obligations of any state, territory, or possession of the United
States, including the District of Columbia, or any political subdivision of
any of these; and
o participation interests, as described below, in any of the above
obligations, the interest from which is, in the opinion of bond counsel for
the issuers or in the opinion of officers of the Corporation or the opinion
of the Adviser, exempt from both federal income tax and the personal income
taxes imposed by the State of New York and New York municipalities.

The Fund also may invest in municipal leases, variable amount demand master
notes, securities of other investment companies, temporary investments and
certain other investments as well as engage in certain investment techniques as
noted in this prospectus.

Maturity
The maturity of debt securities may be considered long (more than 10
years), intermediate (3 to 10 years), or short-term (less than 3 years).
The proportion invested by the Fund in each category can be expected to
vary depending upon the evaluation of market patterns and trends by the
Adviser. However, the Fund anticipates that, under normal circumstances, at
least 65% of its total assets will be invested in fixed income securities
having maturities of greater than one year.

Rating Characteristics
The Fund may buy municipal securities which, at the time of purchase, are
"investment grade," which are one of the top four rating categories of a
nationally recognized statistical rating organization ("NRSRO"). For
example, investment grade bonds are those that are rated Aaa, Aa, A, or Baa
by Moody's, or AAA, AA, A, or BBB by S&P or by Fitch. In certain cases, the
Adviser may purchase securities which are unrated if it determines that
they are of comparable quality to the investment grade securities described
above. If any security purchased by the Fund is subsequently downgraded
below investment grade, the Fund is not required to sell or otherwise
dispose of the security, but may consider doing so. It should be noted that
bonds receiving the lowest of the four investment grade ratings listed
above (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 make principal and interest payments on such bonds
than higher rated bonds. A description of the rating categories is
contained in the Appendix to this Prospectus.

AMT Obligations
Interest on certain private activity municipal bonds issued after August 7,
1986, is a tax preference item for purposes of computing the federal
alternative minimum tax ("AMT"), although interest on these bonds is not
subject to federal income tax. These bonds are referred to as "AMT bonds"
or "AMT obligations". The Fund, in pursuing its investment objectives and
policies, may invest more than 20% of its assets in such AMT obligations.

Temporary Investments
As noted above, under normal circumstances, the Fund invests its assets so
that at least 80% of its net assets are invested in securities that pay
interest exempt from federal regular income tax and at least 65% of its
total assets are invested in securities the interest on which is exempt
from the personal income taxes imposed by the State of New York and New
York municipalities. From time to time, when the Adviser determines that
market conditions call for a temporary defensive posture, the Fund may
invest in short-term non-New York municipal tax-exempt obligations or
taxable temporary investments. These temporary investments include:
obligations issued by or on behalf of municipal or corporate issuers;
obligations issued or guaranteed by the U.S. government, its agencies, or
instrumentalities; money market instruments; commercial paper; certificates
of deposit, bankers' acceptances or other instruments issued by a U.S.
branch of a domestic bank, or savings and loan association with capital,
surplus, and undivided profits in excess of $1 billion at the time of
purchase; shares of other investment companies; repurchase agreements; and
reverse repurchase agreements. Although the Fund is permitted to make
taxable, temporary investments, there is no current intention of generating
income subject to federal regular income tax or personal income taxes
imposed by the State of New York or New York municipalities.

Investment Risks
Yields on New York municipal securities depend on a variety of factors,
including, but not limited to: the general conditions of the short-term
municipal note market and the municipal bond market; the size of the particular
offering; the maturity of the obligations; and the rating of the issue. Further,
any adverse economic conditions or developments affecting the State, counties,
municipalities or City of New York could impact the Fund's portfolio. The
ability of the Fund to achieve its investment objective also depends on the
continuing ability of the issuers of New York municipal securities and
participation interests, or the guarantors of either, to meet their obligations
for the payment of interest and principal when due. Investing in New York
municipal securities which meet the Fund's quality standards may not be possible
if the State, counties, municipalities and City of New York do not maintain
their current credit ratings. An expanded discussion of the current economic
risks associated with the purchase of New York municipal securities is contained
in the SAI.

VISION HIGH YIELD BOND FUND

Investment Objective
The investment objective of the High Yield Bond Fund (referred to in this
section as the "Fund") is to provide high current income. Capital appreciation
is a secondary objective.

Investment Policies
The Fund pursues its investment objective by investing, under normal
circumstances, at least 65% of its total assets in lower-rated, fixed income
securities with a focus on corporate debt obligations.

These corporate debt obligations are generally rated BBB or lower by S&P or Baa
or lower by Moody's, or are not rated but are determined by the Adviser to be of
comparable quality. These obligations have speculative characteristics and are
commonly referred to as junk bonds. (See the "High Yield Securities" for
additional description of these securities, their ratings and associated risks.)
Certain fixed rate obligations in which the Fund invests may involve equity
characteristics. The Fund may, for example, invest in unit offerings that
combine fixed rate securities and common stock or common stock equivalents such
as warrants, rights, and options.

For a description of these securities and the following list of Acceptable
Investments, see the "Investment Techniques, Features, and Limitations" section.

Acceptable Investments The Fund's investments include:

corporate debt obligations, generally rated BBB or Baa and lower (see
"High Yield Securities" below); while the Fund's emphasis will be on
domestic debt obligations, it reserves the flexibility to invest in foreign
debt obligations;
common or preferred stock;
convertible securities;
U.S. government securities;
o money market instruments, including commercial paper, short-term notes,
time and savings deposits (including certificates of deposit) in commercial
or savings banks, bankers' acceptances, and repurchase agreements; and
debt obligations of any state, territory, or possession of the United
States, including the District of Columbia, or any political subdivision of
any of these, so long as they are either (1) rated in one of the four
highest grades by NRSROs or (2) issued by a public housing agency and
backed by the full faith and credit of the United States;
mortgage-backed securities;
o asset-backed securities;
o real estate investment trusts
o securities of other investment companies; and
o warrants.

High Yield Securities
The High Yield Bond Fund has no minimal acceptable rating for a security it
purchases or holds. Lower-rated or unrated bonds are commonly referred to
as high yield securities or junk bonds. Lower-rated securities will offer
higher yields than higher-rated securities, but have more risks because of
reduced creditworthiness and increased risk of default. Lower-rated
securities also tend to have more price volatility and carry more risk to
principal and income than higher-rated securities. Lower-rated securities
tend to reflect short-term corporate and market developments to a greater
extent than higher-rated securities which react primarily to fluctuations
in the general level of interest rates. A description of the rating
categories is contained in the Appendix to this Prospectus.

An economic downturn may adversely affect the value of some lower-rated
bonds. Such a downturn may especially affect highly leveraged companies or
companies in cyclically sensitive industries, where deterioration in a
company's cash flow may impair its ability to meet its obligation to pay
principal and interest to bondholders in a timely fashion. From time to
time, as a result of changing conditions, issuers of lower-rated bonds may
seek or may be required to restructure the terms and conditions of the
securities they have issued. As a result of these restructurings, holders
of lower-rated securities may receive less principal and interest than they
had bargained for at the time such bonds were purchased. In the event of a
restructuring, the Fund may bear additional legal or administrative
expenses in order to maximize recovery from an issuer.

The secondary trading market for lower-rated bonds is generally less liquid
than the secondary trading market for higher-rated bonds. On occasion,
therefore, it may become difficult to price or dispose of a particular
security in the portfolio.

The Fund may, from time to time, own zero coupon bonds or pay-in-kind
securities. A zero coupon bond makes no periodic interest payments and the
entire obligation becomes due only upon maturity. Pay-in-kind securities
make periodic payments in the form of additional securities (as opposed to
cash). The price of zero coupon bonds and pay-in-kind securities are
generally more sensitive to fluctuations in interest rates than are
conventional bonds. Additionally, federal tax law requires that interest on
zero coupon bonds and pay-in-kind securities be reported as income to the
Fund even though the Fund receives no cash interest until the maturity or
payment date of such securities.

Reducing Risks of Lower-Rated Securities
The Adviser will attempt to manage the risks of investing in lower-rated
securities through professional portfolio management techniques. They may
include the following:

Credit Research. The Adviser will perform its own credit analysis in
addition to using NRSROs and other sources, including discussions with the
issuer's management, the judgment of other investment analysts, and its own
informed judgment. The Adviser's credit analysis will consider the issuer's
financial soundness, its responsiveness to changes in interest rates and
business conditions, and its anticipated cash flow, interest or dividend
coverage and earnings.

Diversification. The Fund will invest in securities of many different
issuers, industries, and economic sectors.

Economic Analysis. The Adviser will analyze current developments and trends
in the economy and in the financial markets, giving attention to the timing
and selection of investments as well as the analysis of the business cycle.

VISION MID CAP VALUE FUND

Investment Objective
The investment objective of the Mid Cap Value Fund (referred to in this section
as the "Fund") is to provide long-term growth of capital and income.

Investment Policies
The Fund pursues its investment objective by investing in a diversified
portfolio consisting primarily of equity securities (e.g., common stock,
convertible securities) and debt securities (e.g., bonds, notes). The Adviser
will select equity securities to achieve growth and will select fixed-income,
convertible securities and other interest-paying debt securities to obtain
income. However, either category of equity or debt securities may be purchased
for growth of capital and/or income. The Adviser will invest in companies on the
basis of traditional research techniques, including assessment of the companies'
earnings and dividend growth prospects, sound management techniques, ability to
finance expected growth, and on the basis of a company's undervaluation relative
to other companies in the same industry. These companies may be categorized as
"seasoned" or "well-established" companies, although companies with
less-established operating histories may be chosen for investment if they have
growth elements and present opportunities for income.

Under normal market conditions, at least 65% of the value of the Fund's total
assets will be invested in equity and debt securities that are expected to
produce growth of capital and/or income. However, as a matter of operating
policy, the Adviser intends to invest at least 65% of the Fund's total assets in
equity securities that are expected to produce growth of capital and/or
income.

In selecting investments, the Adviser intends to invest at least 65% of the
Fund's total assets in mid-size (mid-cap) companies that are regarded as
"undervalued." 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 at the time of investment, which could be considered the
mid-capitalization sector of the market.

The Adviser will focus on mid-cap companies because they offer the potential for
greater growth than more conservative, large company stocks, with generally less
volatility than more aggressive, smaller-company stocks. Mid- cap companies are
often beyond the new or emerging phase of their life cycles, yet still are
dynamic enough to be more responsive and adaptive to changing needs than
large-cap companies. As a result, mid-cap companies can offer greater potential
for growth than large-cap companies, yet tend to have less risk than small-cap
companies because of their greater resources, more established organizational
structures and more experienced management. The Adviser also may invest in
large-cap companies and, to a lesser extent, small-cap companies when consistent
with the Fund's investment objective of long-term growth of capital and income.

The Adviser also will focus on companies that are undervalued. A value approach
seeks companies whose stock prices do not appear to reflect their underlying
value as measured by assets, earnings, cash flow, business franchises, or other
quantitative or qualitative measurements. Value stocks may be out of favor with
or misunderstood by investors for a variety of reasons, but are considered to
have inherent value or future prospects that are not currently reflected in
their stock price. Accordingly, value stocks may have a lower price/earnings
ratio and a higher dividend yield than competitors, and thereby offer greater
income and growth potential.

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. For a description of these securities and
the following list of Acceptable Investments, see the "Investment Techniques,
Features, and Limitations" section.

Acceptable Investments
The securities in which the Fund invests include:

o common or preferred stocks of U.S. companies which are either listed on the
New York ("NYSE") or American Stock Exchange ("AMEX"), or other domestic
stock exchange, or are traded in the over-the-counter markets and are
considered by the Adviser to have an established market;
o convertible securities;
o investments in American Depository Receipts ("ADRs") of foreign companies
traded on the NYSE or in the over-the-counter market. The Fund may not
invest more than 25% of its total assets in ADRs. In addition, the Fund may
invest up to 20% of its total assets in other securities of foreign issuers
("Non-ADRs");
o domestic issues of corporate debt obligations (including convertible bonds
and debentures) rated, at the time of purchase, investment grade by a NRSRO
(e.g., Baa or higher by Moody's, or BBB or higher by S&P or Fitch) or, if
unrated, of comparable quality as determined by the Adviser;
o U.S. government securities;
o securities of other investment companies;
o mortgage-backed securities;
o asset-backed securities;
o 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 commercial or savings banks, and bankers'
acceptances; and
o warrants.

<PAGE>

VISION MID CAP GROWTH FUND

Investment Objective
The investment objective of the Mid Cap Growth Fund (referred to in this section
as the "Fund") is to produce long-term capital appreciation.

Investment Policies
The Fund pursues its investment objective 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 (growth). 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. 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 sufficient cash flow to support their growth needs or have sufficient
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. 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 at the time of investment, 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 (growth). At
least 65% of the Fund's total assets will be in mid-capitalization securities
that are regarded as having growth opportunities.

In selecting investments for growth, 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.

For a description of these securities and the following list of Acceptable
Investments, see the "Investment Techniques, Features, and Limitations"
section.

Acceptable Investments
The securities in which the Fund invests include:

o common or preferred stocks of U.S. companies which are either listed on the
NYSE or AMEX, or other domestic stock exchange, or are traded in the
over-the-counter markets and are considered by the Adviser to have an
established market;
o convertible securities;
o investments in 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 may not invest more than 5% of its total assets in
foreign securities other than ADRs;
o domestic issues of corporate debt obligations (including convertible bonds
and debentures) rated, at the time of purchase, investment grade by an
NRSRO (e.g., Baa or higher by Moody's, or BBB or higher by S&P or Fitch),
or, if unrated, of comparable quality as determined by the Adviser;
o U.S. government securities;
o securities of other investment companies;
o for temporary defensive purposes, the Fund may invest 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
o warrants.

<PAGE>

VISION LARGE CAP VALUE FUND

Investment Objective
The investment objective of the Large Cap Value Fund (referred to in this
section as the "Fund") is to provide current income. Capital appreciation is a
secondary, non-fundamental consideration.

Investment Policies
The Fund pursues its investment objective by maintaining a diversified portfolio
consisting primarily of income-producing equity securities of domestic companies
(e.g., common and preferred stocks, convertible securities). The Fund will
attempt to provide a yield greater than the average yield offered by the stocks
of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index")
and a lower level of price volatility, although there is no assurance that it
will be able to do so. The Adviser will invest in companies on the basis of
traditional research techniques, including assessment of a company's earnings
and dividend growth prospects, risk/volatility of the company's industry, sound
management techniques, ability to finance expected growth, and on the basis of a
company's undervaluation relative to other companies in the same industry. These
companies may be categorized as "seasoned" or "well-established" companies,
although companies with less-established operating histories may be chosen for
investment if they present opportunities for income and capital appreciation.

Under normal market conditions, the Fund intends to invest at least 65% of the
value of its total assets in equity securities that are expected to produce
current income. The Fund will also consider to a lesser extent whether the
securities offer the opportunity for capital appreciation. In selecting
investments, the Adviser intends to invest at least 65% of the Fund's total
assets in large capitalization ("large-cap") companies which are those companies
with a market capitalization of at least $10 billion or more at the time of
investment and which are regarded as "undervalued". The Adviser also may invest,
to a lesser extent, in medium capitalization ("mid-cap") or small-capitalization
("small-cap") companies which are generally companies with a market
capitalization under $10 billion. 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.

While equity securities of large-cap companies are generally less volatile than
those of more aggressive mid-to-small cap companies, they may also offer less
potential for high growth. However, large-cap companies generally offer more
potential for income than mid-cap and small-cap stocks because they provide a
history of dividends that may help reduce the effects of broader stock price
changes. Furthermore, large-cap companies are often beyond the new or emerging
phase of their life cycles, yet still may be dynamic enough to be responsive and
adaptive to changing needs. Large-cap companies can also offer potential for
growth yet tend to have less risk than small-cap companies because of their
greater resources, more established organizational structures and more
experienced management.

The Adviser also will focus on stocks of companies with unrecognized or
undervalued assets. Such a value approach seeks companies whose stock prices do
not appear to reflect their underlying value as measured by assets, earnings,
cash flow, business franchises, or other quantitative or qualitative
measurements. Value stocks may be out of favor with or misunderstood by
investors for a variety of reasons, but are considered to have inherent value or
future prospects that are not currently reflected in their stock price.
Accordingly, value stocks may have a price/ earnings ratio less than the S&P 500
Index, lower than average price to book value, and higher than average dividend
yields than competitors, and thereby offer greater income and growth potential.

The Fund may also seek income by investing up to 35% of the value of its total
assets in debt obligations.

For a description of these securities and the following list of Acceptable
Investments, see the "Investment Techniques, Features, and Limitations" section.

Acceptable Investments
The securities in which the Fund invests include:

o common or preferred stocks of U.S. companies which are either listed on the
NYSE or AMEX or other domestic stock exchange or are traded in the over-
the-counter markets;

o convertible securities;

o investments in ADRs of foreign companies traded on the NYSE or AMEX or
other domestic stock exchange or in the over-the-counter market. The Fund
may not invest more than 25% of its total assets in ADRs. In addition, the
Fund may invest up to 20% of its total assets in other securities of
foreign issuers, which may include securities traded on the NYSE, AMEX or
other domestic stock exchanges ("Non-ADRs");

o corporate debt obligations (including convertible bonds and debentures)
rated, at the time of purchase, investment grade by an NRSRO (e.g., Baa or
higher by Moody's, or BBB or higher by S&P or Fitch) or, if unrated, of
comparable quality as determined by the Adviser;

o U.S. government securities;
o securities of other investment companies;
o mortgage-backed securities;
o asset-backed securities;
o for temporary defensive purposes, the Fund may invest up to 35% 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 or foreign commercial or savings
banks, and bankers' acceptances;
o warrants;
o futures contracts; and
o options.

VISION LARGE CAP GROWTH FUND

Investment Objective
The investment objective of the Large Cap Growth Fund (referred to in this
section as the "Fund") is to provide capital appreciation.

Investment Policies
Under normal market conditions, the Fund intends to invest at least 65% of the
value of its total assets in large-cap equity securities that are expected to
produce growth or capital appreciation. The Fund will also consider to a lesser
extent whether the securities offer the opportunity for current income.

The Fund pursues its objective by investing in equity securities, primarily
common stocks, of the largest growth companies traded in the U.S. stock markets.
The Fund's portfolio will hold between 40 and 75 stocks, and the primary
universe for individual stock selection will be the S&P 500 Index. It is
anticipated that the Fund will maintain positions in many of the stocks
representing the largest holdings within the S&P 500 Index and S&P Barra Growth
Index. The Fund will attempt to be invested across all the major economic
sectors as defined by the S&P 500 Index. It is expected that the Fund, as a
whole, will have the overall portfolio characteristics that define it as a
"large cap growth." Large capitalization companies have a market capitalization
of $10 billion or more at the time of investment. The Adviser also may invest,
to a lesser extent, in mid-cap or small-cap companies which are generally
companies with a market capitalization under $10 billion. In selecting portfolio
investments, the Adviser will analyze each company's fundamentals with an
emphasis on factors pertaining to growth. Portfolio securities will be sold when
the Adviser determines they no longer meet the Fund's objective, are removed
from the S&P 500 Index, or if the Adviser determines that there is a better
investment opportunity in other stocks.

The Fund will employ tax management techniques which are designed to minimize
capital gains distributions while maximizing after-tax returns. For example, the
Fund will generally buy securities that it intends to hold over the long term,
and avoid short-term trading. In deciding which securities to sell, the Fund's
Adviser will consider their capital gain or loss situation, and may attempt to
offset capital gains by selling securities that have gone down in value or that
have the highest cost basis. Also, the Adviser generally will consider selling
any security that has not met its expectations for growth, in which case the
capital gain would be relatively small. Successful application of this strategy
will result in shareholders incurring capital gains when they sell their Shares.

For a description of these securities and the following list of Acceptable
Investments, see the "Investment Techniques, Features, and Limitations" section.

<PAGE>

Acceptable Investments
The securities in which the Fund invests include:

o common or preferred stocks of U.S. companies which are either listed on the
NYSE or AMEX or other domestic stock exchange or are traded in the
over-the-counter markets;
o convertible securities;
o securities (including ADRs) of foreign companies traded on the NYSE or AMEX
or other domestic stock exchange or in the over-the-counter market;
o corporate debt obligations (including convertible bonds and debentures)
rated, at the time of purchase, investment grade by an NRSRO (e.g., Baa or
higher by Moody's, or BBB or higher by S&P or Fitch) or, if unrated, of
comparable quality as determined by the Adviser;
o U.S. government securities;
o securities of other investment companies;
o mortgage-backed securities;
o asset-backed securities;
o for temporary defensive purposes, the Fund may invest up to 35% 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 or foreign commercial or savings
banks, and bankers' acceptances;
o warrants;
o futures contracts; and
o options.

INVESTMENT TECHNIQUES, FEATURES, AND LIMITATIONS

EQUITY SECURITIES
The Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large Cap
Growth Fund (and to a lesser extent, the High Yield Bond Fund) may invest in
equity securities, which represent a share of an issuer's earnings and assets,
after the issuer pays its liabilities. The Fund cannot predict the income it
will receive from equity securities because issuers generally have discretion as
to the payment of any dividends or distributions. However, equity securities
offer greater potential for appreciation than many other types of securities,
because their value increases directly with the value of the issuer's business.

Common Stocks
Common stocks are the most prevalent type of equity security. Common stocks
receive the issuer's earnings after the issuer pays its creditors and any
preferred stockholders. As a result, changes in an issuer's earnings directly
influence the value of its common stock.

Preferred Stocks
Preferred stocks have the right to receive specified dividends or distributions
before the issuer makes payments on its common stock. Some preferred stocks also
participate in dividends and distributions paid on common stock. Preferred
stocks may also permit the issuer to redeem the stock.

Real Estate Investment Trusts (REITs)
REITs are real estate investment trusts that lease, operate and finance
commercial real estate. Risks associated with REITs include the fact that equity
and mortgage REITs are dependent upon management skill and are not diversified
and are, therefore, subject to the risk of financing single projects or
unlimited number of projects. They are also subject to heavy cash flow
dependency, defaults of borrowers and self-liquidation. Additional, equity REITs
may be affected by any changes in the value of the underlying property owned by
the REITs and mortgage REITs may be affected by the quality of any credit
extended. REITs are exempt from federal corporate income tax if they limit their
operations and distribute most of their income. Such tax requirements limit a
REIT's ability to respond to changes in the commercial real estate market.

<PAGE>

Warrants
Warrants are an option to buy the issuer's equity securities at a specified
(exercise) price at a specified future (expiration) date. If warrants are not
exercised before such date (for example, because the stock price does not rise
above the specified exercise price), the warrants become worthless. The High
Yield Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund
and Large Cap Growth Fund may each purchase warrants, but none of these Funds
except High Yield Bond Fund and Mid Cap Growth Fund has a present intent to
invest more than 5% of its net assets in warrants.

DEPOSITARY RECEIPTS
The Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large Cap
Growth Fund may invest in depositary receipts, which represent interests in
underlying securities issued by a foreign company. Depositary receipts are not
traded in the same market as the underlying security. The foreign securities
underlying American Depositary Receipts ("ADRs") are traded in the United
States. ADRs provide a way to buy shares of foreign-based companies in the
United States rather than in overseas markets. ADRs are also traded in U.S.
dollars, eliminating the need for foreign exchange transactions. Depositary
Receipts involve many of the same risks of investing directly in foreign
securities.

CONVERTIBLE SECURITIES
The High Yield Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap
Value Fund and Large Cap Growth Fund may invest in convertible securities.
Convertible securities include a spectrum of securities which can be exchanged
for or converted into common stock. Convertible securities may include, but are
not limited to: convertible bonds or debentures; convertible preferred stock;
units consisting of usable bonds and warrants; or securities which cap or
otherwise limit returns to the convertible security holder.

A 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 Funds may hold or
trade convertible securities. In selecting convertible securities for the Funds,
the Adviser evaluates the investment characteristics of the convertible security
as a fixed income instrument, and the investment potential of the underlying
equity security for capital appreciation. 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 conditions that affect
the issuer's profits, and the issuer's management capability and practices.

Convertible securities may be rated below investment grade or are not rated at
all because they generally are junior to debt obligations but senior to common
equity securities in terms of priority of payments from, or rights to assets of,
the issuer. Convertible securities rated below investment grade may be subject
to some of the same risks as those inherent in junk bonds.

The High Yield Bond Fund does not limit convertible securities by rating, and
there is no minimal acceptance rating for a convertible security to be purchased
or held by this Fund. Therefore, this Fund may invest in convertible securities
irrespective of their ratings. (See "High Yield Securities" below.)

CORPORATE DEBT OBLIGATIONS
The Funds may invest in corporate debt obligations, including corporate bonds,
notes, and debentures, which may have floating or fixed rates of interest. In
the case of an investment by the U.S. Government Securities Fund, these
obligations will be rated by an NRSRO at the time of purchase in the top three
rating categories. In the case of an investment by any of the other Funds except
the High Yield Bond Fund, these investments will be in the top four rating
categories (investment grade). There is no minimum rating requirement applicable
to corporate debt obligations purchased by High Yield Bond Fund. If the
obligations are unrated, they will be of comparable quality to the rated
obligations permissible for purchase, as determined by the Adviser. If any
security purchased by a Fund is subsequently downgraded, the Adviser will
evaluate the security and determine, on a case by case basis, 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) has
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to pay principal
and interest payments on these obligations compared to higher rated obligations.
A description of the rating categories is contained in the Appendix to this
Prospectus.

The interest rate paid by an outstanding debt obligation affects its value to
investors. If market rates of interest rise after a debt obligation is issued,
that outstanding debt obligation will not be as attractive to investors as a
newly issued, higher-paying security, and an investor may only be willing to buy
the outstanding obligation if it is sold at a discount. Conversely, if market
rates of interest fall, the market price of that outstanding debt obligation may
rise. Generally, the amount of change in the market price of debt obligations in
response to changes in market rates of interest depends on
the maturity of the debt obligation; debt obligations with the longest
maturities generally experience the greatest market price changes. Many
corporate debt obligations, including many lower-rated bonds, permit the
issuers to call the security and thereby redeem their obligations earlier
than the stated maturity dates. Issuers are more likely to call bonds
during periods of declining interest rates. In these cases, if a Fund
owns a bond which is called, the Fund will receive its return of principal
earlier than expected and would likely have to reinvest the
proceeds at lower interest rates, thus reducing income to the Fund.

Fixed Rate Corporate Debt Obligations
The Funds 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 of the expectation that they will be called or
redeemed within a short period of time. A fixed rate security with short-term
characteristics would include a fixed income security priced close to the price
at which it may be called by the issuer for redemption or a fixed income
security approaching maturity. 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 the rate of interest paid by
floating rate securities is subject to periodic adjustments based on a
designated interest rate index. 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 Funds 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) by or based on a specified interest rate index 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,
commercial paper rates, or the longer-term rates on U.S. Treasury securities.

Variable Rate Demand Notes
All of the Funds except Mid Cap Growth Fund may purchase variable rate demand
notes, which are long-term corporate debt instruments that have variable or
floating interest rates and provide the Funds with the right to tender the
security for repurchase at its stated principal amount plus accrued interest.
Such securities typically bear interest at a rate that is intended to cause the
securities to trade at par. The interest rate may float or be adjusted at
regular intervals (ranging from daily to annually), and is normally based on a
published interest rate or interest rate index. Many variable rate demand notes
allow the Funds to demand the repurchase of the security on not more than seven
days' prior notice. Other notes only permit the Funds to tender the security at
the time of each interest rate adjustment or at other fixed intervals.

ZERO COUPON BONDS
The U.S. Government Securities Fund, New York Municipal Income Fund, High Yield
Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund, and
Large Cap Growth Fund may invest in zero coupon bonds, which are debt securities
issued at a discount to their face amount and do not entitle the holder to any
periodic payments of interest prior to maturity.

U.S. GOVERNMENT SECURITIES
The Funds may invest in U.S. government securities which include:

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

o notes, bonds, and discount notes issued or guaranteed by U.S. government
agencies and instrumentalities supported by the full faith and credit of
the United States;

o notes, bonds, and discount notes of U.S. government agencies or
instrumentalities which receive or have access to federal funding; and

o notes, bonds, and discount notes of other U.S. government instrumentalities
supported by the credit of the instrumentalities.

Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government 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:

o the issuer's right to borrow an amount limited to a specific line of credit
from the U.S. Treasury; o the discretionary authority of the U.S. government to
purchase certain obligations of an agency or instrumentality; or o the credit of
the agency or instrumentality.

MORTGAGE-BACKED SECURITIES
The U.S. Government Securities Fund, High Yield Bond Fund, Mid Cap Value Fund,
Large Cap Value Fund and Large Cap Growth Fund may invest in mortgage-backed
securities which are securities that directly or indirectly represent a
participation in, or are secured by and payable from, mortgage loans on real
property. There are currently three basic types of mortgage-backed securities
that the Funds may purchase: (i) those issued or guaranteed by the U.S.
government or one of its agencies or instrumentalities, such as Government
National Mortgage Association ("Ginnie Mae"), Federal National Mortgage
Association ("Fannie Mae"), and Federal Home Loan Mortgage Corporation ("Freddie
Mac"); (ii) those issued by private issuers that represent an interest in or are
collateralized by mortgage-backed securities issued or guaranteed by the U.S.
government or one of its agencies or instrumentalities; and (iii) those issued
by private issuers that represent an interest in or are collateralized by whole
loans or mortgage-backed securities without a government guarantee but usually
having some form of private credit enhancement. The U.S. Government Securities
Fund and High Yield Bond Fund may also purchase privately issued securities
which are collateralized by pools of mortgages in which each mortgage is
guaranteed as to payment of principal and interest by an agency or
instrumentality of the U.S. government.

The privately issued mortgage-backed securities provide for a periodic payment
consisting of both interest and/or principal. The interest portion of these
payments will be distributed by the Funds as income, and the capital portion
will be reinvested. See "Risks of Mortgage-Backed Securities" below for a
description of risks.

Mortgage-related securities provide for a periodic payment consisting of both
interest and principal. The interest portion of these payments will be
distributed by the Funds as income, and the capital portion will be reinvested.

Adjustable Rate Mortgage Securities ("ARMs")
ARMS are pass-through mortgage securities representing interests in adjustable
rather than fixed interest rate mortgages. The ARMS in which the U.S. Government
Securities Fund, High Yield Bond Fund, Mid Cap Value Fund, Large Cap Value Fund
and Large Cap Growth Fund may invest are issued by Ginnie Mae, Fannie Mae, or
Freddie Mac, and are actively traded. The underlying mortgages which
collateralize ARMS issued by Ginnie Mae are fully guaranteed by the Federal
Housing Administration or Veterans Administration, while those collateralizing
ARMS issued by Fannie Mae or Freddie Mac are typically conventional residential
mortgages conforming to strict underwriting size and maturity constraints. ARMS
may also be collateralized by whole loans or private pass-through
securities.

Not unlike other fixed-income securities, the market value of ARMS will
generally vary inversely with changes in market interest rates. Thus, the market
value of ARMS generally declines when interest rates rise and generally rises
when interest rates decline.

While ARMS generally entail less risk of a decline during periods of rapidly
rising rates, ARMS may also have less potential for capital appreciation than
other similar investments (e.g., investments with comparable maturities)
because, as interest rates decline, the likelihood increases that mortgages will
be prepaid.

Collateralized Mortgage Obligations ("CMOs")
CMOs are debt obligations collateralized by mortgage loans or mortgage
pass-through securities. Typically, CMOs are collateralized by Ginnie Mae,
Fannie Mae or Freddie Mac certificates, but may be collateralized by whole loans
or private pass-through securities.

The U.S. Government Securities Fund, Mid Cap Value Fund, Large Cap Value Fund
and Large Cap Growth Fund will only invest in CMOs which, at the time of
purchase, are rated AAA by an NRSRO or are of comparable quality as determined
by the Adviser, and which may be: (i) collateralized by pools of mortgages in
which each mortgage is guaranteed as to payment of principal and interest by an
agency or instrumentality of the U.S. government; (ii) collateralized by pools
of mortgages in which payment of principal and interest is guaranteed by the
issuer and such guarantee is collateralized by U.S. government securities; or
(iii) collateralized by pools of mortgages without a U.S. government guarantee
as to payment of principal and interest, but which have some form of credit
enhancement.

Real Estate Mortgage Investment Conduits ("REMICs")
The U.S. Government Securities Fund, High Yield Bond Fund, Mid Cap Value Fund,
Large Cap Value Fund and Large Cap Growth Fund may invest in REMICs. REMICs are
offerings of multiple class real estate mortgage-backed securities which qualify
and elect REMIC treatment as such under provisions of the Internal Revenue Code.
Issuers of REMICs may take several forms, such as trusts, partnerships,
corporations, associations, or segregated pools of mortgages. Once REMIC status
is elected and obtained, the entity is not subject to federal income taxation.
Instead, income is passed through the entity and is taxed to the person or
persons who hold interests in the REMIC. A REMIC interest must consist of one or
more classes of "regular interest." To qualify as a REMIC, substantially all the
assets of the entity must be in assets directly or indirectly secured
principally by real property.

Risks Of Mortgage-Backed Securities
Mortgage-backed securities (including ARMS, CMOs, and REMICs) and asset-backed
securities (described below) generally pay back principal and interest over the
life of the security. At times when market rates of interest are falling, debt
obligations underlying mortgage-backed and asset- backed securities may be
prepaid by borrowers who are refinancing their debts at the lower current rate.
Prepayments of debt obligations underlying mortgage-backed and asset-backed
securities in which the Fund has invested results in a sooner-than anticipated
return of principal to the Fund. There is a risk that, when a Fund reinvests
these prepayments of principal, the new investments may not pay as high a rate
of interest as the Fund had been earning on the original investment before it
was prepaid. This is referred to as "prepayment risk." Mortgage-backed and
asset-backed securities are subject to higher prepayment risks than most other
types of debt instruments with prepayment risks because the underlying mortgage
loans or the collateral supporting asset-backed securities may be prepaid
without penalty or premium. Prepayment risks on mortgage-backed securities tend
to increase during periods of declining mortgage interest rates because many
borrowers refinance their mortgages to take advantage of the more favorable
rates. Prepayments on mortgage-backed securities are also affected by other
factors, such as the frequency with which people sell their homes or elect to
make unscheduled payments on their mortgages. Although asset-backed securities
generally are less likely to experience substantial prepayments than are
mortgage-backed securities, certain of the factors that affect the rate of
prepayments on mortgage-backed securities also affect the rate of prepayments on
asset-backed securities. Furthermore, if mortgage-backed securities are
purchased at a premium, mortgage foreclosures and unscheduled principal payments
may result in some loss of a holder's principal investment to the extent of the
premium paid. Conversely, if mortgage-backed securities are purchased at a
discount, both a scheduled payment of principal and an unscheduled prepayment of
principal would increase current and total returns and would accelerate the
recognition of income, which would be taxed as ordinary income when distributed
to shareholders.

As a consequence, mortgage-backed securities may be a less effective means of
"locking in" long-term interest rates than other types of fixed-income
securities.

ASSET-BACKED SECURITIES
The U.S. Government Securities Fund, High Yield Bond Fund, Mid Cap Growth Fund,
Mid Cap Value Fund, Large Cap Value Fund and Large Cap Growth Fund may invest in
asset-backed securities which have structural characteristics similar to
mortgage-backed securities but have underlying assets that are not mortgage
loans or interests in mortgage loans. The U.S. Government Securities Fund, Large
Cap Value Fund and Large Cap Growth Fund may invest in asset-backed securities
which, at the time of purchase, are rated in the top three rating categories by
an NRSRO, and the Mid Cap Growth Fund and Mid Cap Value Fund may invest in
asset-backed securities which, at the time of purchase, are rated in the top
four rating categories (investment grade ) by an NRSRO, including, but not
limited to, interests in pools of receivables, such as motor vehicle installment
purchase obligations and credit card receivables. These securities may be in the
form of pass-through instruments or asset-backed bonds. The securities are
issued by non-governmental entities and carry no direct or indirect government
guarantee.

Risks Of Asset-Backed Securities
Asset-backed securities present certain additional risks that are not presented
by mortgage-backed securities, as described above. Primarily, asset-backed
securities do not have the benefit of the same security interest in the related
collateral. Credit card receivables are generally unsecured and the debtors are
entitled to the protection of a number of state and federal consumer credit
laws, many of which give such debtors the right to set off certain amounts owed
on the credit cards, thereby reducing the balance due. Most issuers of
asset-backed securities backed by motor vehicle installment purchase obligations
(e.g., automobile loans) permit the entity servicing the obligations to retain
possession of the underlying notes. If the servicer sells these notes to another
party there is a risk that the purchaser would acquire an interest superior to
that of the holders of the related asset-backed securities. Further, if a
vehicle is registered in one state and is then reregistered because the owner
moves to another state, such reregistration could defeat the original security
interest in the vehicle in certain cases. In addition, because of the large
number of vehicles involved in a typical asset- backed security issue and
technical requirements under state laws, the trustee for the holders of
asset-backed securities backed by automobile receivables may not have a proper
security interest in all of the obligations backing such receivables. Therefore,
there is the possibility that recoveries on repossessed collateral may not, in
some cases, be available to support payments on these securities.

<PAGE>

MUNICIPAL SECURITIES
The U.S. Government Securities Fund and High Yield Bond Fund may invest in
taxable municipal securities and the New York Municipal Income Fund will
purchase New York municipal securities. Both types of municipal securities are
generally issued to finance public works such as airports, bridges, highways,
housing, hospitals, mass transportation projects, schools, streets, and water
and sewer works. They are also issued to repay outstanding obligations, to raise
funds for general operating expenses, and to make loans to other public
institutions and facilities.

Municipal securities include industrial development bonds issued by or on behalf
of public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The availability
of this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment.

The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.

Yields on taxable municipal securities depend on a variety of factors,
including: the general conditions of the short-term municipal note market and of
the municipal bond market; the size of the particular offering; the maturity of
the obligations; and the rating of the issue. The ability of the Funds to
achieve their respective investment objectives also may depend on the continuing
ability of the issuers of municipal securities and demand features, or the
credit enhancers of either, to meet their obligations for the payment of
interest and principal when due.

Moral Obligation Bonds
Moral obligation bonds are normally issued by special purpose authorities. If an
issuer of a moral obligation bond is unable to meet its interest and principal
payments from current revenues, it may draw on a reserve fund. The state or
municipality that created the issuer has given a moral pledge to appropriate
funds to replenish the reserve fund. But that pledge is only a moral commitment,
not a legal obligation of the state or municipality.

Participation Interests
The New York Municipal Income Fund and High Yield Bond Fund may purchase
participation interests from financial institutions such as commercial banks,
savings and loan associations, and insurance companies. These participation
interests give the Fund an undivided interest in municipal securities. The
financial institutions from which the Fund purchases participation interests
frequently provide or secure irrevocable letters of credit or guarantees to
assure that the participation interests are of high quality. The Directors of
the Corporation or, pursuant to delegated authority, the Adviser, will determine
whether participation interests meet the prescribed quality standards for the
Fund.

Variable Rate Municipal Securities
Some of the municipal securities which the New York Municipal Income Fund and
High Yield Bond Fund purchase may have variable interest rates. Variable
interest rates are ordinarily based on a published interest rate, interest rate
index or a similar standard, such as the 91-day U.S. Treasury bill rate. Many
variable rate municipal securities are subject to payment of principal on demand
by the Fund in not more than seven days. All variable rate municipal securities
will meet the quality standards described above. The Adviser has been instructed
by the Corporation's Directors to monitor the pricing, quality, and liquidity of
the variable rate municipal securities, including participation interests held
by the Fund, on the basis of published financial information and reports of the
rating agencies and other analytical services.

Municipal Leases
The New York Municipal Income Fund and High Yield Bond Fund may purchase
municipal leases, which are obligations issued by state and local governments or
authorities to finance the acquisition of equipment and facilities and, in some
cases, may be illiquid. They may take the form of a lease, an installment
purchase contract, a conditional sales contract or a participation certificate
in any of the above.

Variable Amount Demand Master Notes
The New York Municipal Income Fund and High Yield Bond Fund are able to purchase
variable amount demand master notes. Variable amount demand master notes
represent a borrowing arrangement between an issuer (borrower) and an
institutional lender such as the Fund (lender). These notes are payable upon
demand. The lender typically has the right to increase the amount under the note
at any time up to the full amount provided by the note agreement. Both the
lender and the borrower have the right to reduce the amount of outstanding
indebtedness at any time. In some instances, however, the lender and the
borrower may agree that the amount of outstanding indebtedness remain fixed.
Variable amount demand master notes provide that the interest rate on the amount
outstanding varies depending upon a stated short-term interest rate index.

Municipal Bond Insurance
The New York Municipal Income Fund may purchase municipal securities covered by
insurance which guarantees the timely payment of principal at maturity and
interest on such securities. These insured municipal securities are either (1)
covered by an insurance policy applicable to a particular security, which is
either obtained by the issuer of the security or by a third party
("Issuer-Obtained Insurance") or (2) insured under master insurance policies
issued by municipal bond insurers, which may be purchased by the Fund (the
"Policies").

The New York Municipal Income Fund will obtain municipal bond insurance when
purchasing municipal securities which would not otherwise meet the Fund's
quality standards. The Fund may also obtain municipal bond insurance when, in
the opinion of the Adviser, such insurance would benefit the Fund, for example,
through improvement of portfolio quality or increased liquidity of certain
securities. The Adviser anticipates that not more than 50% of the Fund's net
assets will be invested in municipal securities which are insured.
Issuer-Obtained Insurance Policies are non-cancellable and continue in force as
long as the municipal securities are outstanding and their respective insurers
remain in business. If a municipal security is covered by Issuer-Obtained
Insurance, then such security need not be insured by the Policies purchased by
the Fund.

The New York Municipal Income Fund may purchase two types of Policies issued by
municipal bond insurers. One type of Policy covers certain municipal securities
only during the period in which they are in the Fund's portfolio. In the event
that a municipal security covered by such a Policy is sold from the Fund, the
insurer of the relevant Policy will be liable only for those payments of
interest and principal which are then due and owing at the time of sale.

The other type of Policy covers municipal securities not only while they remain
in the Fund's portfolio but also until their final maturity even if they are
sold out of the Fund's portfolio, so that the coverage may benefit all
subsequent holders of those municipal securities. The Fund will obtain insurance
which covers municipal securities until final maturity even after they are sold
out of the Fund's portfolio only if, in the judgment of the Adviser, the Fund
would expect to receive net proceeds from the sale of those securities, after
deducting the cost of such permanent insurance and related fees, significantly
in excess of the proceeds it would expect to receive if such municipal
securities were sold without insurance.

Payments received from municipal bond insurers may not be tax-exempt income to
shareholders of the Fund.

SECURITIES OF FOREIGN ISSUERS
The High Yield Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap
Value Fund and Large Cap Growth Fund may invest in U.S. dollar-denominated and
foreign currency denominated securities of foreign issuers. There may be certain
risks associated with investing in foreign securities. These include risks of
adverse political and economic developments (including possible governmental
seizure or nationalization of assets), the possible imposition of exchange
controls or other governmental restrictions, currency fluctuations, less
uniformity in accounting and reporting requirements, higher transaction costs
and the possibility that there will be less information on such securities and
their issuers available to the public. In addition, there are restrictions on
foreign investments in other jurisdictions and there tends to be difficulty in
obtaining judgments from abroad and effecting repatriation of capital invested
abroad. Delays could occur in settlement of foreign transactions, which could
adversely affect shareholder equity. Foreign securities may be subject to
foreign taxes, which reduce yield, and may be less marketable than comparable
United States securities. To the extent that securities purchased by the Funds
are denominated in currencies other than the U.S. dollar, changes in foreign
currency exchange rates will affect a Fund's net asset value; the value of any
interest earned, gains and losses realized on the sale of securities; and net
investment income and capital gain, if any, to be distributed to shareholders by
a Fund. If the value of a foreign currency rises in comparison to the U.S.
dollar, the value of a Fund's assets denominated in that currency will increase;
correspondingly, if the value of a foreign currency declines in comparison to
the U.S. dollar, the value of a Fund's assets in that currency will decrease. As
a matter of practice, the Funds will not invest in the securities of a foreign
issuer if any risk identified above appears to the Adviser to be substantial.

REPURCHASE AGREEMENTS
Each of the Funds 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 Funds
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 a Fund, the Fund could receive less than the repurchase price on
any sale of such securities.

<PAGE>

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
Each of the Funds may purchase securities on a when-issued or delayed delivery
basis. These transactions are arrangements in which a Fund purchases securities
with payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause a 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. The Funds may dispose of a commitment prior to
settlement if the Adviser deems it appropriate to do so. In addition, a 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 Funds may realize short-term profits or
losses upon the sale of such commitments.

ILLIQUID AND RESTRICTED SECURITIES
Each of the Funds may invest in restricted securities. Restricted securities are
any securities in which the Fund may invest pursuant to its investment objective
and policies but which are subject to restrictions on resale under federal
securities law. Under criteria established by the Directors, certain restricted
securities are determined to be liquid. To the extent that restricted securities
are not determined to be liquid, each Fund will limit its purchase, together
with other illiquid securities including non-negotiable time deposits and
repurchase agreements providing for settlement in more than seven days after
notice, to 15% of its net assets.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
Each of the Funds may invest its assets in securities of other investment
companies as an efficient means of carrying out its investment policies. It
should be noted that investment companies incur certain expenses, such as
management fees, and, therefore, any investment by a Fund in shares of other
investment companies may be subject to such duplicate expenses.

LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, each of the Funds 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. A 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 Directors and will receive
collateral in the form of cash, U.S. government securities or other liquid
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
Each of the Funds may also enter into reverse repurchase agreements. This
transaction is similar to borrowing cash.

DIVERSIFICATION
Each of the Funds (except the New York Municipal Income Fund) is a "diversified"
investment company under the Investment Company Act of 1940 and Internal Revenue
Code of 1986. This means that with respect to 75% of its total assets, the Fund
may not invest more than 5% of its total assets in the securities of any one
issuer (except U.S. government obligations). The balance of the Fund's assets is
not subject to this limitation. The Fund may invest up to 25% of its total
assets in the securities of any one issuer. The New York Municipal Income Fund
is a "non-diversified" investment company under the Investment Company Act of
1940 and intends to qualify as a regulated investment company under the Internal
Revenue Code of 1986. In order to do so, with respect to 50% of its total
assets, the Fund may not invest more than 5% of its total assets in the
securities of any one issuer (except U.S. government obligations). The balance
of the Fund's assets is not subject to this limitation. However, under the
Internal Revenue Code, a regulated investment company at the close of each
quarter of the taxable year may not hold more than 25% of its assets in
securities of any one issuer (other than U.S. government securities or the
securities of other regulated investment companies). Thus, the New York
Municipal Income Fund may invest up to 25% of its total assets in the securities
of any two issuers. An investment in the Fund, therefore, will entail greater
risk than would exist in a diversified portfolio of securities because the
higher percentage of investments among fewer issuers may result in greater
fluctuation in the total market values of the Fund's portfolio. Any economic,
political, or regulatory developments affecting the value of any of the
securities in the Fund's portfolio will have a greater impact on the total value
of the portfolio than would be the case if the portfolio were diversified among
more issuers.

<PAGE>

SHORT SALES
The Funds may sell securities short from time to time, subject to certain
restrictions. A short sale occurs when the Fund sells a security it does not own
in anticipation of a decline in the price of that security. If the decline
occurs, the Fund can purchase at a lower price shares equal in number to those
sold short. If the price increases, the Fund must pay the higher price. The
purchased shares are then returned to the original lender. Risk arises because
no loss limit can be placed on the transaction. When a Fund enters into a short
sale, assets that are equal to the market price of the securities sold short or
any lesser price at which the Fund can obtain such securities, are segregated on
the Fund's records and maintained until the Fund meets its obligations under the
short sale. No Fund will sell securities short unless (1) it owns, or has a
right to acquire, an equal amount of such securities, or (2) it has segregated
an amount of its other liquid assets equal to the lesser of the market value of
the securities sold short or the amount required to acquire such securities. The
segregated amount will not exceed 25% of each Fund's net assets. While in a
short position, the Fund will retain the securities, rights, or segregated
assets.

PUT AND CALL OPTIONS
Each of the Funds may purchase put options on its portfolio securities. These
options will be used as a hedge to attempt to protect securities which the Fund
holds against fluctuations in value. Each of the Funds may also write put and
call options on all or any portion of its portfolio securities to generate
income. A Fund will write put and call options on securities either held in its
portfolio or which it has the right to obtain without payment of further
consideration or which it has segregated cash in the amount of any additional
consideration. Each of the Funds also may purchase call options on securities to
protect against price movements in particular securities which a Fund intends to
purchase. The Fund pays a premium to acquire a call option, which gives the Fund
the right (but not the obligation) to buy the underlying security from the
seller at a pre-determined price. The Funds 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 Funds purchase
and write 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 a Fund does not exercise an option it has purchased, then the Fund loses in
value the price it paid for the option. 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
Each of the Funds may purchase and sell financial futures, and the Mid Cap Value
Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large Cap Growth Fund may
each purchase and sell stock index futures contracts. These transactions are
used by a Fund 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.

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

Generally, a Fund may not purchase or sell futures contracts or related options
for other than bona fide hedging purposes 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 net assets, after taking into account the unrealized profits and losses
on those contracts it has entered into. In the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
computing such 5%. When a 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 Of Futures And Options
When a 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 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. A Fund's ability
to establish and close out futures and options positions depends on this
secondary market.

DEBT RISKS
In the debt market, 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 a
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 changes. Although debt obligations with longer
maturities offer potentially greater returns, they have greater exposure to
market price fluctuation. Consequently, to the extent a Fund is significantly
invested in debt obligations with longer maturities, there is a greater
possibility of fluctuation in the Fund's net asset value. However, the Adviser
will attempt to minimize the fluctuation of the Fund's net asset value by
anticipating the direction of interest rates changes and modifying investments
accordingly.

EQUITY RISKS
As with other mutual funds that invest in equity or equity-like securities, the
High Yield Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value
Fund and Large Cap Growth Fund are 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.

Small and Mid-Cap Stocks
There are additional risk factors associated with investments in the
small-to-medium capitalization stocks. 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 Standard &
Poor's 500 Index ("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 though not necessarily, 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, the Funds that invest in small-to-mid-cap stocks could be
slightly more volatile than, and may fluctuate independently of, broad stock
market indices such as the S&P 500 Index.

Sector Selection
Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain sector
may underperform other sectors or the market as a whole. As the Adviser
allocates more of a Fund's portfolio holdings to a particular sector, a Fund's
performance will be more susceptible to any economic, business, or other
developments which generally affect that sector.

"Growth Versus Value" Investment Styles
Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on a forecast of lower earnings, a negative
fundamental development, or an adverse market development. Further, growth
stocks may not pay dividends or may pay lower dividends than value stocks. Value
stocks typically act just the opposite of growth stocks. This means that growth
stocks depend more on price changes for returns and may be more adversely
affected in a down market compared to value stocks that pay higher dividends.
Conversely, value stocks depend less on price changes for returns and may lag
behind growth stocks in an up market.

PORTFOLIO TURNOVER
Although none of the Funds intends to invest for the purpose of seeking
short-term profits, securities will be sold whenever the Funds' Adviser believes
it is appropriate to do so in light of a Fund's investment objective, without
regard to the length of time a particular security may have been held. A higher
rate of portfolio turnover involves correspondingly greater transaction expenses
which must be borne directly by a Fund and, thus, indirectly by its
shareholders. In addition, a high rate of portfolio turnover may result in the
realization of larger amounts of capital gains which, when distributed to a
Fund's shareholders, are taxable to them. Nevertheless, transactions for a
Fund's portfolio will be based upon investment considerations and will not be
limited by any other considerations when the Adviser deems it appropriate to
make changes to a Fund's portfolio. In the case of the Large Cap Growth Fund,
however, the Adviser will attempt to manage the portfolio investments to
minimize (to the extent possible and consistent with the Fund's investment
objective) the tax consequences for shareholders who hold the Fund's Shares.

INVESTMENT LIMITATIONS

All of the Funds have the following common investment limitations. The Funds
will not:

o borrow money directly or through reverse repurchase agreements
(arrangements in which a 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, a 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.

The U.S. Government Securities Fund, High Yield Bond Fund, Mid Cap Value Fund,
Mid Cap Growth Fund, Large Cap Value Fund and Large Cap Growth Fund will
not:

o with respect to 75% of the value of that Fund's total assets, invest more
than 5% of its total assets in securities of one issuer other than cash,
cash items, securities of other investment companies (in the case of the
High Yield Bond Fund and the Large Cap Growth Fund) 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.

FUND MANAGEMENT, DISTRIBUTION AND ADMINISTRATION

BOARD OF DIRECTORS
The Funds are managed by a Board of Directors.

The Directors are responsible for managing the business affairs of the Funds and
for exercising all the Funds' powers, except those reserved for the
shareholders.

INVESTMENT ADVISER
Investment decisions for the Funds are made by M&T Bank, subject to the
direction of the Directors.

The Adviser continually conducts investment research and supervision for the
Funds and is responsible for all purchases and sales of portfolio instruments.
The Adviser receives an annual fee from each of the Funds for its services.

Both the Corporation and the Adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Funds and their portfolio
securities. These codes recognize that such persons owe a fiduciary duty to the
Funds' 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 Funds; 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 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 equal to a percentage of each
Fund's average daily net assets as follows: 0.70% for the U.S. Government
Securities Fund, New York Municipal Income Fund, High Yield Bond Fund, Mid Cap
Value Fund and Large Cap Value Fund; and 0.85% for the Mid Cap Growth Fund and
Large Cap Growth Fund. These fees are computed daily and paid at least 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 a Fund. From time to time, M&T Bank may voluntarily
waive all or a portion of its advisory fees in order to help a Fund maintain a
competitive expense ratio.

ADVISER'S BACKGROUND
M&T Bank is the principal banking subsidiary of M&T Bank Corporation, a regional
bank holding company in existence since 1969 with headquarters in Buffalo, New
York. As of December 31, 1998, M&T Bank Corporation had $20.6 billion in
consolidated assets. M&T Bank has over 247 offices throughout New York State and
Northeastern Pennsylvania, including Western New York, the Rochester region, the
Southern Tier, the Hudson Valley region, New York City, Albany and Syracuse and
an office in Nassau, The Bahamas as of December 31, 1998. Prior to May 29, 1998,
M&T Bank Corporation was known as First Empire State Corporation.

M&T Bank was founded in 1856 and provides comprehensive banking and financial
services to individuals, governmental entities and businesses throughout New
York State. As of December 31, 1998, M&T Bank had over $4.5 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, 1998, M&T Bank managed $1.51 billion in net 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 Funds 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.

PORTFOLIO MANAGEMENT TEAM

The U.S. Government Securities Fund, New York Municipal Income Fund and High
Yield Bond Fund are managed by Thomas R. Pierce. Mr. Pierce has been the
portfolio manager of the U.S. Government Securities Fund and New York Municipal
Income Fund since March 1995 and of the High Yield Bond Fund since its inception
in May 1999. Mr. Pierce joined M&T Bank in January 1995 as Vice President from
Merit Investment Advisors where he acted as Director of Fixed Income Product and
Trading since 1993. For the period from 1987 to 1993, Mr. Pierce served as Fixed
Income Manager at ANB Investment Management Company, where he directed the
management of $3.5 billion of active and passive fixed income portfolios. Mr.
Pierce is a Chartered Financial Analyst and has a B.A. in Economics from
Washington University, and an M.B.A. from the University of Chicago.

Robert J. Truesdell has supervised the investment management of the U.S.
Government Securities Fund and New York Municipal Income Fund since their
inception. From August 1994 through February 1995, he also served as the
portfolio manager of these Funds. In addition to his responsibilities with
respect to these Funds, Mr. Truesdell manages individual investment accounts and
oversees the investment activities of M&T Bank's money market and fixed income
products as well as the money market funds in the Vision Group of Funds, Inc.
Mr. Truesdell joined M&T Bank as Vice President and Fixed Income Manager in
1988. In addition to the Vision money market funds, he also manages individual
investment management accounts. Mr. Truesdell holds an M.B.A. in Accounting from
the State University of New York at Buffalo.

The Mid Cap Value Fund and Large Cap Growth Fund are managed by John, J. Clark,
III. Mr. Clark has been the portfolio manager of the Mid Cap Value Fund since
September, 1998 and of the Large Cap Growth Fund since its inception in May
1999. Mr. Clark joined M&T Bank as Vice President and Senior Portfolio Manager
of M&T Capital Advisors Group in April 1998. Most of his 16-plus years of
investment experience took place at Cornell University where he was part of the
in-house investment organization where he helped to manage the University's
endowment. Immediately prior to joining M&T Bank, Mr. Clark was with Marine
Midland Bank as a Senior Portfolio Manager. Mr. Clark obtained his B.S. from
Cornell University and M.B.A. from Virginia Commonwealth University and is also
a Chartered Financial Analyst.

The Mid Cap Growth Fund has been managed since its inception in July, 1996 by
John F. Moore, assisted by Brian D. Bell. Mr. Moore joined M&T Bank in October
1995 as Senior Vice President and Chief Investment Officer. His 19 years of
investment experience includes five years (1991-1995) with Value Line Asset
Management in New York, where he 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. Prior to joining M&T Bank in November 1998, Mr. Bell was a
research analyst with OCI Asset Management and Columbus Circle Investors for
three years each. During his six years of investment experience, Mr. Bell
focused on fundamental and quantitative research on numerous growth companies
and economic sectors. Mr. Bell obtained his B.S. from Rochester Institute of
Technology and is currently working on a M.B.A. at the University of Rochester
an on his Chartered Financial Analyst designation.

The Large Cap Value Fund has been managed since its inception in September, 1997
by John E. Leslie III. Mr. Leslie joined M&T Bank in February 1996 as Vice
President and Senior Portfolio Manager. His investment experience includes two
years with Value Line Asset Management, New York where he was a Senior Portfolio
Manager (1994- 1996). From 1992 to 1994, Mr. Leslie was an independent
consultant designing quantitative equity valuation models and structured
investment products. Mr. Leslie obtained his B.A. in Finance from Suffolk
University, his M.B.A. from Babson College and is a Chartered Financial
Analyst.

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, M&T Bank looks for prompt execution of the order at a favorable
price. In working with dealers, M&T Bank 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. In selecting among firms
believed to meet these criteria, M&T Bank may give consideration to those firms
which have sold or are selling Shares of the Funds and other funds distributed
by Federated Securities Corp. M&T Bank makes decisions on portfolio transactions
and selects brokers and dealers subject to review by the Directors and M&T Bank.

DISTRIBUTION OF FUND SHARES

Federated Securities Corp. is the principal distributor for Shares of the Funds.

Shares of the Funds 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 an indirect, wholly owned subsidiary of Federated Investors,
Inc., 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, each of the
Funds may pay to the distributor an amount computed at an annual rate of 0.25%
of the Fund's average daily net assets on Class A Shares and 0.75% of the Fund's
average daily net assets on Class B Shares to finance any activity which is
principally intended to result in the sale of Shares subject to the Plan. In the
case of Class B Shares, the Plan also may be used to compensate the Distributor
or other financial institutions for commissions advanced on the sale of Class B
Shares. 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 Funds exceed such lower
expense limitation as the distributor may, by notice to the Corporation,
voluntarily declare to be effective. The Funds have no present intention of
paying or accruing 12b-1 fees on Class A Shares.

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 Funds' Plan is a compensation type plan. As such, the Funds make no payments
to the distributor except as described above. Therefore, the Funds do not pay
for unreimbursed expenses of the distributor, including amounts expended by the
distributor in excess of amounts received by it from the Funds, 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 Funds
under the Plan.

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

SHAREHOLDER SERVICING ARRANGEMENTS
The Funds have adopted a Shareholder Services Plan, which is administered by
Federated Administrative Services. Under the Plan, M&T Bank acts as a
shareholder servicing agent (the "Shareholder Servicing Agent") for the Funds.
The Funds 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 each Fund's average daily net assets on Class A Shares and
Class B Shares for which the Shareholder Servicing Agent provides services. The
Class A Shares of U.S. Government Securities Fund, New York Municipal Income
Fund, High Yield Bond Fund, Large Cap Value Fund and Large Cap Growth Fund have
no present intention of paying or accruing shareholder servicing 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 any 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
Funds.

ADMINISTRATION OF THE FUNDS
Federated Administrative Services ("FAS"), provides the Funds with certain
administrative personnel and services necessary to operate the Funds. Federated
Services Company ("Federated Services") provides the Funds with certain
financial, administrative, transfer agency and fund accounting services. FAS and
Federated Services are indirect wholly owned subsidiaries of Federated
Investors, Inc.
These services are provided for an aggregate annual fee as specified below:

Aggregate Daily Net Assets of
Maximum Fee Vision Group Of Funds, Inc.

0.140% on the first $1.4 billion
0.100% on the next $750 million
0.07% on assets in excess of $2.15 billion

HOW THE FUNDS VALUE THEIR SHARES

A Fund's net asset value per share fluctuates.

The net asset value ("NAV") for a 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. The NAV for each class of Shares of a Fund may differ
due to the differences in expenses incurred by each class and the impact this
has on each classes' net income.

The NAV per share of each Fund is determined as of the close of trading
(normally 4:00 p.m., Eastern time) on the New York Stock Exchange, Monday
through Friday, except on: o days on which there are not sufficient changes in
the value of a Fund's portfolio securities that its net asset value might
be materially affected;

o days during which no Shares are tendered for redemption and no orders to
purchase Shares are received; or

o the following holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

MINIMUM INITIAL INVESTMENT

The minimum initial investment in each Fund is $500, unless the investment is in
a retirement plan or an IRA account, in which case the minimum initial
investment is $250. Subsequent investments must be in amounts of at least $25.
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

In connection with the sale of Class A and B Shares, Federated Securities Corp.
may from time to time offer certain items of nominal value to any shareholder or
investor.

<PAGE>

CLASS A SHARES
Class A Shares are sold at their net asset value next determined after an order
is received, plus a sales charge as follows:

U.S. Government Securities Fund, New York Municipal Income Fund and High
Yield Bond Fund

Sales Charge as a Sales Charge as a Dealer Concession as a
Percentage of Public Percentage of Net Percentage of Public
Amount of Transaction Offering Price Invested Offering Price
- --------------------------------------- ------------------------- ---------------------- -----------------------------
Less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.75% 3.90% 3.25%
$250,000 but less than $500,000 3.00% 3.09% 2.75%
$500,000 but less than $1 million 2.00% 2.04% 1.75%
$1 million or more 0.00% 0.00% 0.00%

Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large Cap Growth Fund

Sales Charge as a Sales Charge as a Dealer Concession as a
Percentage of Public Percentage of Net Percentage of Public
Amount of Transaction Offering Price Invested Offering Price
- --------------------------------------- ------------------------- ---------------------- -----------------------------
Less than $50,000 5.50% 5.82% 5.00%
$50,000 but less than $100,000 4.25% 4.44% 3.75%
$100,000 but less than $250,000 3.25% 3.36% 2.75%
$250,000 but less than $500,000 2.25% 2.30% 2.00%
$500,000 but less than $1 million 2.00% 2.04% 1.75%
$1 million or more 0.00% 0.00% 0.00%
</TABLE>

PURCHASES AT NET ASSET VALUE (Class A Shares)
Class A Shares of each of the Funds may be purchased 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, M&T Bank Corporation and their subsidiaries; (ii) current and
former Directors of the Corporation; (iii) clients of the M&T Capital Advisers
and Trust Groups of M&T Bank; (iv) employees (including registered
representatives) of a dealer which has a selling group agreement with the Funds'
distributor and consents to such purchases; (v) current and retired employees of
any sub-adviser to the M&T Funds, Inc.; and (vi) investors referred by any
sub-adviser to the M&T Funds, Inc. Immediate relatives include grandparents,
parents, siblings, children, and grandchildren of a qualified investor, and the
spouse of any immediate relative. A special application form which is available
from the Shareholder Servicing Agent, must be submitted with the initial
purchase.

The distributor will uniformly and periodically offer to pay cash payments as
incentives to broker/dealers whose customers or clients purchase Shares of a
Fund under this "no-load" purchase provision. This payment will be made out of
the distributor's assets and not by the Corporation, the Funds, or a Fund's
shareholders.

PURCHASES WITH PROCEEDS FROM REDEMPTIONS OF MUTUAL FUNDSHARES OR ANNUITIES
(Class A Shares)
Investors may purchase Class A Shares of each of the Funds 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 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 a
Fund under this "no-load" purchase provision. This payment will be made out of
the distributor's assets and not by the Corporation, the Funds or a Fund's
shareholders.

REDUCING THE SALES CHARGE (Class A Shares)
The sales charge can be reduced on the purchase of Class A Shares of the Fund
through:

o quantity discounts and accumulated purchases;
o signing a 13-month letter of intent;
o using the reinvestment privilege; or
o concurrent purchases.

Quantity Discounts and Accumulated Purchases
As shown in the tables under "What Fund Shares Cost," larger purchases of Class
A Shares reduce the sales charge paid. The Funds will combine purchases of Class
A Shares 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 Class A Shares of any of the Funds is made, the
Fund will consider the previous purchases of Class A Shares still invested in
the Fund in calculating the applicable sales charge rate. For example, if a
shareholder already owns Class A 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 would be the rate
imposed on a $110,000 investment, not the rate imposed on a $40,000 investment.

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 Class A 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 Class A Shares of the U.S. Government
Securities Fund, New York Municipal Income Fund or High Yield Bond Fund equal in
value to at least $100,000 over the next 13 months, or Class A Shares of the Mid
Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund or Large Cap Growth
Fund equal in value to at least $50,000 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 in escrow (in Shares) 4.50% of the total price of the Shares
of the U.S. Government Securities Fund, New York Municipal Income Fund or High
Yield Bond Fund, or 5.50% of the total price of the Shares of the Mid Cap Value
Fund, Mid Cap Growth Fund, Large Cap Value Fund or Large Cap Growth Fund, as the
case may be, intended to be purchased until such purchase is completed.

The amount 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 Class A Shares in the Funds have been redeemed, the shareholder has a
one-time right to reinvest, within 90 days, the redemption proceeds in Class A
Shares of the Funds 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 Funds, 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 Class A Shares 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
Class A Shares of one of the Funds with a sales charge, and $40,000 in another
Fund with a sales charge, the sales charge imposed on each purchase would be
reduced to the sales charge rate in effect for a $110,000 investment in the
respective Fund.

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.

CLASS B SHARES

Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large Cap
Growth Fund

Class B Shares are sold at net asset value, without a front-end sales charge.
However, Class B Shares may be subject to a contingent deferred sales charge for
Shares held less than seven years. See "Sales Charge When You Redeem Class B
Shares."

CONVERSION OF CLASS B SHARES
Class B Shares will automatically convert into Class A Shares after eight full
years from the purchase date. Such conversion will be on the basis of the
relative NAVs per Share, without the imposition of any charges. Class B Shares
acquired by exchange from Class B Shares of another Fund will convert into Class
A Shares based on the time of the initial purchase.

SALES CHARGE REALLOWANCE (Class A Shares)
For sales of Class A Shares of the Funds, a broker/dealer will normally receive
up to 90% of the applicable sales charge. Any portion of the sales charge which
is 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 Funds 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.

SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS (Class A and/or Class B 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 Class A Shares of the Funds.

In addition, the distributor will offer to pay broker/dealers an amount of up to
1.00% of the net asset value of Class A Shares purchased for an account of their
client or customer in an amount of $1 million or more.

The distributor and the Adviser, or affiliates thereof, at their own expense and
out of their own assets, may also provide other compensation to financial
institutions in connection with sales of Class A or B Shares of the Funds 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 Funds, or a Fund's
shareholders, nor will it change the price paid by investors for the purchase of
Fund Shares.

HOW TO BUY SHARES

You can buy Shares of the Funds 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, Jr. Day).

Shares may be purchased through the Bank, M&T Securities, Inc. or through
authorized broker/dealers. Payment may be made either by wire, mail or transfer.
The Funds reserve the right to reject any purchase request.

Orders for $250,000 or more will be invested in Class A Shares instead of Class
B Shares to maximize your return and minimize the sales charges and marketing
fees. Accounts held in the name of an investment professional may be treated
differently. Class B Shares will automatically convert into Class A Shares after
eight full years from the purchase date. This conversion is a non-taxable event.

THROUGH THE BANK
To purchase Shares through M&T Bank contact an account representative at M&T
Bank or affiliates of M&T Bank which make Shares available, or M&T Bank's Mutual
Fund Services at (800) 836-2211 (in the Buffalo area, 635-9368). For purchases
through Automated Clearing House ("ACH"), the purchase order must be received by
3:00 p.m. (Eastern time).

THROUGH M&T SECURITIES, INC.
You may purchase Shares through any representative of M&T Securities, Inc. ("M&T
Securities") at M&T Bank 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.

<PAGE>

THROUGH AUTHORIZED BROKER/DEALERS
An investor may place an order through authorized brokers and dealers to
purchase Shares of the Funds. 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 within three business
days following the order.

BUYING SHARES BY WIRE
You can purchase Shares of the Funds by Federal Reserve wire. This is referred
to as wiring federal funds, and it simply means that your bank sends money to
the Funds' 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 Funds for the first time by mail, complete and sign an
account application form and mail it, together with a check made payable to
(Name of the Fund and Class of Shares) in an amount of $500 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 Funds 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 next net asset value 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 U.S. Government Fund, New York Municipal Income Fund and High Yield Bond
Fund declare dividends daily and pay them monthly. The Mid Cap Value Fund, Large
Cap Value Fund and Large Cap Growth Fund declare and pay dividends quarterly.
The Mid Cap Growth Fund declares and pays dividends annually. Capital gains
realized by the Funds, if any, will be distributed at least once every 12
months. Dividends and capital gains will be automatically reinvested in
additional Shares of the Funds on payment dates at the ex-dividend date's net
asset value without a sales charge, unless payments are requested by writing to
the Funds or M&T Bank's Mutual Fund Services. Dividends and capital gains can
also be reinvested in Shares of the same class of any other fund comprising the
Vision Group of Funds, Inc., subject to any applicable minimum investment
requirements.

RETIREMENT PLANS

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

<PAGE>

CERTIFICATES AND CONFIRMATIONS
Shareholders will receive detailed confirmations of transactions (except for
systematic program transactions). In addition, shareholders will receive
periodic statements reporting all account activity, including dividends paid.
The Funds no longer issue share certificates.

HOW TO EXCHANGE SHARES

You may purchase Shares through an exchange from the same share class of another
fund in Vision Group of Funds, Inc. at net asset value, plus any applicable
sales charge. In addition, you may exchange Class A Shares of the Funds into
Class A Shares of Federated International Equity Fund at net asset value, plus
any applicable sales charge.

In order to exchange Shares, you must:

o meet the minimum initial investment requirements (if the exchange results in
the establishment of a new account); o establish an account into the fund you
want to acquire if you do not have an account in that fund; o receive a
prospectus for the fund into which you wish to exchange; and o only exchange
into funds that may be legally sold in your state of residence.

If you establish a new account for an exchange into another fund, the account
will be registered in the same name and have the same dividend and capital gains
payment options as you selected for your existing account. If the new account
registration is different from your existing account, you must provide a
signature guarantee to verify your signature. See "Signature Guarantees" for
more information.

CLASS A SHARE EXCHANGES

Exchanges at Net Asset Value
If you exchange between funds with different sales charges, the exchange will be
made at net asset value.

If you paid a sales charge once (including Shares acquired through reinvestment
of dividends and capital gains) you will not have to pay the sales charge again
upon exchange. This is true even if you exchange out of a Fund with a sales
charge; then into a Fund without a sales charge and back into a Fund with a
sales charge.

Exchanges Subject to a Sales Charge
If you purchased into a Fund without a sales charge and exchange into a Fund
with a sales charge, you will be assessed the applicable sales charge when you
make the exchange. However, the sales charge will not be applied to any Shares
that you acquired through reinvestment of dividends and capital gains.

CLASS B SHARE EXCHANGES
You may exchange Class B Shares from one Fund to another at net asset value
without any sales charge. The time you held the original Class B Shares will be
added to the time you held the exchanged Class B Shares for purposes of
calculating any applicable contingent deferred sales charge when you ultimately
redeem those Shares.

GENERAL EXCHANGE INFORMATION
Once the transfer agent has received proper instructions and documentation,
Shares submitted for exchange will be redeemed at the next net asset value
calculated.

A Fund may modify or terminate the exchange privilege at any time; shareholders
will be notified prior to such change. A Fund's management or adviser may
determine from the amount, frequency, and pattern of exchanges that a
shareholder is engaged in excessive trading that is detrimental to the Fund and
other shareholders. If this occurs, the Fund may terminate the availability of
the exchanges to that shareholder and may bar that shareholder from purchasing
other funds.

For additional information about the exchange privilege, call M&T Bank's Mutual
Fund Services at the number listed below.

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.

EXCHANGING SHARES BY TELEPHONE
You may exchange Shares between Funds by calling M&T Bank's Mutual Fund Services
at (800) 836-2211 (in Buffalo, 635-9368). You will be automatically eligible for
telephone exchanges, 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 redemption option on your initial application. If
you do not do this 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 of the same
share class 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.

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 Funds, the Funds 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

All written requests should state: Fund Name and the Share Class name; the
account name as registered with the Fund; the account number; and the number of
Shares to be redeemed or the dollar amount of the transaction. An exchange
request should also state the name of the Fund into which the exchange is to be
made. All owners of the account must sign the request exactly as the Shares are
registered.

SYSTEMATIC EXCHANGE PROGRAM
If you desire to automatically exchange Shares of a predetermined amount from
one Fund into another Fund on a monthly, quarterly or annual basis, you may take
advantage of a systematic exchange privilege. Exchanges are subject to
investment minimums, limitations, and any applicable sales charges, as described
above. The minimum amount that may be exchanged is $25. Shareholders interested
in participating in this program should contact M&T Bank's Mutual Fund Services
for more information.

HOW TO REDEEM SHARES

The Funds redeem your Shares at the net asset value per share next determined
after the Funds receive your redemption request. In the case of Class B Shares,
you may be subject to a contingent deferred sales charge, as described below.
When Fund Shares are redeemed, they may be worth more or less than the original
cost.

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

<PAGE>

Sales Charge When You Redeem class b shares
Your redemption proceeds may be reduced by a sales charge, commonly referred to
as a contingent deferred sales charge (CDSC), as follows:

CLASS B SHARES (ONLY)
Shares Held Up To: CDSC
1 year 5.00%
2 years 4.00%
3 years 3.00%
4 years 3.00%
5 years 2.00%
6 years 1.00%
7 years or more 0.00%
Class B Shares convert to Class A Shares (which pay lower ongoing expenses)
approximately eight years after purchase.

You will not be charged a CDSC when redeeming Class B Shares:

o purchased with reinvested dividends or capital gains;
o purchased within 120 days of redeeming Shares of an equal or lesser amount;
o that you exchanged into the same share class of another Fund where the
Shares were held for the applicable CDSC holding period;
o purchased through investment professionals that did not receive advanced sales
payments; o if after you purchase Shares you become disabled as defined by the
Internal Revenue Code; o that are qualifying redemptions of Class B Shares under
a Systematic Withdrawal Program;
o of Shares held by Directors, employees, and sales representatives of the
Fund, the distributor, or affiliates of the Fund or distributor, employees
of any financial intermediary that sells Shares of the Fund pursuant to a
sales agreement with the distributor, and their immediate family members to
the extent that no payments were advanced for purchases made by these
persons;
o of Shares originally purchased through a bank trust department, an
investment adviser registered under the Investment Advisers Act of 1940 or
retirement plans where the third party administrator has entered into
certain arrangements with Federated Securities Corp. or its affiliates, or
any other financial intermediary, to the extent that no payments were
advanced for purchases made through such entities;
o if the Fund redeems your Shares and closes your account for not meeting the
minimum balance requirement; o if your redemption is a required retirement plan
distribution; or o upon the death of the last surviving shareholder(s) of the
account.

If your redemption qualifies, you or your investment professional should notify
the Distributor at the time of redemption to eliminate the CDSC. If the
Distributor is not notified, the CDSC will apply.

To keep the sales charge as low as possible, we sell your Shares in the
following order:

o Shares that are not subject to a CDSC;
o Shares held the longest (to determine the number of years your Shares have
been held, include the time you held Class B Shares of Funds that were
exchanged into the Fund); and
o then, the CDSC is calculated using the share price at the time of purchase or
redemption, whichever is lower.

Systematic Withdrawal Program ("SWP") on Class B Shares
A contingent deferred sales charge will not be charged on SWP redemptions of
Class B Shares if:

o Shares redeemed are 12% or less of the account value in a single year;
o the account is at least one year old;
o all dividends and capital gains distributions are reinvested; and
o the account has at least a $10,000 balance when the SWP is established
(multiple Class B Share accounts cannot be aggregated to meet this
minimum balance).

A contingent deferred sales charge will be charged on redemption amounts that
exceed the 12% annual limit. In measuring the redemption percentage, the account
is valued when the SWP is established and then annually at calendar year-end.
Redemptions can be made only at a rate of 1% monthly, 3% quarterly, or 6%
semi-annually.

The Fund reserves the right to discontinue or modify these provisions.
Shareholders will be notified of such action.

TELEPHONE REDEMPTIONS
You may redeem your Fund Shares by telephone, unless you decline the privilege
on your account application.

You may redeem your Fund Shares by calling M&T Bank's Mutual Fund Services at
(800) 836-2211 (in the Buffalo area, phone 635-9368) 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 of M&T Bank 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 Funds reserve 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 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 Funds, they 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 and share class, your account number, and the share or dollar amount you
want to redeem.

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:

o if you are redeeming Shares worth $50,000 or more;
o if you want a redemption of any amount sent to an address other than your
address on record with a Fund; o if you want a redemption of any amount payable
to someone other than yourself as the shareholder of record; or o if you want to
transfer the registration of Fund Shares.

The signature guarantee must be provided by:

o 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");
o a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which also is administered by
the FDIC;
o a member firm of the New York, American, Boston, Midwest, or Pacific Stock
Exchange; or o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Funds do not accept signatures guaranteed by a notary public.

The Funds and their transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Funds may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Funds and their 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 Funds or their agents have received payment for Shares
from the shareholder.

SYSTEMATIC WITHDRAWAL PROGRAM FOR CLASS A SHARES (ONLY)
If you own Class A 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. Class A 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 Class A Shares, and any possible
fluctuations in a Fund's net asset value per share, these redemptions may reduce
and eventually exhaust your investment in a Fund. For this reason, you should
not consider systematic withdrawal payments as yield or income received from
your investment in a Fund. Due to the fact that Class A Shares are sold subject
to a sales charge, it may not be advisable for shareholders to be purchasing
Class A 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 Funds
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, each 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 a Fund's responsibilities under the Investment Company Act of
1940.

TAX INFORMATION

Below is a general discussion of tax considerations for the Funds. No attempt
has been made to present a detailed explanation of the income tax treatment of
the Funds or their shareholders, and this discussion is not intended as a
substitute for careful tax planning.

The tax consequences discussed here apply whether you receive dividends and
capital gains in cash or reinvest them in additional Shares. The Funds 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.

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

Each 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
Shareholders are required to pay federal income taxes on Fund dividends and
other distributions received (including capital gains distributions, if any),
unless shareholders are exempt from taxes or receive tax-exempt dividends on New
York Municipal Income Fund, as described below.

State and Local Taxes
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.

NEW YORK MUNICIPAL INCOME FUND

Federal Taxes
Shareholders are not required to pay federal regular income tax on any dividends
received from the Fund that represent net interest received from tax-exempt
municipal bonds, although tax-exempt interest will increase the taxable income
of certain recipients of social security benefits. However, under the Tax Reform
Act of 1986, dividends representing net interest income earned on some municipal
bonds may be included in calculating the federal alternative minimum tax for
individuals and corporations. The alternative minimum tax, up to 28% of
alternative minimum taxable income for individuals, applies when it exceeds the
regular tax for the taxable year. Alternative minimum taxable income is equal to
the regular taxable income of the taxpayer increased by certain "tax preference"
items not included in regular taxable income and reduced by only a portion of
the deductions allowed in the calculation of the regular tax.

The Tax Reform Act of 1986 treats interest on certain "private activity" bonds
issued after August 7, 1986, as a tax preference item for both individuals and
corporations. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons and other public facilities, private
activity bonds provide benefits to private parties. The Fund may purchase all
types of municipal bonds, including private activity bonds. Thus, should it
purchase any such bonds, a portion of the Fund's dividends may be treated as a
tax preference item.

Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.

These tax consequences apply whether dividends are received in cash or as
additional Shares. Information on the tax status of dividends and distributions
is provided annually.

New York Taxes
Under existing New York laws, shareholders of the New York Municipal Income Fund
will not be subject to New York State or New York City personal income taxes on
dividends to the extent that such dividends qualify as "exempt interest
dividends" under the Internal Revenue Code of 1986 and represent interest income
attributable to obligations of the State of New York and its political
subdivisions, as well as certain other obligations, the interest on which is
exempt from New York State and New York City personal income taxes, such as, for
example, certain obligations of the Commonwealth of Puerto Rico. To the extent
that distributions are derived from other income, such distributions will be
subject to New York State or New York City personal income tax.

The New York Municipal Income Fund cannot predict in advance the exact portion
of its dividends that will be exempt from New York State and New York City
personal income taxes. However, the Fund will report to shareholders at least
annually what percentage of the dividends it actually paid is exempt from such
taxes.

Dividends paid by the New York Municipal Income Fund are exempt from the New
York City unincorporated business tax to the same extent that they are exempt
from the New York City personal income tax.

Dividends paid by the Fund are not excluded from net income in determining New
York State or New York City franchise taxes on corporations or financial
institutions. State And Local Taxes Income from the New York Municipal Income
Fund is not necessarily free from taxes in states other than New York.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.

The Tax Treatment Of Temporary Investments
Dividends paid by the New York Municipal Income Fund that are attributable to
the net interest earned on some temporary investments (previously discussed in
the "Temporary Investments" section) and any realized net short-term capital
gains are taxed as ordinary income.

DESCRIPTION OF FUND SHARES

Vision Group of Funds, Inc. was organized as a Maryland corporation on February
23, 1988, and consists of ten investment 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 New York Municipal Income Fund,
Vision High Yield Bond Fund, Vision Mid Cap Value Fund (formerly Vision Growth &
Income Fund), Vision Mid Cap Growth Fund (formerly Vision Capital Appreciation
Fund), Vision Large Cap Value Fund (formerly Vision Equity Income Fund), and
Vision Large Cap Growth Fund. The Corporation's Articles of Incorporation permit
the Corporation to offer separate series of Shares in these funds or other
future portfolios. Vision Money Market Fund and Vision Treasury Money Market
Fund offer two classes of Shares, Class A Shares and Class S Shares. Vision New
York Tax-Free Money Market Fund, Vision U.S. Government Securities Fund, Vision
New York Municipal Income Fund and Vision High Yield Bond Fund currently offer
one class of Shares, Class A Shares. Vision Mid Cap Value Fund, Vision Mid Cap
Growth Fund, Vision Large Cap Value Fund, and Vision Large Cap Growth Fund offer
two classes of Shares, Class A Shares and Class B Shares.

Each share of a Fund or class represents an equal proportionate interest in that
Fund or class with other Shares and participates equally in the dividends and
any other distributions from that Fund or class that are declared at the
discretion of the Directors.

VOTING RIGHTS AND OTHER INFORMATION

Shareholders of the Funds are entitled to one vote for each full share they hold
and to fractional votes for any fractional Shares they hold, except that in
matters affecting only a particular Fund or class, only Shares of that Fund or
class are entitled to vote.

Shareholders in each Fund generally vote in the aggregate and not by class,
unless the law expressly requires otherwise or the Directors determine 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 SAI for examples
of when the Investment Company Act of 1940 requires that shareholders vote by
class.) As of February 18, 1999, Reho & Co., Buffalo, NY, acting in various
capacities for numerous accounts was the owner of record of 2,312,045 Shares
(33.56%) of the Government Fund, 2,297,845 Shares (29.24%) of the Mid Cap Value
Fund, and 1,779,953 Shares (42.09%) of the Mid Cap Growth Fund and therefore,
may for certain purposes be deemed to control these Funds and be able to affect
the outcome of certain matters presented for a vote of shareholders. As of
February 18, 1999, Krauss & Company, Buffalo, NY, acting in various capacities
for numerous accounts, was the owner of record of 1,741,058 Shares (25.27%) of
the Government Fund, and 1,505,154 Shares (35.99%) of the Large Cap Value Fund
and therefore, may for certain purposes be deemed to control these Funds and be
able to affect the outcome of certain matters presented for a vote of
shareholders. In each case, the ownership represents Shares that were
re-designated Class A Shares as of the date of this prospectus.

The Funds are 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
Funds' investment advisory agreement, to replace the Funds' independent
certified public accountants and, under certain circumstances, to elect members
to the Board of Directors. Directors may be removed by a vote of shareholders at
a special meeting. The 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 a Fund" means the money
received by the Corporation upon the issuance or sale of Shares in a 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 a Fund.

Assets belonging to a Fund are charged with the direct expenses and liabilities
of that Fund and with a share of the general expenses and liabilities of the
Corporation. Likewise, assets belonging to a Class are charged with different
expenses and liabilities of that Class and with a share of the general expenses
and liabilities of the Fund. 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 a Fund's direct and allocable
liabilities at the time the expense or liability is incurred as well as a Fund's
allocable share of any general assets at the time the asset is acquired. These
determinations are reviewed and approved annually by the Directors and are
conclusive.

HOW THE FUNDS SHOW PERFORMANCE

From time to time, advertisements for the Funds may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Funds' performance to certain indices. The Funds may advertise their performance
in terms of total return, yield, and tax-equivalent yield (New York Municipal
Income Fund only), as defined below. Of course, total return, yield, and
tax-equivalent yield figures are based on past results and are not an indication
of future performance. Total return and yield will be calculated separately for
each class of Shares.

TOTAL RETURN
The average annual total return of each class of Shares 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.

YIELD
The yield of each class of Shares is determined by dividing the net investment
income per share (as defined by the SEC) earned by each class of Shares over a
thirty-day period by the maximum offering price per share of each class of
Shares 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 reinvested every six months. The yield does not necessarily reflect
income actually earned by each class of Shares because of certain adjustments
required by the SEC and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

TAX-EQUIVALENT YIELD (NEW YORK MUNICIPAL INCOME FUND ONLY)
The tax-equivalent yield of the New York Municipal Income Fund is calculated
similarly to the yield. However, it is adjusted to show the taxable yield that
the New York Municipal Income Fund would have had to earn to equal its actual
yield, assuming a specific tax rate, and assuming that income is 100% tax
exempt. The tax-equivalent yield is computed by dividing the tax-free yield by
the result of one minus the combined federal and state tax rate. For example, if
an investor is in the 31% federal income tax bracket, and the rate for state
taxes is 6.85%, assuming the tax-free yield is 5.0%, the investor would have to
receive 8.04% from a taxable investment to equal that tax-free yield (5.0%
divided by 1 -- (.31 +.0685) = 8.04%).

<PAGE>

APPENDIX

Standard & Poor's ("S&P") Corporate Bond Rating Definitions
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. BB, B, CCC, CC--Debt rated "BB," "B," "CCC," and "CC"
is regarded, on balance, as predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of the
obligation. "BB" indicates the lowest degree of speculation and "CC" the highest
degree of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties of major
risk exposures to adverse conditions. CI--The rating "CI" is reserved for income
bonds on which no interest is being paid. D--Debt rated "D" is in default, and
payment of interest and/or repayment of principal is in arrears.

Moody's Investors Service, Inc. Corporate Bond Rating Definitions
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 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. Ba--Bonds which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class. B--Bonds which are
rated "B" generally lack characteristics of a desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small. Caa--Bonds which are rated "Caa" are
of poor standing. Such issues may be in default or there may be present elements
of danger with respect to principal or interest. Ca--Bonds which are rated "Ca"
represent obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings. C--Bonds which are rated "C"
are the lowest rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

Fitch ICBA, Inc.. Corporate Bond 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 credit 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.

BB-`BB' ratings indicate that there is a possibility of credit risk developing,
particularly as the result of adverse economic change over time; however,
business or financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are not investment
grade.

B- `B' ratings indicate that significant credit risk is present, but a limited
margin of safety remains. Financial commitments are currently being met;
however, capacity for continued payment is contingent upon a sustained,
favorable business and economic environment.

CCC, CC, C- Default is a real possibility. Capacity for meeting financial
commitments is solely reliant upon sustained, favorable business or economic
developments. A `CC' rating indicates that default of some kind appears
probable. `C' ratings signal imminent default.

DDD, DD, and D - are not meeting current obligations and are extremely
speculative. `DDD' designates the highest potential for recovery of amounts
outstanding on any securities involved. For U.S. corporates, for example, `DD'
indicates expected recovery of 50% - 90% of such outstandings, and `D' the
lowest recovery potential, i.e. below 50%.

Fitch IBCA, Inc. Commercial Paper 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 for timely payment only slightly less in degree than issues rated
F-1+.

<PAGE>

ADDRESSES

VISION GROUP OF FUNDS, INC.
P.O. Box 4556
Buffalo, New York 14240-4556
(800) 836-2211 (716) 635-9368

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Tower
Pittsburgh, Pennsylvania 15222-3779

INVESTMENT ADVISER
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203

ADMINISTRATOR
Federated Administrative Services
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8609
Boston, Massachusetts 02266-8609

CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8609
Boston, Massachusetts 02266-8609

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

<PAGE>

BACK COVER PAGE W/ ART WORK

VISION U.S. GOVERNMENT SECURITIES FUND
CLASS A SHARES

VISION NEW YORK MUNICIPAL INCOME FUND
CLASS A SHARES

VISION HIGH YIELD BOND FUND
CLASS A SHARES

VISION MID CAP VALUE FUND
(formerly Vision Growth & Income Fund)
CLASS A & B SHARES

VISION MID CAP GROWTH FUND
(formerly Vision Capital Appreciation Fund)
CLASS A & B SHARES

VISION LARGE CAP VALUE FUND
(formerly Vision Equity Income Fund)
CLASS A & B SHARES

VISION LARGE CAP GROWTH FUND
CLASS A & B SHARES
Prospectus dated May __, 1999
LOGO

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

Manufacturers And Traders Trust Company
Investment Adviser
A subsidiary of M&T Bank Corporation

92830F406
92830F505
92830F604
92830F703
92830F802
ADD OTHER CUSIPS
PRODUCT CODE(5/99)

RECYCLED LOGO APPEARS HERE

Class A Shares

Vision U.S. Government Securities Fund
Vision New York Municipal Income Fund
Vision High Yield Bond Fund

Class A Shares and Class B Shares

Vision Mid Cap Value Fund
(formerly Vision Growth and Income Fund)
Vision Mid Cap Growth Fund
(formerly Vision Capital Appreciation Fund)
Vision Large Cap Value Fund
(formerly Vision Equity Income Fund)
Vision Large Cap Growth Fund

(Portfolios of Vision Group of Funds, Inc.)

Statement of Additional Information

This Statement of Additional Information (SAI) relates to the prospectus of
seven portfolios of the Vision Group of Funds, Inc., referred to as the Vision
U.S. Government Securities Fund, Vision New York Municipal Income Fund, Vision
High Yield Bond Fund, Vision Mid Cap Value Fund, Vision Mid Cap Growth Fund,
Vision Large Cap Value Fund, and Vision Large Cap Growth Fund (collectively, the
"Funds" or individually, a "Fund").

This SAI is not a prospectus itself, but should be read in conjunction with the
Funds' current prospectus dated May __, 1999. This SAI is incorporated into the
Funds' prospectus by reference. To receive a copy of the prospectus for the
Funds, or a paper copy of this SAI, if you have received it electronically,
write to Vision Funds, Inc., P.O. Box 4556, Buffalo, NY 14240-4556, or call
(800) 836-2211 or (716) 635-9368. Please retain this SAI for future
reference.

Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 1420-4556

Statement of Additional Information dated May __, 1999

MANUFACTURERS AND TRADERS
TRUST COMPANY
Investment Adviser
A subsidiary of M&T Bank Corporation
Federated Securities Corp. is distributor for the Funds.

LOGO

Cusips
92830F406
92830F505
92830F604
92830F703
92830F802

product code (5/99)

<PAGE>

Table of Contents

(to come)

<PAGE>

General Information About the Funds

The Funds are portfolios 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.

Shares of the U.S. Government Securities Fund, New York Municipal Income Fund
and High Yield Fund are offered in one class, Class A Shares. Shares of the Mid
Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large Cap Growth
Fund are offered in two classes, Class A Shares and Class B Shares (individually
and collectively referred to as "Shares" as the context may require). This SAI
relates to both classes of Shares.

Investment Objectives and Policies

The investment objective of each of the Funds cannot be changed without approval
of its shareholders.

The investment objective of Vision U.S. Government Securities Fund (the
"Government Fund") is to provide current income. Capital appreciation is a
secondary investment consideration of the Government Fund. Current income
includes, in general, discount earned on U.S. Treasury bills and agency discount
notes, interest earned on all other U.S. government securities, and short-term
capital gains.

The investment objective of Vision New York Municipal Income Fund (the "NY
Municipal Income Fund") is to provide current income which is exempt from
federal regular income tax and personal income taxes imposed by the State of New
York and New York municipalities and is consistent with the preservation of
capital.

The investment objective of Vision High Yield Bond Fund (the "High Yield Bond
Fund") is to provide high current income. Capital appreciation is a secondary
objective.

The investment objective of Vision Mid Cap Value Fund (the "Mid Cap Value Fund")
is to provide long-term growth of capital and income.

The investment objective of Vision Mid Cap Growth Fund (the "Mid Cap Growth
Fund") is to provide long-term capital appreciation.

The investment objective of Vision Large Cap Value Fund (the "Large Cap Value
Fund") is to provide current income. Capital appreciation is a secondary,
non-fundamental consideration.

The investment objective of Vision Large Cap Growth Fund (the "Large Cap Growth
Fund") is to provide capital appreciation.

Types of Acceptable Investments and Techniques

Municipal Securities
As described in the prospectus, the Government Fund, High Yield Bond Fund, and
the NY Municipal Income Fund may invest in municipal securities. Municipal
securities include debt obligations issued by governmental entities to obtain
funds for various public purposes, including the construction of a wide range of
public facilities, the refunding of outstanding obligations, the payment of
general operating expenses and the extension of loans to public institutions and
facilities. Additionally, industrial development bonds, another type of
municipal security, are issued by or on behalf of public authorities to finance
various privately-operated facilities. The NY Municipal Income Fund may purchase
industrial development bonds if the interest paid thereon is exempt from federal
income tax.

There are, of course, variations in the quality of municipal securities both
within a particular classification and between classifications, and the yields
on municipal securities depend upon a variety of factors, including general
money market conditions, the financial condition of the issuer, general
conditions of the municipal bond market, the size of a particular offering, the
maturity of the obligation and the rating of the issue. The ratings of Moody's
Investors Service Inc. ("Moody's"), Fitch IBCA, Inc. ("Fitch"), and Standard &
Poor's ("S&P") described in the Appendix to the prospectus represent their
opinions as the quality of municipal securities. It should be emphasized,
however, that ratings are general and are not absolute standards of quality, and
municipal securities with the same maturity, interest rate and rating may have
different yields while municipal securities of the same maturity and interest
rate with different ratings may have the same yield. Subsequent to its purchase
by the Funds, an issue of municipal securities may cease to be rated or its
rating may be reduced below the minimum rating required for purchase by the
Funds. Manufacturers and Traders Trust Company ("M&T Bank"), the investment
adviser to the Funds, will consider such an event in determining whether the
Funds should continue to hold the obligations.

The payment of principal and interest on most municipal securities purchased by
the Funds will depend upon the ability of the issuers to meet their obligations.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by federal or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
enforcement of such obligations or upon the ability of municipalities to levy
taxes. The power or ability of an issuer to meet its obligations for the payment
of interest on and principal of its municipal securities may be materially
adversely affected by litigation or other conditions. For purposes of this SAI
and the Government, High Yield Bond and the NY Municipal Income Fund's
prospectus, the District of Columbia, each state, each of their political
subdivisions, agencies, instrumentalities and authorities and each multi-state
agency of which a state is a member is considered to be an "issuer." Further,
the nongovernmental user of facilities financed by industrial development bonds
is considered to be an "issuer." With respect to those municipal securities that
are supported by a bank guarantee, insurance policy or other credit facility,
the bank or other institution (or governmental agency) providing the guarantee,
insurance or credit facility may also be considered to be an "issuer" in
connection with the guarantee, insurance or facility.

Among other types of municipal securities, the Funds may purchase short-term
general obligation notes, tax anticipation notes, bond anticipation notes,
revenue anticipation notes, tax-exempt commercial paper, construction loan notes
and other forms of short-term loans. Such instruments are issued with a
short-term maturity in anticipation of the receipt of tax funds, the proceeds of
bond placements or other revenues. In addition, the Funds may invest in other
types of tax-exempt instruments (taxable with respect to the Government Fund),
such as municipal bonds and industrial development bonds.

Examples of municipal securities which the Government Fund, High Yield Bond
Fund, and the NY Municipal Income Fund (limited to New York municipal
securities) may purchase include:

o governmental lease certificates of participation issued by state or
municipal authorities where payment is secured by installment payments for
equipment, buildings, or other facilities being leased by the state or
municipality. Government lease certificates purchased by the Funds will not
contain nonappropriation clauses;

o municipal notes and tax-exempt commercial paper;

o serial bonds sold with a series of maturity dates;

o tax anticipation notes sold to finance working capital needs of
municipalities in anticipation of receiving taxes;

o bond anticipation notes sold in anticipation of the issuance of long-term
bonds;

o revenue anticipation notes sold in expectation of receipt of federal income
available under the Federal Revenue Sharing Program;

o pre-refunded municipal bonds whose timely payment of interest and principal
is ensured by an escrow of U.S. government obligations; and

o general obligation bonds.

Variable-Rate Municipal Securities
The NY Municipal Income Fund and High Yield Bond Fund may purchase
variable-rate municipal securities. Variable-interest rates generally
reduce changes in the market value of municipal securities from their
original purchase prices. Accordingly, as interest rates decrease or
increase, the potential for capital appreciation or depreciation is less
for variable-rate municipal securities than for fixed-income obligations.
Many municipal securities with variable-interest rates purchased by these
Funds are subject to repayment of principal (usually within seven days) on
the these Funds demand. The terms of these variable-rate demand instruments
require payment of principal and accrued interest from the issuer of the
municipal obligations, the issuer of the participation interests, or a
guarantor of either issuer.

Participation Interests
The NY Municipal Income Fund and High Yield Bond Fund may purchase
municipal securities in the form of participation interests. The financial
institutions from which the Fund purchases participation interests
frequently provide or secure from another financial institution irrevocable
letters of credit or guarantees and give the Fund the right to demand
payment of the principal amounts of the participation interests plus
accrued interest on short notice (usually within seven days).

<PAGE>

Municipal Lease s
The NY Municipal Income Fund and High Yield Bond Fund may purchase
municipal securities in the form of participation interests which represent
undivided proportional interests in lease payments by a governmental or
non-profit entity. The lease payments and other rights under the lease
provide for and secure the payments on the certificates. Lease obligations
may be limited by municipal charter or the nature of the appropriation for
the lease. In particular, lease obligations may be subject to periodic
appropriation. If the entity does not appropriate funds for future lease
payments, the entity cannot be compelled to make such payments.
Furthermore, a lease may provide that the certificate trustee cannot
accelerate lease obligations upon default. The trustee would only be able
to enforce lease payments as they became due. In the event of a default or
failure of appropriation, it is unlikely that the trustee would be able to
obtain an acceptable substitute source of payment.

When determining whether municipal leases purchased by the NY Municipal
Income Fund and High Yield Bond Fund will be classified as a liquid or an
illiquid security, the Board of Directors ("Directors") has directed the
Fund's adviser to consider certain factors such as: the frequency of trades
and quotes for the security; the volatility of quotations and trade prices
for the security; the number of dealers willing to purchase or sell the
security and the number of potential purchasers; dealer undertaking to make
a market in the security; the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of transfer); the rating of
the security and the financial condition and prospects of the issuer of the
security; whether the lease can be terminated by the lessee; the potential
recovery, if any, from a sale of the leased property upon termination of
the lease; the lessee's general credit strength (e.g., its debt,
administrative, economic and financial characteristics and prospects); the
likelihood that the lessee will discontinue appropriating funding for the
lease property because the property is no longer deemed essential to its
operations (e.g., the potential for an "event of nonappropriation"); any
credit enhancement or legal recourse provided upon an event of
nonappropriation or other termination of the lease; and such other factors
as may be relevant to the Fund's ability to dispose of the security.

Illiquid and Restricted Securities
The ability of the 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 Directors consider the following criteria in determining the
liquidity of certain restricted securities:

o the frequency of trades and quotes for the security;

o the number of dealers willing to purchase or sell the security and the
number of other potential buyers;

o dealer undertakings to make a market in the security; and

o the nature of the security and the nature of the marketplace trades.
Investing in Securities of Other Investment Companies

Each of the Funds may invest in the securities of affiliated and unaffiliated
money market funds as an efficient means of managing the Funds' uninvested cash.

Investing in Securities of Other Investment Companies
Each of the Funds may invest in the securities of affiliated and unaffiliated
money market funds as an efficient means of managing the Funds' uninvested cash.

Corporate Debt Securities
Each of the Funds may invest in corporate debt securities. Corporate debt
securities 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 securities, 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.

<PAGE>

Ratings
Except for the High Yield Bond Fund, which is not subject to any minimum rating
category requirement, the corporate debt obligations in which the Government
Fund may invest will be rated at the time of purchase in the top three rating
categories of a nationally recognized statistical rating organization and top
four categories (investment grade) for the other Funds, or if unrated, of
comparable quality as determined by the Fund's adviser. If any security
purchased by a Fund is subsequently downgraded, securities will be evaluated on
a case by case basis by the Fund's adviser. The Fund's 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 Prospectus.

Many of the corporate debt obligations in which the High Yield Bond Fund may
invest may be rated at the time of purchase in the lowest category of investment
grade securities or below (e.g., BBB, BB, B, C or D) and have speculative
characteristics. Bonds rated in these categories are commonly known as "junk
bonds."

Zero Coupon Bonds
The Government Fund, NY Municipal Income Fund, High Yield Bond Fund, Mid Cap
Value Fund, Mid Cap Growth Fund, Large Cap Growth Fund and Large Cap Value Fund
may invest in zero coupon bonds, which are debt securities issued at a discount
to their face amount that do not entitle the holder to any periodic payments of
interest prior to maturity. Rather, interest earned on zero coupon bonds
accretes at a stated yield until the security reaches its face amount at
maturity. Generally, the prices of zero coupon bonds may be more sensitive to
market interest rate fluctuations than conventional debt securities.

Federal income tax law requires the holder of a zero coupon bond to recognize
income from the security prior to the receipt of cash payments. To maintain
their qualification as regulated investment companies and avoid liability of
federal income taxes, the Funds will be required to distribute income accrued
from zero coupon bonds which each Fund owns, and may have to sell portfolio
securities (perhaps at disadvantageous times) in order to generate cash to
satisfy these distribution requirements.

Mortgage-Related Securities
Privately issued mortgage-related securities which the Government Fund, and High
Yield Bond Fund may purchase generally represent an ownership interest in
federal agency mortgage pass-through securities such as those issued by
Government National Mortgage Association. The terms and characteristics of the
mortgage instruments may vary among pass-through mortgage loan pools. The market
for such mortgage-related securities has expanded considerably since its
inception. The size of the primary issuance market and the active participation
in the secondary market by securities dealers and other investors makes
government-related pools highly liquid.

Resets of Interes t
The interest rates paid on the ARMS, CMOs, and REMICs in which the
Government Fund, High Yield Bond Fund, Mid Cap Value Fund, Large Cap Value
Fund and Large Cap Growth Fund may invest generally are readjusted at
intervals of one year or less to an increment over some predetermined
interest rate index. There are two main categories of indices: those based
on U.S. Treasury securities and those derived from a calculated measure,
such as a cost of funds index or a moving average of mortgage rates.
Commonly utilized indices include the one-year and five-year constant
maturity Treasury Note rates, the three-month Treasury Bill rate, the
180-day Treasury Bill rate, rates on longer-term Treasury securities, the
National Median Cost of Funds, the one-month or three-month London
Interbank Offered Rate (LIBOR), the prime rate of a specific bank, or
commercial paper rates. Some indices, such as the one-year constant
maturity Treasury Note rate, closely mirror changes in market interest rate
levels. Others tend to lag changes in market rate levels and tend to be
somewhat less volatile.

To the extent that the adjusted interest rate on the mortgage security
reflects current market rates, the market value of an adjustable rate
mortgage security will tend to be less sensitive to interest rate changes
than a fixed rate debt security of the same stated maturity. Hence,
adjustable rate mortgage securities which use indices that lag changes in
market rates should experience greater price volatility than adjustable
rate mortgage securities that closely mirror the market. Certain residual
interest tranches of CMOs may have adjustable interest rates that deviate
significantly from prevailing market rates, even after the interest rate is
reset, and are subject to correspondingly increased price volatility. In
the event the Fund purchases such residual interest mortgage securities, it
will factor in the increased interest and price volatility of such
securities when determining its dollar-weighted average duration.

<PAGE>

Caps and Floors
The underlying mortgages which collateralize the ARMS, CMOs, and REMICs in
which the Government Fund, High Yield Bond Fund, Mid Cap Value Fund, Large
Cap Value Fund and Large Cap Growth Fund invest will frequently have caps
and floors which limit the maximum amount by which the loan rate to the
residential borrower may change up or down: (1) per reset or adjustment
interval, and (2) over the life of the loan. Some residential mortgage
loans restrict periodic adjustments by limiting changes in the borrower's
monthly principal and interest payments rather than limiting interest rate
changes. These payment caps may result in negative amortization.

The value of mortgage securities in which the Fund invests may be affected
if market interest rates rise or fall faster and farther than the allowable
caps or floors on the underlying residential mortgage loans. Additionally,
even though the interest rates on the underlying residential mortgages are
adjustable, amortization and prepayments may occur, thereby causing the
effective maturities of the mortgage securities in which the Funds invest
to be shorter than the maturities stated in the underlying mortgages.

Lending of Portfolio Securities
The collateral received when the Funds lend portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to a 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 Funds 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
Funds do 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.

Insurance on Municipal Securities
The NY Municipal Income Fund may purchase Policies from MBIA Corp. ("MBIA"),
AMBAC Indemnity Corporation ("AMBAC"), and Financial Guaranty Insurance Company
("FGIC"), or any other municipal bond insurer which is rated Aaa by Moody's or
AAA by S&P. Each Policy guarantees the timely payment of principal and interest
on those municipal securities it insures. The Policies will have the same
general characteristics and features. A municipal security will be eligible for
coverage if it meets certain requirements set forth in a Policy. In the event
interest or principal on an insured municipal security is not paid when due, the
insurer covering the security will be obligated under its Policy to make such
payment not later than 30 days after it has been notified by the NY Municipal
Income Fund that such non-payment has occurred. The insurance feature reduces
financial risk, but the cost thereof and the restrictions on investments imposed
by the guidelines in the insurance policies reduce the yield to shareholders.

MBIA, AMBAC, and FGIC will not have the right to withdraw coverage on securities
insured by their Policies so long as such securities remain in the Fund's
portfolio, nor may MBIA, AMBAC, or FGIC cancel their Policies for any reason
except failure to pay premiums when due. MBIA, AMBAC, and FGIC will reserve the
right at any time upon 90 days' written notice to the NY Municipal Income Fund
to refuse to insure any additional municipal securities purchased by the NY
Municipal Income Fund after the effective date of such notice. The Board of
Directors will reserve the right to terminate any of the Policies if it
determines that the benefits to the NY Municipal Income Fund of having its
portfolio insured under such Policy are not justified by the expense involved.

Additionally, the Directors reserve the right to enter into contracts with
insurance carriers other than MBIA, AMBAC, or FGIC if such carriers are rated
AAA by S&P or Aaa by Moody's.

Under the Policies, municipal bond insurers unconditionally guarantee to the NY
Municipal Income Fund the timely payment of principal and interest on the
insured municipal securities when and as such payments shall become due but
shall not be paid by the issuer, except that in the event of any acceleration of
the due date of the principal by reason of mandatory or optional redemption
(other than acceleration by reason of mandatory sinking fund payments), default
or otherwise, the payments guaranteed will be made in such amounts and at such
times as payments of principal would have been due had there not been such
acceleration. The municipal bond insurers will be responsible for such payments
less any amounts received by the NY Municipal Income Fund from any trustee for
the municipal bond issuers or from any other source. The Policies do not
guarantee payment on an accelerated basis, the payment of any redemption
premium, the value for the Shares of the NY Municipal Income Fund, or payments
of any tender purchase price upon the tender of the municipal securities. The
Policies also do not insure against nonpayment of principal of or interest on
the securities resulting from the insolvency, negligence or any other act or
omission of the trustee or other paying agent for the securities. However, with
respect to small issue industrial development municipal bonds and pollution
control revenue municipal bonds covered by the Policies, the municipal bond
insurers guarantee the full and complete payments required to be made by or on
behalf of an issuer of such municipal securities if there occurs any change in
the tax-exempt status of interest on such municipal securities, including
principal, interest or premium payments, if any, as and when required to be made
by or on behalf of the issuer pursuant to the terms of such municipal
securities. A "when-issued" municipal security will be covered under the
Policies upon the settlement date of the issuer of such "when-issued" municipal
security. In determining whether to insure municipal securities held by the NY
Municipal Income Fund, each municipal bond insurer has applied its own standard,
which corresponds generally to the standards it has established for determining
the insurability of new issues of municipal securities. This insurance is
intended to reduce financial risk, but the cost thereof and compliance with
investment restrictions imposed under the Policies will reduce the yield to
shareholders of the NY Municipal Income Fund.

If a Policy terminates as to municipal securities sold by the NY Municipal
Income Fund on the date of sale, in which event municipal bond insurers will be
liable only for those payments of principal and interest that are then due and
owing, the provision for insurance will not enhance the marketability of
securities held by the NY Municipal Income Fund, whether or not the securities
are in default or subject to significant risk of default, unless the option to
obtain permanent insurance is exercised. On the other hand, since
Issuer-Obtained Insurance will remain in effect as long as the insured municipal
securities are outstanding, such insurance may enhance the marketability of
municipal securities covered thereby, but the exact effect, if any, on
marketability cannot be estimated. The NY Municipal Income Fund generally
intends to retain any securities that are in default or subject to significant
risk of default and to place a value on the insurance, which ordinarily will be
the difference between the market value of the defaulted security and the market
value of similar securities of minimum investment grade (i.e., rated "Baa" by
Moody's or "BBB" by S&P) that are not in default. To the extent that the NY
Municipal Income Fund holds defaulted securities, it may be limited in its
ability to manage its investment and to purchase other municipal securities.
Except as described above with respect to securities that are in default or
subject to significant risk of default, the NY Municipal Income Fund will not
place any value on the insurance in valuing the municipal securities that it
holds.

MBIA Corp.

MBIA Corp. ("MBIA") insures municipal bonds. The address of MBIA is 113
King Street, Armonk, New York, 10504, and its telephone number is (914)
273-4545. As of March 5, 1999, S&P has rated the claims-paying ability of
MBIA "AAA."

AMBAC Indemnity Corporation
AMBAC Indemnity Corporation ("AMBAC") is a wholly-owned subsidiary of
AMBAC, Inc., a financial holding company which is owned by the public.
AMBAC provides financial guarantee insurance, investment and financial
products and health care information services. The Company provides
services to both public and private customers throughout the United States.
The address of AMBAC's administrative offices is One State Street Plaza,
New York, New York 10004, and its telephone number is (212) 668-0340. As of
March 5, 1999, S&P has rated the claims-paying ability of AMBAC "AAA."

Financial Guaranty Insurance Company
Financial Guaranty Insurance Company ("Financial Guaranty") is a
wholly-owned subsidiary of FGIC Corporation, a Delaware holding company.
FGIC Corporation is wholly-owned by General Electric Capital Corporation.
Financial Guaranty insures municipal bonds and certain non-municipal
structured debt obligations. The address of Financial Guaranty is 175 Water
St., New York, New York 10038-4972, and its telephone number is (800)
352-0001. As of March 5, 1999, S&P has rated the claims-paying ability of
Financial Guaranty "AAA."

Futures and Options Transactions
As a means of reducing fluctuations in the net asset value of Shares of the
Funds, each of the Funds may attempt to hedge all or a portion of its portfolios
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 Funds may also write covered call options on portfolio
securities to attempt to increase current income.

Each 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. Each Fund currently does not
intend to invest more than 5% of its total assets in options transactions.

Futures Contracts
The Funds 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 Funds 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, price moves 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, a 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" (agree to purchase
securities in the future at a predetermined price) to hedge against a
decline in market interest rates.

"Margin" In Futures Transactions
Unlike the purchase or sale of a security, a 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 a 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 Funds are also required to deposit and maintain
margin when they write call options on futures contracts.

Each Fund will comply with the following restrictions when purchasing and
selling futures contracts. To the extent required to comply with Commodity
Futures Trading Commission ("CFTC") Regulation 4.5 and thereby avoid status
as a "commodity pool operator," each Fund will not enter into a futures
contract for other than bona fide hedging purposes, or purchase an option
thereon, if immediately thereafter the initial margin deposits for futures
contracts held by it, plus premiums paid by it for open options on futures
contracts, would exceed 5% of the market value of a Fund's net assets,
after taking into account the unrealized profits and losses on those
contracts it has entered into; and, provided further, that in the case of
an option that is in-the-money at the time of purchase, the in-the-money
amount may be excluded in computing such 5%. Second, since a 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. Finally, because each Fund will submit to the CFTC special calls
for information, none of the Funds will register as a commodities pool
operator.

Put Options On Financial and Stock Index Futures Contracts
Each of the Funds may purchase listed put options on financial futures
contracts. The Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value and
Large Cap Growth Fund Fund may also purchase listed put options on stock
index futures contracts. The Funds 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 Funds
will normally close out its option by selling an identical option. If the
hedge is successful, the proceeds received by the Funds upon the sale of
the second option will be large enough to offset both the premium paid by
the Funds for the original option plus the decrease in value of the hedged
securities.

Alternatively, a 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.

<PAGE>

Call Options On Financial and Stock Index Futures Contracts
In addition to purchasing put options on futures, each Fund may write
listed call options on financial futures contracts (and stock index futures
contracts for the Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value
Fund and Large Cap Growth Fund) to hedge its portfolio against an increase
in market interest rates or changes in stock market conditions. When a 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, 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 one of the Funds, 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.

A 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 Funds may purchase put options on portfolio securities to protect
against price movements in particular securities in their portfolios. A put
option gives a 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 Funds may purchase these put options as long as
they are listed on a recognized options exchange and the underlying stocks
are held in its portfolio.

Writing Covered Call Options On Portfolio Securities
A 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, a 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, a 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 a Fund. Conversely, if the underlying security decreases in
price and the option purchaser decides not to carry out the transaction, a
Fund keeps the premium and a Fund can sell the security or hold onto it for
future price appreciation. A 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. The call
options which a Fund writes and sells must be listed on a recognized
options exchange. Writing of call options by a 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 Funds 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 Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and Large
Cap Growth 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 a 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 of 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 these Funds of
options on stock indices will be subject to the ability of M&T Bank 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 Funds use 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 perfectly with the prices of the securities in
a 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 Fund's investment adviser could be incorrect in
its expectations about the direction or extent of market factors such as
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 Fund's
investment 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. A 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 a
Fund's ability to effectively hedge its portfolio.

To minimize risks, each Fund may not purchase or sell futures contracts or
related options, for other than bona fide hedging purposes, 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 after taking into account the
unrealized profits and losses on those contracts it has entered into; and,
provided further, that in the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in computing such
5%. 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 a 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.

Securities of Foreign Issuers
The High Yield Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap
Value Fund and Large Cap Growth 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 governments. 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
adoption of other governmental restrictions, might adversely affect the payment
of principal and interest on securities of foreign issuers. As a matter of
practice, the Funds will not invest in the securities of a foreign issuer if any
risk appears to the Adviser to be substantial.

Short Sales
The Funds may sell securities short from time to time, subject to certain
restrictions. A short sale occurs when a security which a Fund does not own is
sold in anticipation of a decline in its price. If the decline occurs, Shares
equal in number to those sold short can be purchased at the lower price. If the
price increases, the higher price must be paid. The purchased Shares are then
returned to the original lender. Risk arises because no loss limit can be placed
on the transaction. When a Fund enters into a short sale, assets that are equal
to the market price of the securities sold short or any lesser price at which a
Fund can obtain such securities, are segregated on a Fund's records and
maintained until a Fund meets its obligations under the short sale.

No Fund will sell securities short unless (1) it owns, or has a right to
acquire, an equal amount of such securities, or (2) it has segregated an amount
of its other liquid assets equal to the lesser of the market value of the
securities sold short or the amount required to acquire such securities. While
in a short position, the Funds will retain the securities, rights, or segregated
assets.

Warrants
The High Yield Bond Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap
Value Fund and Large Cap Growth 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.

Duration
Duration is a commonly used measure of the potential volatility in the price of
a bond, or other fixed income security, or in a portfolio of fixed income
securities, prior to maturity. Volatility is the magnitude of the change in the
price of a bond relative to a given change in the market rate of interest. A
bond's price volatility depends on three primary variables: the bond's coupon
rate; maturity date; and the level of market yields of similar fixed income
securities. Generally, bonds with lower coupons or longer maturities will be
more volatile than bonds with higher coupons or shorter maturities. Duration
combines these variables into a single measure.

Duration is calculated by dividing the sum of the time-weighted values of the
cash flows of a bond or bonds, including interest and principal payments, by the
sum the present values of the cash flows. When a Fund invests in mortgage
pass-through securities, its duration will be calculated in a manner which
requires assumptions to be made regarding future principal prepayments. A more
complete description of this calculation is available upon request.

Temporary Investments
As stated in the prospectus, the NY Municipal Income Fund may invest a portion
of assets on a temporary basis for temporary purposes in short-term taxable
money market instruments ("Temporary Investments"). Temporary Investments in
which the NY Municipal Income Fund may invest include instruments within the
listed classes. Although the NY Municipal Income Fund has retained the
flexibility of investing up to 20% of its total assets in these Temporary
Investments during non-defensive periods (and greater amounts during temporary
defensive periods), the NY Municipal Income Fund anticipates that it would not
invest more than 5% of its net assets in any one of the classes of temporary
investments.

Money Market Instruments
The Funds may invest in money market instruments such as:

o instruments 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;

o commercial paper rated, at the time of purchase, not less than A-2 by S&P,
Prime-2 by Moody's, or F-2 by Fitch, or if not rated are determined to be
of comparable quality by the Funds' investment adviser (see Appendix to the
Prospectus for a description of the basis of those ratings);

o time 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

o bankers' acceptances.

<PAGE>

When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an advantageous
price or yield for the Funds. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of the Funds sufficient
to make payment for the securities to be purchased are segregated on the Funds'
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled. The Funds do 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 the Funds' assets.

Repurchase Agreements
The Funds 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
Funds 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 Funds or their
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 a 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 Funds believe that under the regular procedures
normally in effect for custody of the Funds' portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor of
the Funds and allow retention or disposition of such securities. The Funds may
only enter into repurchase agreements with banks and other recognized financial
institutions such as broker/dealers which are found by a Fund's adviser to be
creditworthy pursuant to guidelines established by the Board of Directors.

Reverse Repurchase Agreements
The Funds may also enter into reverse repurchase agreements. This transaction is
similar to borrowing cash. In a reverse repurchase agreement, a 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 Funds 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
Funds will be able to avoid selling portfolio instruments at a disadvantageous
time.

When effecting reverse repurchase agreements, liquid assets of a 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.

Portfolio Turnover
The Funds 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
a Fund's investment objective. Securities in its portfolio will be sold whenever
a Fund's investment adviser believes it is appropriate to do so in light of a
Fund's investment objectives, without regard to the length of time a particular
security may have been held. However, the Large Cap Growth Fund will employ tax
management techniques that may result in a lower portfolio turnover rate, as
described in the Prospectus. For the fiscal years ended April 30, 1998 and 1997,
the Government Fund's, NY Municipal Income Fund's, and Mid Cap Value Fund's
portfolio turnover rates were 70% and 121%, 45% and 79%, and 88% and 134%,
respectively. For the fiscal year ended April 30, 1998, and the period from July
3, 1996 (date of initial public investment) to April 30, 1997, the portfolio
turnover rates of the Mid Cap Growth Fund were 86% and 41%. For the period from
September 25, 1997 (date of initial public investment) to April 30, 1998, the
portfolio turnover rate of the Large Cap Value Fund was 11%.

The Mid Cap Value Fund's higher rate of portfolio turnover during the last
fiscal year is the direct result of the repositioning of the portfolio in
companies with better future growth prospects. It is anticipated that the
current turnover rate will moderate.

Investment Limitations

Selling Short and Buying on Margin
The Funds will not sell any securities short nor purchase any securities on
margin, except as described below and other than in connection with buying
financial futures contracts, put options on financial futures, put options on
portfolio securities, 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 Funds of initial or variation margin in connection
with financial futures contracts or related options transactions is not
considered the purchase of a security on margin.

No Fund will sell securities short unless the Fund (1) owns, or has a right to
acquire, an equal amount of such securities, or (2) has segregated an amount of
its other assets equal to the lesser of the market value of the securities sold
short or the amount required to acquire such securities. The segregated amount
will not exceed 25% of the respective Fund's net assets. While in a short
position, each Fund will retain the securities, rights, or segregated assets.

Each Fund may purchase and dispose of U.S. government securities and CMOs before
they are issued and may also purchase and dispose of them on a delayed delivery
basis.

Issuing Senior Securities and Borrowing Money
The Funds will not issue senior securities except that the Funds may borrow
money and engage in reverse repurchase agreements in amounts up to one-third of
the value of their net assets, including the amounts borrowed. The Funds 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 Funds to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Funds will not purchase any securities
while borrowings (including reverse repurchase agreements) in excess of 5% of
their respective total assets are outstanding.

Pledging Assets
The Funds will not mortgage, pledge, or hypothecate any assets except to secure
permitted borrowings. In those cases, the Funds 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 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 activities or the purchase of securities on a when-issued basis.

Underwriting
The Funds 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 their investment objectives, policies,
and limitations.

Investing in Real Estate
The Funds will not purchase or sell real estate including limited partnership
interests although they 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 Funds will not lend any of their assets except portfolio securities, the
market value of which does not exceed one-third of the value of the Funds'
respective total assets. This shall not prevent the Funds 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 Funds' respective investment objectives,
policies, and limitations.

Investing in Commodities
The Funds will not purchase or sell commodities, commodity contracts, or
commodity futures contracts except that the Funds may purchase and sell futures
contracts and related options.

Concentration of Investments
The Funds will not invest 25% or more of the value of their total assets in any
one industry, except that the Government Fund, High Yield Bond Fund, Mid Cap
Value Fund, Mid Cap Growth Fund, Large Cap Value Fund, and Large Cap Growth Fund
and, for temporary defensive purposes, the NY Municipal Income 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.

In addition, the NY Municipal Income Fund may invest more than 25% of the value
of its total assets in obligations issued by any state, territory, or possession
of the United States, the District of Columbia or any of their authorities,
agencies, instrumentalities or political subdivisions.

Diversification of Investments
With respect to securities comprising 75% of the value of its total assets, the
Funds (other than the NY Municipal Income Fund) will not purchase securities
issued by any one issuer (other than cash, cash items, securities of other
investment companies (in the case of High Yield Bond Fund and Large Cap Growth
Fund), 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. Also, the Funds will not
acquire more than 10% of the outstanding voting securities of any one
issuer.

Investing in Exempt-Interest Obligations
The NY Municipal Income Fund will not invest less than 80% of its net assets in
securities the interest on which is exempt from federal regular income tax,
except during temporary defensive periods.

The above investment limitations cannot be changed without shareholder approval.
The following limitation, 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 Restricted and Illiquid Securities
The Funds will not invest more than 15% of the value of their respective net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Directors
non-negotiable time deposits and repurchase agreements providing for settlement
in more than seven days after notice.

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. None of the Funds has any present intent to borrow money in excess
of 5% of the value of its net assets during the coming fiscal year.

For purposes of its policies and limitations, the Funds consider 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."

For purposes of the Funds' concentration policy, the Adviser may classify
issuers by industry based on classifications that distinguish between various
economic characteristics. For instance, the telecommunications industry may be
separated into cable companies, cellular companies and other types of
telecommunications companies, and be regulated or unregulated companies.

New York Investment Risks
The NY Municipal Income Fund invests in obligations of New York (the "State")
issuers which result in the NY Municipal Income Fund's performance being subject
to risks associated with the overall conditions present within the State. The
following information is a general summary of the State's financial condition
and a brief summary of the prevailing economic conditions. This information is
based on various sources that are believed to be reliable but should not be
considered as a complete description of all relevant information.

The State has achieved fiscal balance for the last few years after large
deficits in the middle and late 1980's. Growing social service needs, education
and Medicare expenditures have been the areas of largest growth while prudent
program cuts and increases in revenues through service fees has enabled the
State's budget to remain within balance for the last few years. The State also
benefits from a high level of per capita income that is well above the national
average and from significant amounts of international trade. While the State
still has a large accumulated deficit as a percentage of its overall budget, the
fiscal performance in recent years has demonstrated a changed political
environment that has resulted in realistic revenue and expenditure projections
to achieve financially favorable results. The recent budgets have included
personal income tax cuts and emphasized cost control. Budgets in recent years
have been delayed due to disagreements between the Governor and the New York
State legislature.

New York's economy is large and diverse. While several upstate counties benefit
from agriculture, manufacturing and high technology industries, New York City
nonetheless still dominates the State's economy through its international
importance in economic sectors such as advertising, finance, and banking. The
State's economy has been slow to recover after the late 1980's recession that
resulted in the loss of over 400,000 jobs in the New York City metropolitan area
alone. Any major changes to the financial condition of New York City would
ultimately have an affect on the State.

Obligations of issuers within the State are subject to the provisions of
bankruptcy, insolvency, and other laws affecting the rights of and remedies of
creditors. In addition, the obligations of such issuers may become subject to
laws enacted in the future by the U.S. Congress, state legislators, or referenda
extending the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations, or upon the ability of the
State or its political subdivisions to levy taxes. There is also the possibility
that, as a result of litigation or other conditions (including delays in
adopting budgets), the power or ability of any issuer to pay, when due, the
principal of and interest on its municipal securities may be materially
affected.

A substantial principal amount of bonds issued by various State agencies and
authorities are either guaranteed by the State or supported by the State through
lease-purchase arrangements, or other contractual or moral obligation
provisions. Moral obligation commitments by the State impose no immediate
financial obligations on the State and require appropriations by the legislature
before any payments can be made. Failure of the State to appropriate necessary
amounts or to take other action to permit the authorities and agencies to meet
their obligations could result in defaults on such obligations. If a default
were to occur, it would likely have a significant adverse impact on the market
price of obligations of the State and its authorities and agencies. In recent
years, the State has had to appropriate large amounts of funds to enable State
agencies to meet their financial obligations and, in some cases, prevent
default. Additional assistance is expected to be required in current and future
fiscal years since certain localities and authorities continue to experience
financial difficulties.

To the extent State agencies and local governments require State assistance to
meet their financial obligations, the ability of the state of New York to meet
its own obligations as they become due or to obtain additional financing could
be adversely affected. This financial situation could result not only in
defaults of State and agency obligations but also impairment of the
marketability of securities issued by the State, its agencies and local
governments.

The current ratings on New York State general obligation debt are A-2 by Moody's
and A by S&P.

The NY Municipal Income Fund's concentration in municipal securities issued by
the state and its political subdivisions provides a greater level of risk than a
fund which is diversified across numerous states and municipal entities. The
ability of the state or its municipalities to meet their obligations will depend
on the availability of tax and other revenues; economic, political, and
demographic conditions within the state; and the underlying fiscal condition of
the state, its counties, and its municipalities.

Vision Group of Funds, Inc. Management

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

Randall I. Benderson
570 Delaware Avenue
Buffalo, NY

Birthdate: January 12, 1955

Director

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.; Sevenson Environmental Services,
Inc.; Blue Cross & Blue Shield of Western New York; and Former 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

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.; Vice Chairman, Federated Investors, Inc.; 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.

Beth S. Broderick
Federated Investors Tower
Pittsburgh, PA

Birthdate: August 2, 1965

Vice President and Assistant Treasurer

Assistant Vice President & Client Services Officer, Mutual Fund Services
Division, Federated Services Company.

Victor R. Siclari
Federated Investors Tower
Pittsburgh, PA

Birthdate: November 17, 1961

Secretary

Senior Corporate Counsel and Vice President, Federated Administrative Services;
formerly Attorney, Morrison & Foerster (law firm).

Fund Ownership

As of February 18, 1999, Officers and Directors own less thn 1% of the Funds'
outstanding Shares.

As of February 18, 1999, the following shareholder of record owned 5% or more of
the outstanding Class A Shares of the NY Municipal Income Fund: Tice & Co.,
Buffalo, NY, owned approximately 785,087 Shares (16.45%).

As of February 18, 1999, the following shareholders of record owned 5% or more
of the outstanding Class A Shares of the Mid Cap Value Fund: Reho & Co.,
Buffalo, NY, owned approximately 2,297,845 Shares (29.24%); Krauss & Company,
Buffalo, NY owned approximately 788,456 Shares (10.03%); and Tice & Co.,
Buffalo, NY owned approximately 526,912 Shares (6.71%).

As of February 18, 1999, the following shareholders of record owned 5% or more
of the outstanding Class A Shares of the Government Fund: Krauss & Company,
Buffalo, NY, owned approximately 1,741,058 Shares (25.27%); Reho & Co., Buffalo,
NY, owned approximately 2,312,045 (33.56%); Tice & Co., Buffalo, NY, owned
approximately 1,391,536 Shares (20.19%).

As of February 18, 1999, the following shareholders of record owned 5% or more
of the outstanding Class A Shares of the Mid Cap Growth Fund: Reho & Co.,
Buffalo, NY, owned approximately 1,779,953 Shares (42.90%); and Krauss &
Company, Buffalo, NY, owned approximately 760,135 Shares (18.32%).

As of February 18, 1999, the following shareholders of record owned 5% or more
of the outstanding Class A Shares of the Large Cap Value Fund: Krauss & Company,
Buffalo, NY, owned approximately 1,505,154 Shares (35.99%); Reho & Co., Buffalo,
NY, owned approximately 1,007,999 Shares (24.11%); and Tice & Co., Buffalo, NY,
owned approximately 474,221 Shares (11.34%).

Directors' Compensation

Aggregate
Name, Compensation
Position With From
Corporation Corporation*#

Randall I. Benderson, Director $7,500

Joseph J. Castiglia, Director $8,500

Daniel R. Gernatt, Jr., Director $8,500

George K. Hambleton, Jr., Director $8,500

*Information is furnished for the fiscal year ended April 30, 1998. The
Corporation is the only investment company in the Fund Complex.

#The aggregate compensation is provided for the Corporation which is comprised
of ten 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 Funds
Investment advisory services are provided to the Funds 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 Funds' 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 Funds 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 a 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
as described in the Prospectus.

For the fiscal years ended April 30, 1998, 1997, and 1996, for the Government
Fund, NY Municipal Income Fund and Mid Cap Value Fund, M&T Bank earned advisory
fees of $378,409, $258,550, and $227,041; $279,035, $234,511, and $209,254; and
$968,660, $308,825, and $102,300 respectively, of which $45,997, $61,752, and
$48,652; $117,123, $115,657, and $91,153; and $0, $0, and $541, respectively,
were voluntarily waived.

In addition, for the fiscal years ended April 30, 1998, 1997, and 1996, for the
Government Fund, NY Municipal Income Fund, and Mid Cap Value Fund, M&T Bank
reimbursed $0, $0, and $0; $0, $0, and $0; and $0, $0, and $0, respectively, of
other operating expenses.

For the fiscal year ended April 30, 1998, and the period from July 3, 1996 (date
of initial public investment) to April 30, 1997, for the Mid Cap Growth Fund,
M&T Bank earned advisory fees of $453,674 and $137,485, of which $0 and $63,215
were voluntarily waived. In addition, for the fiscal year ended April 30, 1998,
and the period from July 3, 1996 (date of initial public investment) to April
30, 1997, for the Mid Cap Growth Fund, M&T Bank reimbursed $0 and $67,000 of
other operating expenses.

For the period from September 25, 1997 (date of initial public investment) to
April 30, 1998, for the Large Cap Value Fund, M&T Bank earned advisory fees of
$83,847, of which $53,453 was voluntarily waived. In addition, for the period
from September 25, 1997 (date of initial public investment) to April 30, 1998,
for the Large Cap Value Fund, M&T Bank reimbursed $0 of other operating
expenses.

Prior to January 1, 1997, Harbor Capital Management ("Harbor") served as the Mid
Cap Value Fund's sub-adviser. For the fiscal year ended April 30, 1996, Harbor
earned $255,750. For the period from April 30, 1996 to December 31, 1996, Harbor
earned $297,904.

Other Services

Administrative Services
Federated Administrative Services ("FAS"), a subsidiary of Federated Investors,
Inc., provides administrative personnel and services to the Funds. Federated
Services Company provides the Funds with certain financial, administrative,
transfer agency and Fund accounting services. These services are provided for an
aggregate annual fee as described in the Prospectus. For the period from
December 1, 1997 to April 30, 1998, the Government Fund, NY Municipal Income
Fund, Mid Cap Value Fund, Mid Cap Growth Fund and Large Cap Value Fund incurred
costs for administrative services of $33,699; $23,384; $78,952; $35,341; and
$12,991, respectively.

Prior to December 1, 1997, FAS was paid by the Funds based on the following fee
schedule:

- ---------------------------- ---------------------------------------------------
Maximum Administrative Fee Aggregate Daily Net Assets of the Corporation
- ---------------------------- ---------------------------------------------------
0.150% on the first $250 million
0.125% on the next $250 million
0.100% on the next $250 million
0.075% on asset in excess of $750 million
- ---------------------------- ---------------------------------------------------
The minimum administrative fee received during any year was $50,000 per Fund.

For the period from May 1, 1997 to November 30, 1997, and the fiscal years ended
April 30, 1997, and 1996, the Government Fund, NY Municipal Income Fund, and Mid
Cap Value Fund incurred costs for administrative services of $30,378, $50,000,
and $49,999; $29,317, $50,000, and $50,001; $81,883, $90,371, and $58,037;,
respectively, of which $571, $11,168, and $9,295; $6,213, $14,660, and $10,672;
and $0, $0, and $0, respectively, were voluntarily waived.

For the period from May 1, 1997 to November 30, 1997, and the period from July
3, 1996 (date of initial public investment) to April 30, 1997, the Mid Cap
Growth Fund incurred costs for administrative services of $30,516, and $41,371,
of which $2,685 and $24,932, were voluntarily waived. For the period from
September 25, 1997 (date of initial public investment) to November 30, 1997, the
Large Cap Value Fund incurred costs for administrative services of $8,630, of
which $8,630, was voluntarily waived.

Custodian and Portfolio Accountant
State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Funds. Federated
Services Company, Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
provides certain accounting and recordkeeping services with respect to the
Funds' portfolio investments.

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company, Pittsburgh, Pennsylvania, the Funds'
registered transfer agent, maintains all necessary shareholder records.

<PAGE>

Independent Auditors
The independent auditors for the Funds are Ernst & Young LLP, Pittsburgh,
Pennsylvania.

Brokerage Transactions

Pursuant to the Funds' advisory agreement, 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 Funds 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, a 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 Funds 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.

The Funds will not execute portfolio transactions through, acquire portfolio
securities issued by, make savings deposits in, or enter into repurchase or
reverse repurchase agreements with M&T Bank, or its affiliates, and will not
give preference to M&T Bank's correspondents with respect to such transactions,
securities, savings deposits, repurchase agreements and reverse repurchase
agreements. While serving as investment adviser to the Funds, M&T Bank has
agreed to maintain its policy and practice of conducting its Capital Advisers
and Trust Groups independently of its Commercial Department.

The Funds' advisory agreement provides that, in making investment
recommendations for the Funds, Capital Advisers and Trust Groups personnel will
not inquire or take into consideration whether the issuer of securities proposed
for purchase or sale by the Funds is a customer of the Commercial Department
and, in dealing with its commercial customers, the Commercial Department will
not inquire or take into consideration whether securities of such customers are
held by the Funds.

Although investment decisions for the Funds are made independently from those of
the other accounts managed by M&T Bank, investments of the type the Funds may
make may also be made by those other accounts. When the Funds and one or more
other accounts managed by M&T Bank 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 M&T Bank to be equitable to each. In
some cases, this procedure may adversely affect the price paid or received by
the Funds or the size of the position obtained or disposed of by the Funds. In
other cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Funds.

For the fiscal years ended April 30, 1998, 1997, and 1996, the Government Fund
and NY Municipal Income Fund paid no brokerage commissions on brokerage
transactions.

For the fiscal years ended April 30, 1998, 1997, and 1996, the Mid Cap
Value Fund paid $259,177, $304,622, and $128,098, respectively, in commissions
on brokerage transactions.

For the fiscal year ended April 30, 1998, and the period from July 3, 1996 (date
of initial public investment) to April 30, 1997, the Mid Cap Growth Fund paid
brokerage commissions in the amount of $113,127 and $62,973, respectively.

For the period from September 25, 1997 (date of initial public investment) to
April 30, 1998, the Large Cap Value Fund paid brokerage commissions in the
amount of $46,309.

<PAGE>

Description of Fund Shares

The Corporation's Articles of Incorporation authorize the Board of Directors to
issue up to thirty billion full and fractional Shares of Common Stock, of which
twenty billion Shares have been classified into sixteen classes. Ten billion
Shares remain unclassified at this time. Authorized classes of Shares for each
Fund and amounts are as follows:

- ----------------------------------------------------- --------------------------
Fund Name Authorized Class and Amount
- ----------------------------------------------------- --------------------------
Vision Money Market Fund 2 billion Class A Shares
2 billion Class S Shares
Vision Treasury Money Market Fund 2 billion Class A Shares
2 billion Class S Shares
Vision New York Tax-Free Money Market Fund 1 billion Class A Shares
Vision U.S. Government Securities Fund 1 billion Class A Shares
Vision New York Municipal Income Fund 1 billion Class A Shares
Vision High Yield Bond Fund 1 billion Class A Shares
Vision Mid Cap Value Fund 1 billion Class A Shares
1 billion Class B Shares
Vision Mid Cap Growth Fund 1 billion Class A Shares
1 billion Class B Shares
Vision Large Cap Value Fund 1 billion Class A Shares
1 billion Class B Shares
Vision Large Cap Growth Fund 1 billion Class A Shares
1 billion Class B Shares
- ----------------------------------------------------- -------------------------

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 of Directors may grant in its discretion. When
issued for payment as described in the Funds' Prospectus and this SAI, the
Funds' 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 respective
Shares of a 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 or class of Shares 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
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 also 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. All Shares of all classes of each Fund in the Corporation have equal
voting rights, except in matters affecting only a particular Fund or class of
Shares, only Shares of that Fund or class of Shares are entitled to vote.

Notwithstanding any provision of Maryland law requiring a greater vote of the
Corporation's 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 Funds are sold at net asset value (plus a sales charge on Class A
Shares only) on days on which the New York Stock Exchange and the Federal
Reserve wire system are open for business. The procedures for purchasing Shares
of the Funds are explained in the Funds' prospectus under "How to Buy
Shares."

Conversion to Federal Funds
It is the Funds' policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. M&T Bank and State Street Bank
act as the shareholders' agents in depositing checks and converting them to
federal funds.

Conversion of Class B Shares
Class B Shares will automatically convert into Class A Shares on or around the
15th of the month eight full years from the purchase date. For purposes of
conversion to Class A Shares, Shares purchased through the reinvestment of
dividends and distributions paid on Class B Shares will be considered to be held
in a separate sub-account. Each time any Class B Shares in the shareholder's
account (other than those in the sub-account) convert to Class A Shares, an
equal pro rata portion of the Class B Shares in the sub-account will also
convert to Class A Shares. The conversion of Class B Shares to Class A Shares is
subject to the continuing availability of a ruling from the Internal Revenue
Service or an opinion of counsel that such conversions will not constitute
taxable events for federal tax purposes. There can be no assurance that such
ruling or opinion will be available, and the conversion of Class B Shares to
Class A Shares will not occur if such a ruling or opinion is not available. In
such event, Class B Shares would continue to be subject to higher expenses than
Class A Shares for an indefinite period.

Determining Market Value Of Securities

The market value of the Funds' portfolio securities are determined as follows:

o for bond and other fixed income securities, as determined by an independent
pricing service; or

o for equity securities, according to the last sales price on a national
securities exchange, if applicable; or

o in the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices; or

o for bond and other fixed income securities, as determined by an independent
pricing service; or

o for 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

o for 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 Funds will value futures contracts, options and put options on financial
futures at their market values established by the exchanges at the close of
option trading on such exchanges, unless the Directors determine in good faith
that another method of valuing option positions is necessary.

Redeeming Fund Shares

The Funds redeem Shares at the next computed net asset value (less any
applicable contingent deferred sales charge on Class B Shares only) after a Fund
receives the redemption request. Redemption procedures are explained in the
prospectus under "How to Redeem Shares." Although State Street Bank does not
charge for telephone redemptions, it reserves the right to charge a fee for the
cost of wire-transferred redemptions of less than $5,000.

Redemption in Kind
Although the Funds intend to redeem Shares in cash, they reserve the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from a 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.

Exchanging Securities For Fund Shares
The Funds may accept securities in exchange for Fund Shares. The Funds 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 a Fund
and must have a readily ascertainable market value. 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 Funds. The Funds acquire 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 Funds, 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.

Determining Net Asset Value

Net asset value generally changes each day. The days on which net asset value is
calculated for Shares of the Funds are described in the prospectus.

Banking Laws

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 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 Corporation's Board of
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.

Tax Status

The Funds' Tax Status
The Funds will pay no federal income tax because they expect 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:

o derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;

o invest in securities within certain statutory limits; and

o distribute to its shareholders at least 90% of its net income earned during
the year.

Corporate Shareholder Information
In the case of a corporate shareholder, dividends of the Fund which represent
interest on municipal bonds will become subject to the 20% corporate alternative
minimum tax because the dividends are included in a corporation's "adjusted
current earnings." The corporate alternative minimum tax treats 75% of the
excess of a taxpayer's pre-tax "adjusted current earnings" over the taxpayer's
alternative minimum taxable income as a tax preference item. "Adjusted current
earnings" is based upon the concept of a corporation's "earnings and profits."
Since "earnings and profits" generally includes the full amount of any Fund
dividend, and alternative minimum taxable income does not include the portion of
the Fund's dividend attributable to municipal obligation bonds, which are not
private activity bonds, the difference will be included in the calculation of
the corporation's alternative minimum tax.

Shareholders' Tax Status
No portion of any income dividend paid by the Funds is eligible for the
dividends received deduction available to corporations. These dividends (to the
extent taxable), and any short-term capital gains, are taxable as ordinary
income.

Net income for dividend purposes includes (1) interest and dividends accrued and
discount earned on a Fund's assets (including both original issue and market
discount), less (2) amortization of any premium and accrued expenses directly
attributable to such Fund, and the general expenses (e.g. legal, accounting and
directors' fees) of the Corporation prorated to each Fund on the basis of its
relative net assets.

Capital Gains
Capital gains experienced by a Fund could result in an increase in
dividends. Capital losses could result in a decrease in dividends. If for
some extraordinary reason a Fund realizes net long-term capital gains, it
will distribute them at least once every 12 months.

Total Return

The Government Fund's (Class A Shares') average annual total returns for the
one-year period ended April 30, 1998, and for the period from September 22, 1993
(date of initial public investment) to April 30, 1998, were 5.42% and 4.24%,
respectively.

The NY Municipal Income Fund's (Class A Shares') average annual total returns
for the one-year period ended April 30, 1998, and for the period from September
22, 1993 (date of initial public investment) to April 30, 1998, were 3.54% and
4.69%, respectively.

The Mid Cap Value Fund's (Class A Shares') average annual total returns for the
one-year period ended April 30, 1998 and for the period from November 29, 1993
(date of initial public investment) to April 30, 1998, were 24.17% and 17.52%,
respectively.

The Mid Cap Growth Fund's (Class A Shares') average annual total return for the
one-year period ended April 30, 1998 and for the period from July 3, 1996 (date
of initial public investment) to April 30, 1998, were 32.31% and 25.22%,
respectively.

The Large Cap Value Fund's (Class A Shares') cumulative total return for the
period from September 25, 1997 (date of initial public investment) to April 30,
1998, was 9.17%.

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 Large Cap Value Fund's total return is representative
of only seven months of investment activity since the Fund's effective date.

The average annual total return for the Shares 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 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, adjusted over the period by any additional
Shares, assuming the monthly reinvestment of all dividends and
distributions.

Yield

The yields for the (Class A Shares of) Government Fund, NY Municipal Income
Fund, Mid Cap Value Fund, Mid Cap Growth Fund, and Large Cap Value Fund for the
thirty-day period ended April 30, 1998, were 5.22%, 4.00%, 0.60%, 0.00%, and
1.55%, respectively.

The yield for the Funds 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 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.

To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in a Fund,
the performance will be reduced for those shareholders paying those fees.

Tax-Equivalent Yield

The tax-equivalent yield for the (Class A Shares of) NY Municipal Income Fund
for the thirty-day period ended April 30, 1998, was 6.14%. The tax-equivalent
yield of the NY Municipal Income Fund is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a combined federal and state marginal tax rate
of 34.850%.

Tax-Equivalency Table
The NY Municipal Income Fund may also use a tax-equivalency table in advertising
and sales literature. The interest earned by the municipal obligations in the NY
Municipal Income Fund's portfolio generally remains free from federal income
tax,* and often is free from state and local taxes as well. As the following
table indicates, a "tax-free" investment is an attractive choice for investors,
particularly in times of narrow spreads between tax-free and taxable yields.

Taxable Yield Equivalent for 1999 - STATE OF NEW YORK

Tax Bracket:
Federal 15.00% 28.00% 31.00% 36.00% 39.60%

Combined Federal and State 21.850% 34.850% 37.850% 42.850% 46.450%
- ----------------------------------------------------------------------------------------------------------------------
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150 Over 283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150 Over 283,150
Tax Exempt Yield: Taxable Yield Equivalent:
1.50% 1.92% 2.30% 2.41% 2.62% 2.80%
2.00% 2.56% 3.07% 3.22% 3.50% 3.73%
2.50% 3.20% 3.84% 4.02% 4.37% 4.67%
3.00% 3.84% 4.60% 4.83% 5.25% 5.60%
3.50% 4.48% 5.37% 5.63% 6.12% 6.54%
4.00% 5.12% 6.14% 6.44% 7.00% 7.47%
4.50% 5.76% 6.91% 7.24% 7.87% 8.40%
5.00% 6.40% 7.67% 8.05% 8.75% 9.34%
5.50% 7.04% 8.44% 8.85% 9.62% 10.27%
6.00% 7.68% 9.21% 9.65% 10.50% 11.20%
</TABLE>

Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent. Furthermore, additional state and
local taxes paid on comparable taxable investments were not used to increase
federal deductions. Performance Comparisons

The performance of Shares of the Funds depends upon such variables as:

o portfolio quality;

o average portfolio maturity;

o type of instruments in which the portfolio is invested;

o changes in interest rates and market value of portfolio securities;

o changes in a Fund's expenses; and

o various other factors.

The Funds' performances fluctuate 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 each 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 Funds use in advertising may include:

o Lipper 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 Government Fund and the NY Municipal Income
Fund will quote their Lipper rankings in the "General U.S. Government
Funds" and the "New York Municipal Bond Funds" categories, respectively, in
advertising and sales literature. (All Funds)

o Dow 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. (Mid Cap Value Fund, Mid Cap Growth Fund,
Large Cap Value Fund and Large Cap Growth Fund)

o Lehman Brothers Government (LT) Index is an index composed of bonds issued
by the U.S. government or its agencies which have at least $1 million
outstanding in principal and which have maturities of ten years or longer.
Index figures are total return figures calculated monthly. (Government
Fund)

o Lehman Brothers Government/Corporate Total Index is comprised of
approximately 5,000 issues which include non-convertible bonds publicly
issued by the U.S. government or its agencies; corporate bonds guaranteed
by the U.S. government and quasi-federal corporations; and publicly issued,
fixed-rate, non-convertible domestic bonds of companies in industry, public
utilities, and finance. Tracked by Lehman Brothers, the index has an
average maturity of nine years. It calculates total returns for one month,
three months, twelve months, and ten year periods, and year-to-date.
(Government Fund and High Yield Bond Fund)

o Lehman Brothers Aggregate Bond Index is a total return index measuring both
the capital price changes and income provided by the underlying universe of
securities, weighted by market value outstanding. The Aggregate Bond Index
is comprised of the Lehman Brothers Government Bond Index, Corporate Bond
Index, Mortgage-Backed Securities Index and the Yankee Bond Index. These
indices include: U.S. Treasury obligations, including bonds and notes; U.S.
agency obligations, including those of the Farm Credit System, including
the National Bank for Cooperatives and Banks for Cooperatives; foreign
obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. All corporate debt included in the Aggregate Bond Index has a
minimum rating of BBB by S&P or Fitch, or a minimum rating of Baa by
Moody's. (Government Fund and High Yield Bond Fund)

o Merrill Lynch Corporate And Government Index includes issues which must be
in the form of publicly placed, nonconvertible, coupon-bearing domestic
debt and must carry a term of maturity of at least one year. Par amounts
outstanding must be no less than $10 million at the start and at the close
of the performance measurement period. Corporate instruments must be rated
by S&P or by Moody's as investment grade issues (i.e., BBB/Baa or better).
(Government Fund and High Yield Bond Fund)

o Merrill Lynch Domestic Master Index includes issues which must be in the
form of publicly placed, nonconvertible, coupon-bearing domestic debt and
must carry a term to maturity of at least one year. Par amounts outstanding
must be no less than $10 million at the start and at the close of the
performance measurement period. The Domestic Master Index is a broader
index than the Merrill Lynch Corporate and Government Index and includes,
for example, mortgage related securities. The mortgage market is divided by
agency, type of mortgage and coupon and the amount outstanding in each
agency/type/coupon subdivision must be no less than $200 million at the
start and at the close of the performance measurement period. Corporate
instruments must be rated by S&P or by Moody's as investment grade issues
(i.e., BBB/Baa or better). (Government Fund and High Yield Bond Fund)

o Salomon Brothers AAA-AA Corporate Index calculates total returns of
approximately 775 issues which include long-term, high grade domestic corporate
taxable bonds, rated AAA-AA with maturities of twelve years or more and
companies in industry, public utilities, and finance. (Government Fund)

o Salomon Brothers Long-Term High Grade Corporate Bond Index is an unmanaged
index of long-term high grade corporate bonds issued by U.S. corporations
with maturities ranging from 10 to 20 years.

o Lehman Brothers Intermediate Government/Corporate Bond Index is an
unmanaged index comprised of all the bonds issued by the Lehman Brothers
Government/Corporate Bond Index with maturities between 1 and 9.99 years.
Total return is based on price appreciation/depreciation and income as a
percentage of the original investment. Indices are rebalanced monthly by
market capitalization. (Government Fund)

<PAGE>

The Salomon Brothers Total Rate-of-Return Index for mortgage pass-through
securities reflects the entire mortgage pass-through market and reflects their
special characteristics. The index represents data aggregated by mortgage pool
and coupon within a given sector. A market-weighted portfolio is constructed
considering all newly created pools and coupons. (Government Fund)

o The Merrill Lynch Taxable Bond Indices include U.S. Treasury and agency
issues and were designed to keep pace with structural changes in the fixed
income market. The performance indicators capture all rating changes, new
issues, and any structural changes of the entire market. (Government Fund)

o Lehman Brothers Government Index is an unmanaged index comprised of all
publicly issued, non-convertible domestic debt of the U.S. government, or
any agency thereof, or any quasi-federal corporation and of corporate debt
guaranteed by the U.S. government. Only notes and bonds with a minimum
outstanding principal of $1 million and a minimum maturity of one year are
included. (Government Fund)

o Standard & 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. (Mid Cap Value Fund, Mid Cap
Growth Fund, Large Cap Value Fund and Large Cap Growth Fund)

o S&P/Barra Large Value Index and S&P/Barra Large Growth Index are
constructed by sorting the S&P 500 based on their price/book ratios, with
the low price/book companies forming the value index and the high
price/book companies making up the growth index.

o Russell 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. (Mid Cap Growth Fund)

o Russell 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. (Mid Cap Value Fund and
Mid Cap Growth Fund)

o Wilshire 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. (Mid Cap Value Fund and Mid
Cap Growth Fund)

o Consumer Price Index is generally considered to be a measure of
inflation. (Mid Cap Value Fund, Mid Cap Growth Fund, Large Cap Value Fund and
Large Cap Growth Fund)

o New 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. (Mid Cap Value Fund, Mid Cap
Growth Fund Large Cap Value Fund and Large Cap Growth Fund)

o Value 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. (Mid Cap Value Fund, Mid
Cap Growth Fund Large Cap Value Fund and Large Cap Growth Fund)

o NASDAQ 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. (Mid Cap Value
Fund and Mid Cap Growth Fund)

o AMEX 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. (Mid Cap Value Fund and Mid Cap Growth Fund)

o Lehman Brothers New York Tax-Exempt Index is a total return performance
benchmark for the New York long-term, investment grade, tax-exempt bond
market. Returns and attributes for this index are calculated semi-monthly
using approximately 22,000 municipal bonds classified as general obligation
bonds (state and local), revenue bonds (excluding insured revenue bonds),
insured bonds (includes all bond insurers with Aaa/AAA ratings), and
prerefunded bonds. (NY Municipal Income Fund)

o Morningstar, 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. (All Funds)

Advertising and other promotional literature may include charts, graphs and
other illustrations using the Funds' returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Funds can
compare their performance, or performance for the types of securities in which
it invests, to a variety of other investments, such as federally insured bank
products, including time deposits, 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 Funds are not insured. Unlike money market
funds, which attempt to maintain a stable net asset value, the net asset value
of the Funds' 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 Funds 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 Funds' portfolio managers and their views and analysis on
how such developments could affect the Funds. 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,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available.

Financial Statements

The financial statements for the fiscal year ended April 30, 1998 are
incorporated herein by reference to the Funds' Annual Report dated April 30,
1998 and the un-audited financial statements for the six-month reporting period
ended October 31, 1998 are incorporated herein by reference to the Funds'
Semi-Annual Report dated October 31, 1998. (File Nos. 33-20673 and 811-5514).
Free copies of the Annual Report and Semi-Annual Report will proceed or
accompany this SAI.

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:

(a) Financial Statements. Incorporated by reference to the
Registrant's Annual Report dated April 30, 1998 and Semi-Annual
Report dated October 31, 1998.

(b) Exhibits:
(1) (i) Conformed copy of Amended Articles of Incorporation of
the Registrant; 21
(ii) Conformed copy of Articles Supplementary; 8
(iii) Conformed copy of Articles Supplementary dated
May 29, 1996; 15
(iv) Conformed copy of Articles Supplementary dated April 20, 1998; 21
(v) Form of Articles of Amendment effective May 1, 1999; +
(vi) Form of Articles Supplementary effective May 1, 1999; +
(2) (i) Copy of By-Laws of the Registrant; 11
(ii) Copy of Amendment No. 1 to Bylaws; 21
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of Capital
Stock of the Registrant; 8
(ii) Copy of Specimen Certificate for Shares of Capital
Stock of the Vision Capital Appreciation Fund; 15
(5) (i) Conformed copy of Investment Advisory Contract of the
Registrant; 9
(ii) Conformed copy of Subadvisory Agreement for the Vision New York Tax-Free
Money Market Fund; +
(iii) Conformed copy of Exhibit B to Investment Advisory
Contract; 14
(iv) Conformed copy of Exhibit C to Investment Advisory .....Contract; 19
(v) Conformed copy of Investment Advisory Contract for the Vision New York
Tax-Free Money Market Fund including Exhibit A; +
(vi) Form of Exhibit D to the Investment Advisory ..Contract; +
(vii) Form of Exhibit E to the Investment Advisory ...........Contract; +

+ 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)

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)

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)

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed December 20, 1996. (File Nos. 33-20673
and 811-5514)

19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed September 24, 1997 (File Nos. 33-20673
and 811-5514)

21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed April 22, 1998 (File Nos. 33-20673 and
811-5514)

(6) (i) Conformed copy of Distributor's Contract of the
Registrant; 9 (ii) Conformed copy of Exhibit C to
Distributor's Contract; 14 (iii) Conformed copy of
Exhibit D to the Distributor's Contract; 20
(iv) Conformed copy of Exhibit E to the Distributor's Contract; 22
(v) Form of Exhibit F to the Distributor's Contract; +
(vi) Form of Exhibit G to the Distributor's Contract; +
(vii) Conformed copy of Administrative Services
Agreement of the Registrant; 9 (viii) Conformed copy of
Shareholder Services Plan of Registrant; 9 (ix)
Conformed copy of Exhibit A to Amended and Restated
Shareholder Services Plan; 22 (x) Conformed copy of
Amended and Restated Shareholder Services Agreement; 13
(xi) Copy of Amendment No. 1 to Exhibit A to
Shareholder Services Agreement; 14
(xii) Copy of Amendment No. 2 to Exhibit A to Shareholder Services
Agreement; 18
(xiii) Form of Amendment #1 to Amended and Restated ..Shareholder
Services Plan; +
(xiv) Form of Amendment No. 1 (dated May 1, 1999) to Exhibit A to
Shareholder Services Agreement; +
(7) Not applicable;

+ All Exhibits have been filed electronically.

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)

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)

18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed August 6, 1997. (File Nos. 33-20673 and
811-5514)

20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed December 22, 1997. (File Nos. 33-20673
and 811-5514)

22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed July 8, 1988. (File Nos. 33-20673 and
811-5514)

<PAGE>

(8) (i) Conformed copy of Custodian Agreement of the Registrant; 12
(ii) Copy of Amendment No. 2 to Exhibit A to
Custodian Contract; 14
(iii) Copy of Amendment No. 3 to Exhibit A to Custodian Contract; 18
(iv) Conformed copy of State Street Domestic Custody Fee Schedule; 20
(v) Form of Amendment No. 4 to Exhibit A to Custodian Contract; +
(9) (i) Conformed copy of Agreement for Fund Accounting
Services and Transfer Agency Services; 16 (ii) Copy of Exhibit 1 to Agreement
for Fund Accounting Services and Transfer Agency Services; 18 (iii) Conformed
copy of Amendment to Administrative Services Agreement and the Agreement for
Fund Accounting Services and Transfer
Agency Services; 20
(iv) Conformed copy of Amendment No. 1 to Exhibit 1 to Agreement for Fund
Accounting Services and Transfer Agency Services; 22 (v) Form of Amendment #2 to
Exhibit 1 to the Agreement for Fund Accounting Services and Transfer Agency
Services; + (vi) Conformed copy of Recordkeeping Agreement including exhibits
A-C; + (vii) Form of Amendment #1 to Exhibit A to the Recordkeeping Agreement; +
(viii) Conformed copy of Sub-Transfer Agency Agreement; + (ix) Form of Amendment
No. 1 to Exhibit A of the Sub-Transfer Agency Agreement; +
(10) Conformed copy of Opinion and Consent of Counsel as
to legality of shares being registered; 11
(11) Conformed copy of Consent of Independent Auditors; +
(12) Not applicable;
(13) Conformed copy of Initial Capital Understanding; 11
(14) Not applicable;

- ----------------------------------
+ All Exhibits have been filed electronically.

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)

16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed June 20, 1997. (File Nos. 33-20673 and
811-5514)

18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed August 6, 1997. (File Nos. 33-20673 and
811-5514)

20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed December 22, 1997. (File Nos. 33-20673
and 811-5514)

22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed July 8, 1988. (File Nos. 33-20673 and
811-5514)

<PAGE>

(15) (i) Copy of Rule 12b-1 Plan; 7
(ii) Conformed copy of Exhibit B to Rule 12b-1 Plan; 14
(iii) Conformed copy of Exhibit C to Rule 12b-1 Plan; 20
(iv)Conformed copy of Exhibit D to Rule 12b-1
Agreement;22 (v) Copy of Rule 12b-1 Agreement; 7 (vi)
Copy of Exhibit B to Rule 12b-1 Agreement; 14 (vii)
Copy of Exhibit C to Rule 12b-1 Agreement; 18 (viii)
Amended and Restated Plan with conformed copy of
Exhibit D; 22
(ix) Copy of Dealer (Sales) Agreement; 7
(x) Copy of Class B Shares 12b-1 Plan; +
(xi) Form of Exhibit A to the Class B Shares 12b-1 Plan; +
(16) (i) Copy of Schedule for Computation of Fund Performance Data; 12
(ii) Copy of Schedule for Computation of Fund Performance Data for
the Vision Capital Appreciation Fund; 15
(iii) Copy of Schedule for Computation of Fund Performance Data for
the Vision Equity Income Fund; 20
(17) Copy of Financial Data Schedules;+
(18) (i) Conformed copy of the Registrant's Multiple Class Plan with conformed
copies of Exhibits A and B;22
(ii) Form of Exhibit C to the Multiple Class Plan; + (iii) Form of Exhibit D to
the Multiple Class Plan; +
(19) Conformed copy of Power of Attorney; 14

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

- ----------------------------------
+ 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)

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)

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed December 20, 1996. (File Nos. 33-20673
and 811-5514)

18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed August 6, 1997. (File Nos. 33-20673 and
811-5514)

20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed December 22, 1997. (File Nos. 33-20673
and 811-5514)

22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed July 8, 1988. (File Nos. 33-20673 and
811-5514)

<PAGE>

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class as of February 18, 1999
-------------- -------------------------

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

Vision Money Market Fund
Class A Shares 16,196
Class S Shares 116
Vision New York Tax-Free Money Market Fund 592
Vision Treasury Money Market Fund
Class A Shares 886
Class S Shares 140
Vision U.S. Government Securities Fund 934
Vision New York Municipal Income Fund 1,466
Vision Growth and Income Fund 7,190
Vision Capital Appreciation Fund 3,967
Vision Equity Income Fund 1,463

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 M&T Bank Corporation, a
$20.6 billion bank holding company, as of December 31, 1998,
headquartered in Buffalo, New York. As of December 31, 1998,
M&T Bank over 247 offices throughout New York State,
Pennsylvania and an office in 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 and
Pennsylvania. As of December 31, 1998, M&T Bank had over $4.5
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,
1998, M&T Bank managed $1.51 billion 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 principal executive Officers and the 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.
- ---------------------

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)

<PAGE>

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

William F. Allyn Director President, Welch Allyn, Inc.
P.O. Box 50
Skaneateles Falls, NY 13153-0050

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

Robert J. Bennett Director and Chairman, M&T Bank
P.O. Box 4983 Executive Officer Corporation and Vice
Syracuse, NY 13221-4983 Chairman, M&T Bank

C. Angela Bontempo Director President, Bontempo &
207 Commerce Drive Associates, LLC
Amherst, NY 14228-2302

Robert T. Brady Director Chairman, President and
East Aurora, NY 14052-0018 Chief Executive Officer,
Moog Inc.

Emerson L. Brumback Executive Officer Executive Vice
One M&T Plaza, 19th Floor President, M&T Bank
Buffalo, NY 14203-2396 Corporation and
M&T Bank

Atwood Collins, III Executive Officer Executive Vice
350 Park Avenue President, and
6th Floor President and Chief
New York, NY 10022-6022 Executive Officer, New
York City Division
of Manufacturers and
Traders Trust
Company;
and Executive Vice
President, M&T Bank
Corporation

Mark J. Czarnecki Executive Officer Executive Vice
One M&T Plaza President,
9th Floor Manufacturers and
Buffalo, NY 14203-2399 Traders Trust Company

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

<PAGE>

Brian E. Hickey Executive Officer Executive Vice President
255 East Avenue and President, Rochester
3rd Floor Division-Manufacturers
Rochester, NY 14604-2624 and Traders Trust
Company; and
Executive
Vice President,
M&T Bank Corporation

Patrick W.E. Hodgson Director President, Cinnamon
60 Bedford Road Investments Limited
2nd Floor
Toronto, Ontario
Canada M5R2K2

James L. Hoffman Executive Officer Executive Vice President
700 Corporate Blvd. and President, Hudson
Suite 701 Valley Division-Newburgh, NY 12550-6046
Manufacturers
and Traders Trust
Company; and
Executive Vice
President, M&T Bank
Corporation

Samuel T. Hubbard, Jr. Director President & Chief
1059 West Ridge Road Executive Officer, The
Rochester, NY 14615-2731 Alling & Cory
Company

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

Russell A. King Director Retired Partner and
4910 Red Pine Road Chief Executive Officer,
Manlius, NY 13104-1314 King & King Architects, Inc.

Adam C. Kugler Executive Officer Executive Vice President
350 Park Avenue and
Treasurer, M&T Bank
6th Floor Corporation and M&T Bank
New York, NY 10022-6022

Wilfred J. Larson Director Retired President and
200 Bahia Point Chief Executive Officer,
Naples, FL 34103-4368 Westwood-Squibb
Pharmaceuticals Inc.

Peter J. O'Donnell, Jr. Director President, Pine Tree
675 Highland Avenue Management Corporation
Clark Green, PA 18411-2502

Jorge G. Pereira Director Vice Chairman of the
350 Park Avenue Board, M&T Bank
6th Floor Corporation and
New York, NY 10022-6022 Manufacturers and
Traders Trust Company

<PAGE>

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

Michael P. Pinto Executive Officer Executive Vice President
One M&T Plaza and Chief Financial
19th Floor Officer, Manufacturers
Buffalo, NY 14203-2399 and Traders Trust
Company and M&T Bank
Corporation

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

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

John L. Vensel Director Chairman and Chief Executive
P.O. Box 977 Officer, Crucible Materials
Syracuse, NY 13201-0977 Corporation

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 and
Rochester, NY 14605-1775 Chief Executive
Officer, Genessee
Corporation

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

Item 29. Principal Underwriters:

(a) Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant:

Automated Government Money Trust; Cash Trust Series II; Cash Trust Series, Inc.;
CCB Funds; 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 Core Trust; 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.; Fixed Income Securities, Inc.; ; Hibernia Funds;
Independence One Mutual Funds; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; 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
Obligations Trust II; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Regions Funds; RIGGS Funds; SouthTrust Funds; Tax-Free
Instruments Trust; The Planters Funds; The Wachovia Funds; The Wachovia
Municipal Funds; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; World Investment Series, Inc.; High Yield Cash Trust; Investment
Series Trust; Star Funds; Targeted Duration Trust; The Virtus Funds; Trust for
Financial Institutions;

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

(b)
<TABLE>
<CAPTION>

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

Richard B. Fisher Director, Chairman, Chief
Federated Investors Tower Executive Officer, Chief
1001 Liberty Avenue Operating Officer, Asst.
Pittsburgh, PA 15222-3779 Secretary and Asst.
Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice President and
Federated Investors Tower President, Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Assistant Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew S. Hardin Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Leslie K. Ross Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
</TABLE>

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
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Notices should be sent to the Agent for Service at the above address)

5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7010

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

Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Libery Avenue
Pittsburgh, Pennsylvania 15222-3779

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

Federated Investment Counseling Federated Investors Tower
("Sub-Adviser" to the Vision New) 1001 Libery Avenue
York Free Money Market Fund only) Pittsburgh, Pennsylvania 15222-3779

State Street Bank and Trust Company P.O. Box 8609
("Custodian") Boston, Massachusetts 02266-8609

<PAGE>

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.

<PAGE>

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., 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 12th day of March, 1999

VISION GROUP OF FUNDS, INC.

BY: /s/Victor R. Siclari
Victor R. Siclari, Secretary
Attorney in Fact for Edward C. Gonzales
March 12th, 1999

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 March 12, 1999
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

Exhibit (1)(v) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K

VISION GROUP OF FUNDS, INC.
ARTICLES OF AMENDMENT

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"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:

FIRST: Effective May 1, 1999, the Charter of the Corporation
is hereby amended by renaming all of the issued and unissued shares of Class A
Common Stock Series A, Class A Common Stock Series S, Class B Common Stock
Series A, Class B Common Stock Series S, Class C Common Stock, Class D Common
Stock, Class E Common Stock, Class F Common Stock, Class G Common Stock, and
Class H Common Stock, respectively, as shares of Vision Money Market Fund -
Class A Shares, Vision Money Market Fund - Class S Shares, Vision Treasury Money
Market Fund - Class A Shares, Vision Treasury Money Market Fund - Class S
Shares, Vision New York Tax Free Money Market Fund - Class A Shares, Vision U.S.
Government Securities Fund - Class A Shares, Vision New York Municipal Income
Fund - Class A Shares, Vision Mid Cap Value Fund - Class A Shares, Vision Mid
Cap Growth Fund - Class A Shares, and Vision Large Cap Value Fund Class A
Shares.

SECOND: The foregoing amendment to the Charter of the
Corporation was approved by a majority of the entire Board of Directors; the
foregoing amendment is limited to a change expressly permitted by Section 2-605
of Title 2 of Subtitle 6 of the Maryland General Corporation Law to be made
without action by the stockholders of the Corporation; and the Corporation is
registered as an open-end investment company under the Investment Company Act of
1940, as amended.

The undersigned Vice President acknowledges that these
Articles of Amendment are the act of the Corporation and states that to the best
of her knowledge, information and belief, the matters and facts set forth in
these Articles with respect to authorization and approval are true in all
material respects and that this statement is made under the penalties of
perjury.

IN WITNESS WHEREOF, Vision Group of Funds, Inc. has caused
these presents to be signed in its name and on its behalf by its Vice President
and witnessed by its Secretary as of this ____ day of __________, 1999.

VISION GROUP OF FUNDS, INC.

By:
Beth S. Broderick
Vice President
WITNESS:

Victor R. Siclari, Secretary

Item (1)(vi) under Form N-1A
Item 3(i) under Item 601/Reg. S-K

VISION GROUP OF FUNDS, INC.
ARTICLES SUPPLEMENTARY

FIRST: Effective May 1, 1999 the aggregate number of shares of
capital stock that the Corporation has authority to issue is increased by ten
billion (10,000,000,000) shares. Six billion (6,000,000,000) of such additional
shares shall be classified as set forth below, the other four billion
(4,000,000,000) remaining unclassified:

Name Number of
Shares

Vision Mid Cap Value Fund Class B Shares 1,000,000,000
Vision Mid Cap Growth Fund Class B Shares 1,000,000,000
Vision Large Cap Value Fund Class B Shares 1,000,000,000
Vision Large Cap Growth Fund Class A Shares 1,000,000,000
Vision Large Cap Growth Fund Class B Shares 1,000,000,000
Vision High Yield Bond Fund Class A Shares 1,000,000,000

SECOND: The shares of Vision Mid Cap Value Fund Class B
Shares, Vision Mid Cap Growth Fund Class B Shares, and Vision Large Cap Value
Fund Class B Shares, Vision Large Cap Growth Fund Class A Shares, Vision Large
Cap Growth Fund Class B Shares, and Vision High Yield Bond Fund Class A Shares
classified hereby shall have the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption set forth in Article VI of the Corporation's
Charter and shall be subject to all provisions of the Charter relating to
capital stock of the Corporation:

THIRD: Immediately before the increase in the aggregate number
of shares of capital stock as set forth in Article FIRST hereto, and renaming of
certain of the classes pursuant to Articles of Amendment effective May 1, 1999,
the Corporation was authorized to issue Twenty Billion (20,000,000,000) shares
of capital stock, all of which were of the par value of One Mill ($0.001) per
share, with the aggregate par value of $20,000,000, classified as follows:

Name Number of
Shares
Class A Common Stock Series A 2,000,000,000
Class A Common Stock Series S 2,000,000,000
Class B Common Stock Series A 2,000,000,000
Class B Common Stock Series S 2,000,000,000
Class C Common Stock 1,000,000,000
Class D Common Stock 1,000,000,000
Class E Common Stock 1,000,000,000
Class F Common Stock 1,000,000,000
Class G Common Stock 1,000,000,000
Class H Common Stock 1,000,000,000
Unclassified 6,000,000,000
-------------
Total 20,000,000,000

FOURTH: As hereby increased and classified, and renamed
pursuant to the Articles of Amendment effective May 1, 1999, the total number of
shares of capital stock which the Corporation has authority to issue is Thirty
Billion (30,000,000,000) shares of capital stock, all of which are of the par
value of One Mill ($0.001) per share, and with the aggregate par value of
$30,000,000, classified as follows:

Name Number of
Shares

Vision Money Market Fund Class A Shares 2,000,000,000
Vision Money Market Fund Class S Shares 2,000,000,000
Vision Treasury Money Market Fund Class A Shares 2,000,000,000
Vision Treasury Money Market Fund Class S Shares 2,000,000,000
Vision New York Tax-Free Money Market Fund Class A Shares 1,000,000,000
Vision U.S. Government Securities Fund Class A Shares 1,000,000,000
Vision New York Municipal Income Fund Class A Shares 1,000,000,000
Vision Mid Cap Value Fund Class A Shares 1,000,000,000
Vision Mid Cap Value Fund Class B Shares 1,000,000,000
Vision Mid Cap Growth Fund Class A Shares 1,000,000,000
Vision Mid Cap Growth Fund Class B Shares 1,000,000,000
Vision Large Cap Value Fund Class A Shares 1,000,000,000
Vision Large Cap Value Fund Class B Shares 1,000,000,000
Vision Large Cap Growth Fund Class A Shares 1,000,000,000
Vision Large Cap Growth Fund Class B Shares 1,000,000,000
Vision High Yield Bond Fund Class A Shares 1,000,000,000
Unclassified 10,000,000,000
--------------
Total 30,000,000,000

FIFTH: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940, as ----- amended.

SIXTH: The Board of Directors of the Corporation increased the
total number of shares of capital stock that the Corporation has authority to
issue pursuant to Section 2-105(c) of the Maryland General Corporation Law and
classified six billion (6,000,000,000) of the additional shares as set forth
herein pursuant to authority provided in the Corporation's Charter.

The undersigned Vice President acknowledges these Articles
Supplementary to be the corporate act of the Corporation and states that to the
best of her knowledge, information and belief, the matters and facts set forth
in these Articles with respect to authorization and approval are true in all
material respects and that this statement is made under the penalties of
perjury.

VISION GROUP OF FUNDS, INC.

By:
Beth S. Broderick
Vice President

WITNESS:

Victor R. Siclari
Secretary

Exhibit 5(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

SUBADVISORY AGREEMENT

This Subadvisory Agreement (this "Agreement") is entered into as of the
1st day of September, 1998, by and among Vision Group of Funds, Inc., a Maryland
corporation (the "Company"), Manufacturers and Traders Trust Company, a New York
bank and trust company (the "Adviser"), and Federated Investment Counseling, a
Delaware business trust ("FIC").

Recitals:

A. The Company and the Adviser have entered into an advisory agreement
dated September 1, 1998 (the "Advisory Agreement"), pursuant to which
the Adviser provides portfolio management services to, among others,
the portfolio series of the Company set forth on Schedule 1 to this
Agreement (each a "Fund" and collectively the "Funds");

B. The Advisory Agreement contemplates that the Adviser may fulfill its
portfolio management responsibilities under the Advisory Agreement by
engaging one or more subadvisers; and
C. The Adviser and the Board of Directors (the "Board") of the Company
desire to retain FIC to render portfolio management services in the
manner and on the terms set forth in this Agreement.

Agreement:

NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Company, the Adviser and FIC agree as follows:

APPOINTMENT OF SUBADVISER.

The Adviser hereby appoints FIC as subadviser for each Fund. The
Adviser authorizes FIC, in its discretion and without prior consultation with
the Adviser, to invest and manage each Fund's portfolio of Securities according
to such Fund's stated investment objective to the fullest extent permitted by:

the Fund's investment policies, limitations, procedures and guidelines
set forth in the documents listed on Schedules 2 and 3 to this
Agreement;

any additional objectives, policies or guidelines established by the
Adviser or by the Board that have been furnished in writing to FIC;

the provisions of the Investment Company Act of 1940 (the "1940 Act")
and the rules and regulations thereunder applicable to the Fund,
including rule 2a-7 promulgated thereunder ("Rule 2a-7"); and

the provisions of Subchapter M of the Internal Revenue Code applicable
to "regulated investment companies."

For purposes of this Agreement, "Securities" include all investments and
investment techniques permitted under the foregoing policies, limitations,
procedures, guidelines, laws or regulations. Subject to the supervision of the
Adviser and the Board, FIC shall determine the structure and composition of the
Fund's portfolio, including the purchase, retention and disposition of, and
exercise of all rights pertaining to, the Securities comprising the portfolio.

REPRESENTATIONS AND WARRANTIES.

REPRESENTATIONS AND WARRANTIES OF FIC

FIC represents and warrants to Adviser as follows:

FIC is a business trust duly organized, validly existing, and in good
standing under the laws of the State of Delaware.

This Agreement constitutes the legal, valid, and binding obligation of
FIC, enforceable against FIC in accordance with its terms. FIC has the
absolute and unrestricted right, power, and authority to execute and
deliver this and to perform its obligations under this Agreement.

Neither the execution and delivery of this Agreement by FIC nor the
performance of any of its obligations hereunder will give any person
the right to prevent, delay, or otherwise interfere with the
performance of such obligations pursuant to:

any provision of FIC's Declaration of Trust or By-Laws;

any resolution adopted by the board of trustees or the shareholders of
FIC;

any law, regulation or administrative or court order to which FIC may
be subject; or

any contract to which FIC is a party or by which FIC may be bound.

FIC is not and will not be required to obtain any consent from any
person in connection with the execution and delivery of this Agreement
or the performance of any obligations hereunder.

FIC is registered with the Securities and Exchange Commission ("SEC")
as an investment adviser under the Investment Advisers Act of 1940 (the
"Advisers Act") and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it
to be so registered or licensed, except where the failure to be so
licensed would not have a material adverse effect on its business.

FIC has furnished to the Adviser true and complete copies of all the
documents listed on Schedule 3 to this Agreement.

REPRESENTATIONS AND WARRANTIES OF THE ADVISER

The Adviser represents and warrants to FIC as follows:

The Adviser is a bank and trust company duly organized, validly
existing, and in good standing under the laws of the State of New York.

This Agreement constitutes the legal, valid, and binding obligation of
the Adviser, enforceable against the Adviser in accordance with its
terms. The Adviser has the absolute and unrestricted right, power, and
authority to execute and deliver this and to perform its obligations
under this Agreement.

Neither the execution and delivery of this Agreement by the Adviser nor
the performance of any of its obligations hereunder will give any
person the right to prevent, delay, or otherwise interfere with the
performance of such obligations pursuant to:

any provision of the Adviser's Articles of Incorporation or By-Laws;

any resolution adopted by the board of directors or the shareholders
of the Adviser;

any law, regulation or administrative or court order to which the
Adviser may be subject; or

the Advisory Agreement or any other contract to which the Adviser is a
party or by which the Adviser may be bound.

Except for the approval of the Board and of each Fund's shareholders as
required by Section 15 of the 1940 Act, the Adviser is not and will not
be required to obtain any consent from any person in connection with
the execution and delivery of this Agreement or the performance of any
obligations hereunder.

The Adviser is registered with the SEC or is otherwise exempt from
registration as an investment adviser under the Advisers Act and is
registered or licensed or is otherwise exempt from registration or
licensing as an investment adviser under the laws of all jurisdictions
in which its activities require it to be so registered or licensed,
except where the failure to be so licensed would not have a material
adverse effect on its business.

The Adviser has furnished to FIC true and complete copies of all the
documents listed on Schedule 2 to this Agreement.

CONDITIONS TO AGREEMENT.

FIC's and the Adviser's obligations under this Agreement are subject to
the satisfaction of the following conditions precedent:

Receipt by FIC of satisfactory evidence that (i) this Agreement and the
Advisory Agreement have been approved by the vote of a majority of the
directors, who are not interested persons of FIC or the Adviser, cast
in person at a meeting of the Board called for the purpose of voting on
such approval, and (ii) this Agreement and the Advisory Agreement have
been approved by the vote of a majority of the outstanding voting
securities of the Fund;

Receipt by FIC of copies of instructions from each Fund to its
custodian designating the persons specified by FIC as "Authorized
Persons" under the Fund's custody agreement and the custodian's
agreement to provide such persons with cash balances and similar
information necessary to manage each Fund;

The Company's execution and delivery of a limited power of attorney in
favor of FIC, in a form mutually acceptable to FIC, the Adviser and the
Board;

Receipt by FIC and the Adviser of an endorsement adding the Funds as
named insureds to FIC's Money Market Net Asset Value Guaranty Policy at
the Funds' expense;

Receipt by FIC of Board resolutions adopting all procedures and
guidelines listed on Schedule 3 to this Agreement and identified as
required by Rule 2a-7 or any other exemptive rule or order that is or
will become applicable to any Fund;

Receipt by FIC of complete copies of all other policies procedures,
guidelines, and codes listed on Schedule 2 to this Agreement; and

Any other documents, certificates or other instruments that FIC or the
Adviser may reasonable request from the Fund.

COMPENSATION.

For the services provided under this Agreement, the Adviser shall pay
to FIC an annual fee equal to the percentage(s) of a Fund's average daily net
assets set forth opposite such Fund's name on Schedule 1. Such fee accrues daily
and shall be paid monthly. If this Agreement is effective for only a portion of
a month, the fee will be prorated for the portion of such month during which
this Agreement is in effect.

INFORMATION AND REPORTS.

The Adviser shall promptly notify FIC of any (i) change in the Advisory
Agreement or (ii) material change in any of the investment objectives,
policies, limitations, guidelines or procedures set forth in the
documents listed on Schedules 2 and 3 to this Agreement, and shall
provide FIC with copies of any such modified document; provided,
however, that the Adviser shall provide FIC with such notice at least
fifteen days in advance of any proposed change in an objective, policy,
limitation, guideline or procedure specified in paragraphs (a) and (b)
of Section 1.

The Adviser shall also provide FIC with a list, to the best of the
Adviser's knowledge, of all affiliated persons of Adviser (and any
affiliated person of such an affiliated person) and shall promptly
update the list whenever the Adviser becomes aware of any additional
affiliated persons.

FIC shall maintain separate books and detailed records of all matters
pertaining to all securities transactions on behalf of each Fund
hereunder as required by the 1940 Act, the Advisers Act, or as
reasonably requested in writing by the Adviser (a "Fund's Books and
Records"). Each Fund's Books and Records shall be available to the
Adviser at any time upon reasonable request and shall be available for
telecopying to the Adviser during any day that a Fund is open for
business.

From time to time as the Adviser or the Board may reasonably request,
FIC shall furnish to the Adviser and to the Board, reports of portfolio
transactions and reports on Securities held by a Fund, and such other
reports regarding FIC's management of any Fund as the Adviser or the
Board may reasonably request, all in such detail and form as the
Adviser, the Board, and FIC mutually agree. FIC will also inform the
Adviser and the Board on a current basis of changes in the investment
strategy or in the portfolio manager(s) for any Fund.

NONEXCLUSIVE AGREEMENT; ALLOCATION OF TRANSACTIONS.

The investment management services provided by FIC hereunder are not to
be deemed to be exclusive, and nothing in this Agreement shall prohibit
FIC from rendering similar services to other advisers, investment
companies, and other types of clients. The Adviser and the Company
acknowledge that the investment objectives of the Fund and those of
other FIC clients may be similar and that the investment performance of
the respective portfolios of these clients and the Funds may differ.

To the extent consistent with applicable law, FIC may aggregate
purchase or sell orders for a Fund with contemporaneous purchase or
sell orders of other clients of FIC or its affiliated persons. In such
event, allocation of the Securities so purchased or sold, as well as
the expenses incurred in the transaction, shall be made by FIC in the
manner FIC considers to be the most equitable and consistent with its
and its affiliates' fiduciary obligations to the Fund and to such other
clients. The Adviser hereby acknowledges that such aggregation of
orders may not result in a more favorable price or lower brokerage
commissions in all instances.

FIC will place orders with or through such banks, brokers, dealers,
futures commission merchants and other firms ("Brokers") in accordance
with the policy regarding brokerage set forth in a Fund's registration
statement or as the Board may direct from time to time. Bearing in mind
a Fund's best interest at all times, FIC shall use its best efforts to
obtain the most favorable price and execution for the Fund's
transactions available, considering all factors FIC deems relevant,
including by way of illustration, the size of the transaction, the
nature of the market for the security and the difficulty expected to be
encountered in executing the transaction, the amount of the commission,
the timing of the transaction taking into account market prices and
trends, the reputation, experience and financial stability of the
Broker involved and the quality of service rendered by the Broker in
other transactions. Subject to such policies as the Board may
determine, FIC shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by
reason of having caused the Fund to pay a Broker that provides
brokerage and research services to FIC or the Adviser (or to their
respective affiliated persons) an amount of commission for effecting a
Fund's transaction that is greater than the amount of commission that
another Broker would have charged for effecting that transaction. FIC
may enter into transactions on behalf of a Fund with Brokers that are
affiliated persons of FIC, provided such transactions are exempt from
the provisions of Sections 17(a), (d) and (e) of the 1940 Act. The
Company agrees that any change in the policies referred to in this
paragraph shall be subject to the proviso in Section 5(a) of this
Agreement.

FUND EXPENSES.

FIC shall bear its own costs of providing services hereunder; provided
that, nothing in this Agreement shall require FIC to pay, and each Fund shall
pay or reimburse FIC for, all of the Fund's own expenses and its allocable share
of the Company's expenses incurred in managing its portfolio of Securities,
including all commissions, mark-ups, transfer fees, registration fees, ticket
charges, transfer taxes, custodian fees and similar expenses. Each Fund shall
promptly reimburse FIC for any expense as may be reasonably incurred by FIC on
behalf of the Fund; provided, however, that FIC shall not incur any
extraordinary expense on behalf of the Fund without the prior written consent of
the Adviser. FIC shall keep and provide to the Company and the Adviser adequate
records of all expenses incurred by FIC on behalf of the Fund.

LIMITATION OF LIABILITY.

In the absence of willful misfeasance, bad faith or gross negligence on
the part of FIC, or of reckless disregard by FIC of its obligations and
duties hereunder, FIC shall not be subject to any liability to the
Adviser, the Fund, the Company, any shareholder of the Fund, or to any
person, firm or organization. Without limiting the foregoing, FIC shall
not have any liability whatsoever for any investment losses incurred by
a Fund, or arising from transactions by a Fund, prior to the date on
which FIC assumes responsibility for the management of the Fund's
portfolio.

The Adviser, the Company, and the Fund are hereby expressly put on
notice of the limitation of liability as set forth in the Declaration
of Trust of FIC and agree that the obligations assumed by FIC pursuant
to this Agreement shall be limited in any case to FIC and its assets
and the Adviser, the Company, and the Fund shall not seek satisfaction
of any such obligation from the shareholders of FIC, the trustees of
FIC, officers, employees or agents of FIC, or any of them.

PRICING.

The Adviser, the Company and the Fund hereby acknowledge that FIC is
not responsible for pricing portfolio Securities, and that the Adviser and FIC
will rely on the Amortized Cost Procedures listed in Schedule 3.

TERM.

This Agreement shall begin as of the date of its execution and shall
continue in effect for a period of two years from the date hereof and thereafter
for successive periods of one year, subject to the provisions for termination
and all of the other terms and conditions hereof if such continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by a Fund
at any time, without the payment of any penalty, by the Board or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of a
Fund, or by the Adviser or FIC at any time, without the payment of any penalty,
on not less than 60 days' written notice to the other parties. This Agreement
shall terminate automatically in the event of its assignment or upon termination
of the Advisory Agreement. In the event of termination, FIC shall immediately
cease all activity on behalf of the Fund and with respect to its Securities,
except as expressly directed by the Adviser. In addition, FIC shall deliver the
Fund's Books and Records to the Adviser by such means and in accordance with
such schedule, and shall otherwise cooperate, as reasonably directed by the
Adviser, in the transition of managing the Fund's portfolio of Securities to any
successor of FIC, including the Adviser. Any reasonable third party expenses
incurred in connection with the termination shall be paid by the Fund.
Termination of the Agreement shall not relieve the Fund, the Adviser or FIC of
any liability previously incurred hereunder.

GENERAL PROVISIONS

NOTICES

All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):

FIC: Federated Investment Counseling
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attention: Carol Kayworth
Facsimile No.: (412) 288-8230

Adviser: Manufacturers Traders & Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Robert J. Truesdell
Facsimile No.: (716) 842-5894

Company: Vision Group of Funds, Inc.
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Attention: Secretary
Facsimile No.: (412) 288-8141

FURTHER ASSURANCES

The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.

WAIVER

The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.

ENTIRE AGREEMENT AND MODIFICATION

This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.

ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS

Subject to Section 10, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted assigns
of the parties. Nothing expressed or referred to in this Agreement will be
construed to give any person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.

SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

SECTION HEADINGS, CONSTRUCTION

The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms. Any
terms defined in the 1940 Act, and not otherwise defined in this Agreement, are
used with the same meaning in this Agreement.

GOVERNING LAW

This Agreement will be governed by the laws of the State of
Pennsylvania without regard to conflicts of laws principles.

COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed on their behalf by their duly authorized officers as of the date first
above written.

MANUFACTURERS AND TRADERS FEDERATED INVESTMENT COUNSELING
TRUST COMPANY

By:/s/ Anthony M. Alessi By:/s/ Stephen A. Keen
Name: Anthony M. Alessi Name: Stephen A. Keen
Title: Assistant Vice President Title: Vice President

VISION GROUP OF FUNDS, INC.

By:/s/ Beth S. Broderick
Name: Beth S. Broderick
Title: Vice President

<PAGE>

SCHEDULE 1 - FUNDS AND SUBADVISORY FEES

Name of Series Subadvisory Fees

Vision New York Tax-Free Money Market Fund
- - first $100 million average daily net assets .20%
- - next $100 million average daily net assets .18%
- -average daily net assets over $200 million .15%

<PAGE>

SCHEDULE 2 - FUND DOCUMENTATION

1. Company's Articles of Incorporation and Bylaws.
2. Currently effective registration statement for each class of each Fund's
shares and any pending amendments to such registration statement.
3. Any supplements to any prospectus or statement of additional information for
any class of any Fund's shares. 4. Custody Agreement between the Company and
State Street Bank and Trust Company, as Custodian for each Fund's securities,
including information as to:
o each Fund's nominee,
o the Federal tax identification numbers of each Fund and its nominee,
o all routing, bank, participant and account numbers and other
information necessary to provide proper instructions for transfer and
delivery of Securities to each Fund's accounts at the Custodian, the
name, address, phone and fax number of the Custodian's employees
responsible for each Fund's accounts, and each Fund's pricing service
and contact persons.
5. All SEC exemptive orders applicable to any Fund, and all procedures and
guidelines adopted by the Board under the terms of such orders.
6. All procedures and guidelines adopted by the Board or the Adviser regarding:
o Transactions with affiliated persons,
o Evaluating the liquidity of securities, including restricted
securities, municipal leases and stripped U.S. government
securities,
o Segregation of liquid assets in connection with firm commitments and
standby commitments,
o Derivative contracts and securities,
o Rule 10f-3 (relating to affiliated underwriting syndicates),
o Rule 17a-7 (relating to interfund transactions),
o Rule 17e-1 (relating to transactions with affiliated Brokers), and
o Release No. IC-22362 (granting exemptions for investments in money
market funds).
7. Any master agreements that the Company has entered into on behalf of
any Fund, including:
o Master Repurchase Agreement,
o Master Futures and Options Agreements,
o Master Foreign Exchange Netting Agreements, and
o Master Swap Agreements.
8. CFTC Rule 4.5 letter.
9. Schedule of the current year's Board meetings, and any reports needed
by the Board.
10. Names, addresses, phone numbers and contacts for entities responsible
for performance calculations.

<PAGE>

SCHEDULE 3 - SUBADVISER DOCUMENTATION

1. Part II of FIC's Form ADV most recently filed with the SEC.
2. Guidelines and procedures required by Rule 2a-7, consisting of:
o Forms of resolutions authorizing use of the amortized cost method,
o Amortized Cost Procedures, and
o Federated Investment Adviser Guidelines
3. Procedures and checklists required by the following exemptive rules and
orders under the 1940 Act: o Rule 17f-4 (relating to securities held in
securities depositories), o Rule 17j-1 (relating to a code of ethics), and o
Release No. IC-19816 (granting exemptions for transactions with "affiliated
banks"). 4. Policies regarding the allocation of securities among clients with
common investment objectives.

<PAGE>

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, dated as of September 1, 1998, that
Vision Group of Funds, Inc., a corporation duly organized under the laws of the
state of Maryland (the "Corporation"), does hereby nominate, constitute and
appoint Federated Investment Counseling, a business trust duly organized under
the laws of the Delaware (the "Subadviser"), to act hereunder as the true and
lawful agent and attorney-in-fact of the Corporation, acting on behalf of each
of the series portfolios for which the Subadviser acts as investment adviser
shown on Schedule 1 attached hereto and incorporated by reference herein (each
such series portfolio being hereinafter referred to as a "Fund" and collectively
as the "Funds"), for the specific purpose of executing and delivering all such
agreements, instruments, contracts, assignments, bond powers, stock powers,
transfer instructions, receipts, waivers, consents and other documents, and
performing all such acts, as the Subadviser may deem necessary or reasonably
desirable, related to the acquisition, disposition and/or reinvestment of the
funds and assets of a Fund of the Corporation in accordance with Subadviser's
supervision of the investment, sale and reinvestment of the funds and assets of
each Fund pursuant to the authority granted to the Subadviser as investment
adviser of each Fund under that certain subadvisory contract dated September 1,
1998 by and between the Subadviser and the Corporation (such subadvisory
contract, as may be amended, supplemented or otherwise modified from time to
time is hereinafter referred to as the "Subadvisory Contract").

The Subadviser shall exercise or omit to exercise the powers and
authorities granted herein in each case as the Subadviser in its sole and
absolute discretion deems desirable or appropriate under existing circumstances.
The Corporation hereby ratifies and confirms as good and effectual, at law or in
equity, all that the Subadviser, and its officers and employees, may do by
virtue hereof. However, despite the above provisions, nothing herein shall be
construed as imposing a duty on the Subadviser to act or assume responsibility
for any matters referred to above or other matters even though the Subadviser
may have power or authority hereunder to do so. Nothing in this Limited Power of
Attorney shall be construed (i) to be an amendment or modifications of, or
supplement to, the Subadvisory Contract, (ii) to amend, modify, limit or
denigrate any duties, obligations or liabilities of the Subadviser under the
terms of the Subadvisory Contract or (iii) exonerate, relieve or release the
Subadviser any losses, obligations, penalties, actions, judgments and suits and
other costs, expenses and disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Subadviser (x) under the
terms of the Subadvisory Contract or (y) at law, or in equity, for the
performance of its duties as the investment adviser of any of the Funds.

The Corporation hereby agrees to indemnify and save harmless the
Subadviser and its trustees, officers and employees (each of the foregoing an
"Indemnified Party" and collectively the "Indemnified Parties") against and from
any and all losses, obligations, penalties, actions, judgments and suits and
other costs, expenses and disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against an Indemnified Party, other
than as a consequence of gross negligence or willful misconduct on the part of
an Indemnified Party, arising out of or in connection with this Limited Power of
Attorney or any other agreement, instrument or document executed in connection
with the exercise of the authority granted to the Subadviser herein to act on
behalf of the Corporation, including without limitation the reasonable costs,
expenses and disbursements in connection with defending such Indemnified Party
against any claim or liability related to the exercise or performance of any of
the Subadviser's powers or duties under this Limited Power of Attorney or any of
the other agreements, instruments or documents executed in connection with the
exercise of the authority granted to the Subadviser herein to act on behalf of
the Corporation, or the taking of any action under or in connection with any of
the foregoing. The obligations of the Corporation under this paragraph shall
survive the termination of this Limited Power of Attorney with respect to
actions taken by the Subadviser on behalf of the Corporation during the term of
this Limited Power of Attorney. No Fund shall have any joint or several
obligation with any other Fund to reimburse or indemnify an Indemnified Party
for any action, event, matter or occurrence performed or omitted by or on behalf
of the Subadviser in its capacity as agent or attorney-in-fact of Corporation
acting on behalf of any other Fund hereunder.

Any person, partnership, corporation or other legal entity dealing with
the Subadviser in its capacity as attorney-in-fact hereunder for the Corporation
is hereby expressly put on notice that the Subadviser is acting solely in the
capacity as an agent of the Corporation and that any such person, partnership,
corporation or other legal entity must look solely to the Corporation in
question for enforcement of any claim against the Corporation, as the Subadviser
assumes no personal liability whatsoever for obligations of the Corporation
entered into by the Subadviser in its capacity as attorney-in-fact for the
Corporation.

Each person, partnership, corporation or other legal entity which deals
with a Fund of the Corporation through the Subadviser in its capacity as agent
and attorney-in-fact of the Corporation, is hereby expressly put on notice (i)
that all persons or entities dealing with the Corporation must look solely to
the assets of the Fund of the Corporation on whose behalf the Subadviser is
acting pursuant to its powers hereunder for enforcement of any claim against the
Corporation, as the Directors, officers and/or agents of such Corporation, the
shareholders of the various classes of shares of the Corporation and the other
Funds of the Corporation assume no personal liability whatsoever for obligations
entered into on behalf of such Fund of the Corporation, and (ii) that the
rights, liabilities and obligations of any one Fund are separate and distinct
from those of any other Fund of the Corporation.

The execution of this Limited Power of Attorney by the Corporation
acting on behalf of the several Funds shall not be deemed to evidence the
existence of any express or implied joint undertaking or appointment by and
among any or all of the Funds. Liability for or recourse under or upon any
undertaking of the Subadviser pursuant to the power or authority granted to the
Subadviser under this Limited Power of Attorney under any rule of law, statute
or constitution or by the enforcement of any assessment or penalty or by legal
or equitable proceedings or otherwise shall be limited only to the assets of the
Fund of the Corporation on whose behalf the Subadviser was acting pursuant to
the authority granted hereunder.

The Corporation hereby agrees that no person, partnership, corporation
or other legal entity dealing with the Subadviser shall be bound to inquire into
the Subadviser's power and authority hereunder and any such person, partnership,
corporation or other legal entity shall be fully protected in relying on such
power or authority unless such person, partnership, corporation or other legal
entity has received prior written notice from the Corporation that this Limited
Power of Attorney has been revoked. This Limited Power of Attorney shall be
revoked and terminated automatically upon the cancellation or termination of the
Subadvisory Contract between the Corporation and the Subadviser. Except as
provided in the immediately preceding sentence, the powers and authorities
herein granted may be revoked or terminated by the Corporation at any time
provided that no such revocation or termination shall be effective until the
Subadviser has received actual notice of such revocation or termination in
writing from the Corporation.

This Limited Power of Attorney constitutes the entire agreement between
the Corporation and the Subadviser, may be changed only by a writing signed by
both of them, and shall bind and benefit their respective successors and
assigns; provided, however, the Subadviser shall have no power or authority
hereunder to appoint a successor or substitute attorney in fact for the
Corporation.

This Limited Power of Attorney shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania without reference
to principles of conflicts of laws. If any provision hereof, or any power or
authority conferred upon the Subadviser herein, would be invalid or
unexercisable under applicable law, then such provision, power or authority
shall be deemed modified to the extent necessary to render it valid or
exercisable while most nearly preserving its original intent, and no provision
hereof, or power or authority conferred upon the Subadviser herein, shall be
affected by the invalidity or the non-exercisability of another provision
hereof, or of another power or authority conferred herein.

This Limited Power of Attorney may be executed in as many identical
counterparts as may be convenient and by the different parties hereto on
separate counterparts. This Limited Power of Attorney shall become binding on
the Corporation when the Corporation shall have executed at least one
counterpart and the Subadviser shall have accepted its appointment by executing
this Limited Power of Attorney. Immediately after the execution of a counterpart
original of this Limited Power of Attorney and solely for the convenience of the
parties hereto, the Corporation and the Subadviser will execute sufficient
counterparts so that the Subadviser shall have a counterpart executed by it and
the Corporation, and the Corporation shall have a counterpart executed by the
Corporation and the Subadviser. Each counterpart shall be deemed an original and
all such taken together shall constitute but one and the same instrument, and it
shall not be necessary in making proof of this Limited Power of Attorney to
produce or account for more than one such counterpart.

IN WITNESS WHEREOF, the Corporation has caused this Limited Power of
Attorney to be executed by its duly authorized officer as of the date first
written above.

VISION GROUP OF FUNDS, INC.

By: /s/ Beth S. Broderick
Title: Vice President

Accepted and agreed to September 1, 1998

FEDERATED INVESTMENT COUNSELING

By: /s/ Stephen A. Keen
Title: Stephen A. Keen

<PAGE>

Schedule 1
to Limited Power of Attorney
dated as of September 1, 1998
by Vision Group of Funds, Inc.
(the Corporation "), acting on
behalf of each of the series portfolios
listed below, and appointing
Federated Investment Counseling
the attorney-in-fact of the
Corporation

List of Series Portfolios

Vision New York Tax-Free Money Market Fund

Exhibit 5(v) under Form N-1A
Exhibit 10 under Item 601-Reg S/K

VISION GROUP OF FUNDS, INC.

INVESTMENT ADVISORY CONTRACT

This Contract is made this 1st day of September 1998, between
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T Bank"), a New York state bank and
trust company, having its principal place of business in Buffalo, New York (the
"Adviser"), and VISION GROUP OF FUNDS, INC., a Maryland corporation having its
principal place of business at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7010 (the "Corporation").

WHEREAS the Corporation is an open-end management investment company as
that term is defined in the Investment Company Act of 1940, as amended
("1940 Act") , and is registered as such with the Securities and
Exchange Commission; and

WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services.

NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

1. The Corporation hereby appoints Adviser as Investment Adviser for
each of the portfolios ("Funds") of the Corporation which executes an exhibit to
this Contract, and Adviser accepts the appointments. Subject to the direction of
the Directors of the Corporation, Adviser shall provide investment research and
supervision of the investments of the Funds and conduct a continuous program of
investment evaluation and of appropriate sale or other disposition and
reinvestment of each Fund's assets.

2. Adviser, in its supervision of the investments of each of the Funds
will be guided by each of the Fund's investment objective and policies and the
provisions and restrictions contained in the Articles of Incorporation and
By-Laws of the Corporation and as set forth in the Registration Statements and
exhibits as may be on file with the Securities and Exchange Commission.

3. Each Fund shall pay or cause to be paid all of its own expenses and
its allocable share of Corporation expenses, including, without limitation, the
expenses of organizing the Corporation and continuing its existence; fees and
expenses of Directors and officers of the Corporation; fees for investment
advisory services and administrative personnel and services; expenses incurred
in the distribution of its shares ("Shares"), including expenses of
administrative support services; fees and expenses of preparing and printing its
Registration Statements under the Securities Act of 1933 and the 1940 Act, and
any amendments thereto; expenses of registering and qualifying the Corporation,
the Funds, and Shares of the Funds under federal and state laws and regulations;
expenses of preparing, printing, and distributing prospectuses (and any
amendments thereto) to shareholders; interest expense, taxes, fees, and
commissions of every kind; expenses of issue (including cost of Share
certificates), purchase, repurchase, and redemption of Shares, including
expenses attributable to a program of periodic issue; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder servicing
agents, and registrars; printing and mailing costs, auditing, accounting, and
legal expenses; reports to shareholders and governmental officers and
commissions; expenses of meetings of Directors and shareholders and proxy
solicitations therefor; insurance expenses; association membership dues and such
nonrecurring items as may arise, including all losses and liabilities incurred
in administering the Corporation and the Funds. Each Fund will also pay its
allocable share of such extraordinary expenses as may arise including expenses
incurred in connection with litigation, proceedings, and claims and the legal
obligations of the Corporation to indemnify its officers and Directors and
agents with respect thereto.

4. Each of the Funds shall pay to Adviser, for all services rendered to
each Fund by Adviser hereunder, the fees set forth in the exhibits attached
hereto.

5. The net asset value of each Fund's Shares as used herein will be
calculated to the nearest 1/10th of one cent.

6. The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of one
or more of the Funds) to the extent that any Fund's expenses exceed such lower
expense limitation as the Adviser may, by notice to the Fund, voluntarily
declare to be effective.

7. This Contract shall begin for each Fund as of the date of execution
of the applicable exhibit and shall continue in effect with respect to each Fund
presently set forth on an exhibit (and any subsequent Funds added pursuant to an
exhibit during the initial term of this Contract) for two years from the date of
this Contract set forth above and thereafter for successive periods of one year,
subject to the provisions for termination and all of the other terms and
conditions hereof if: (a) such continuation shall be specifically approved at
least annually by the vote of a majority of the Directors of the Corporation,
including a majority of the Directors who are not parties to this Contract or
interested persons of any such party cast in person at a meeting called for that
purpose; and (b) Adviser shall not have notified a Fund in writing at least
sixty (60) days prior to the anniversary date of this Contract in any year
thereafter that it does not desire such continuation with respect to that Fund.
If a Fund is added after the first approval by the Directors as described above,
this Contract will be effective as to that Fund upon execution of the applicable
exhibit and will continue in effect until the next annual approval of this
Contract by the Directors and thereafter for successive periods of one year,
subject to approval as described above.

8. Notwithstanding any provision in this Contract, it may be terminated
at any time with respect to any Fund, without the payment of any penalty, by the
Directors of the Corporation or by a vote of the shareholders of that Fund on
sixty (60) days' written notice to Adviser.

9. This Contract may not be assigned by Adviser and shall automatically
terminate in the event of any assignment. Adviser may employ or contract with
such other person, persons, corporation, or corporations (including a
sub-adviser) at its own cost and expense as it shall determine in order to
assist it in carrying out this Contract, subject to any approval required under
the 1940 Act. Notwithstanding the foregoing, the Adviser shall be liable to the
Corporation for the acts and omissions of any sub-investment adviser to the
extent that such sub-investment adviser is liable to the Adviser for such acts
or omissions under any sub-advisory agreement.

10. In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the obligations or duties under this Contract on the
part of Adviser, Adviser shall not be liable to the Corporation or to any of the
Funds or to any shareholder for any act or omission in the course of or
connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding, or sale of any security.

11. This Contract may be amended at any time by agreement of the parties
provided that the amendment shall be approved both by the vote of a majority of
the Directors of the Corporation, including a majority of the Directors who are
not parties to this Contract or interested persons of any such party to this
Contract (other than as Directors of the Corporation) cast in person at a
meeting called for that purpose, and, to the extent required by the 1940 Act, on
behalf of a Fund by a majority of the outstanding voting securities of such
Fund.

12. The Adviser acknowledges that all sales literature for investment
companies (such as the Corporation) are subject to strict regulatory oversight.
The Adviser agrees to submit any proposed sales literature for the Corporation
(or any Fund) or for itself or its affiliates which mentions the Corporation (or
any Fund) to the Corporation's distributor for review and filing with the
appropriate regulatory authorities prior to the public release of any such sales
literature, provided, however, that nothing herein shall be construed so as to
create any obligation or duty on the part of the Adviser to produce sales
literature for the Corporation (or any Fund). The Corporation agrees to cause
its distributor to promptly review all such sales literature to ensure
compliance with relevant requirements, to promptly advise Adviser of any
deficiencies contained in such sales literature, to promptly file complying
sales literature with the relevant authorities, and to cause such sales
literature to be distributed to prospective investors in the Corporation.

13. The parties hereto acknowledge that M&T Bank, has reserved the right
to grant the non-exclusive use of the name "Vision" or any derivative thereof to
any other investment company, investment company portfolio, investment adviser,
distributor or other business enterprise, and to withdraw from the Corporation
and one or more of the Funds the use of the name "Vision". The parties also
acknowledge that the investment management services furnished by the Adviser are
not to be deemed exclusive and the Adviser shall be free to furnish similar
services to others whether or not for compensation so long as its services under
this Agreement are not impaired thereby.

14. This Contract shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.

15. This Contract will become binding on the parties hereto upon their
execution of the attached exhibits to this Contract.

16. In compliance with the requirements of the 1940 Act, the Adviser
hereby agrees that all records which it maintains for the Corporation are the
property of the Corporation and further agrees to surrender promptly to the
Corporation any of such records upon the Corporation's request. The Adviser
further agrees to preserve for the periods prescribed by the 1940 Act the
records required to be maintained under the 1940 Act.

MANUFACTURERS AND TRADERS TRUST COMPANY

By:/s/ Anthony M. Alessi

Name: Anthony M. Alessi
Title: Assistant Vice President

VISION GROUP OF FUNDS, INC.

By:/s/ Beth S. Broderick

Name: Beth S. Broderick
Title: Vice President

<PAGE>

EXHIBIT A
to the
Investment Advisory Contract

Vision New York Tax-Free Money Market Fund

For all services rendered by Adviser hereunder, the above-named Fund(s)
of the Corporation shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .50 of 1% of the average daily net assets of the Fund(s).

The portion of the fee based upon the average daily net assets of the
Fund(s) shall be accrued at the rate of 1/365th of .50 of 1% applied to the
daily net assets of the Fund(s).

The advisory fee so accrued shall be accrued daily and paid to the
Adviser monthly.

Witness the due execution hereof this 1st day of September, 1998.

MANUFACTURERS AND TRADERS TRUST COMPANY

By:/s/ Anthony M. Alessi

Name: Anthony M. Alessi
Title: Assistant Vice President

VISION GROUP OF FUNDS, INC.

By:/s/ Beth S. Broderick

Name: Beth S. Broderick
Title: Vice President

Exhibit 5(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT D
to the
Investment Advisory Contract
between Manufacturer's and Traders Trust Company
and Vision Group of Funds, Inc.
dated June 1, 1993

Vision High Yield Bond Fund

For all services rendered by Adviser hereunder, the above-named Fund of
the Corporation shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .70 of 1% of the average daily net assets of the Fund.

The portion of the fee based upon the average daily net assets of the
Fund shall be accrued at the rate of 1/365th of .70 of 1% applied to the daily
net assets of the Fund.

The advisory fee so accrued shall be paid to Adviser at least monthly.

Witness the due execution hereof this 1st day of May, 1999.

MANUFACTURERS AND TRADERS
TRUST COMPANY

By:
Name:
Title:

VISION GROUP OF FUNDS, INC.

By:
Name:
Title:

Exhibit 5(vii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

EXHIBIT E
to the
Investment Advisory Contract
between Manufacturer's and Traders Trust Company
and Vision Group of Funds, Inc.
dated June 1, 1993

Vision Large Cap Growth Fund

For all services rendered by Adviser hereunder, the above-named Fund of
the Corporation shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .85 of 1% of the average daily net assets of the Fund.

The portion of the fee based upon the average daily net assets of the
Fund shall be accrued at the rate of 1/365th of .85 of 1% applied to the daily
net assets of the Fund.

The advisory fee so accrued shall be paid to Adviser at least monthly.

Witness the due execution hereof this 1st day of May, 1999.

MANUFACTURERS AND TRADERS
TRUST COMPANY

By:
Name:
Title:

VISION GROUP OF FUNDS, INC.

By:
Name:
Title:

Exhibit 6(v) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

Exhibit F
to the
Distributor's Contract

VISION GROUP OF FUNDS, INC.

Vision High Yield Bond Fund
Class A Shares
Vision Large Cap Growth Fund
Class A Shares

The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 1st day of June, 1993, between VISION GROUP OF
FUNDS, INC. and FEDERATED SECURITIES CORP. with respect to Classes of the Funds
set forth above.

1. The Corporation hereby appoints FSC to engage in activities
principally intended to result in the sale of shares of the above-listed Classes
("Shares"). Pursuant to this appointment, FSC is authorized to select a group of
Broker/Dealers or Financial Institutions ("Institutions") to sell Shares at the
current offering price thereof as described and set forth in the respective
prospectuses of the Corporation, and to render sales related services to the
Corporation and its shareholders.

2. During the term of this Agreement, the Corporation will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual rate
of .25 of 1% of the average aggregate net asset value of the Class A Shares of
the Vision High Yield Bond Fund and Vision Large Cap Growth Fund held during the
month. For the month in which this Agreement becomes effective or terminates,
there shall be an appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.

3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses exceed
such lower expense limitation as FSC may, by notice to the Corporation,
voluntarily declare to be effective.

4. FSC will enter into separate written agreements with various firms
to provide certain of the services set forth in Paragraph 1 herein. FSC, in its
sole discretion, may pay Institutions a periodic fee in respect of Shares owned
from time to time by their clients or customers. The schedules of such fees and
the basis upon which such fees will be paid shall be determined from time to
time by FSC in its sole discretion.

5. FSC will prepare reports to the Board of Directors of the
Corporation on a quarterly basis showing amounts expended hereunder including
amounts paid to Institutions and the purpose for such payments.

<PAGE>

In consideration of the mutual covenants set forth in the Distributor's
Contract dated the 1st day of June, 1993 between Vision Group of Funds, Inc. and
Federated Securities Corp., Vision Group of Funds, Inc. executes and delivers
this Exhibit on behalf of the Funds, and with respect to the separate Classes of
Shares thereof, first set forth in this Exhibit.

Witness the due execution hereof this 1st day of May, 1999.

VISION GROUP OF FUNDS, INC.

By:
Name:
Title:

FEDERATED SECURITIES CORP.

By:
Name:
Title:

Exhibit 6(vi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

Exhibit G
to the
Distributor's Contract

VISION GROUP OF FUNDS, INC.

Vision Mid Cap Value Fund
(formerly: Vision Growth and Income Fund)
Class B Shares
Vision Mid Cap Growth Fund
(formerly: Vision Capital Appreciation Fund)
Class B Shares
Vision Large Cap Value Fund
(formerly: Vision Equity Income Fund)
Class B Shares
Vision Large Cap Growth Fund
Class B Shares

2. During the term of this Agreement, the Corporation will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual rate
of .75 of 1% of the average aggregate net asset value of the Class B Shares of
the Vision Mid Cap Value Fund, Vision Mid Cap Growth Fund, Vision Large Cap
Value Fund and Vision Large Cap Growth Fund held during the month. For the month
in which this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the number of days that
the Agreement is in effect during the month.

<PAGE>

Witness the due execution hereof this 1st day of May, 1999.

VISION GROUP OF FUNDS, INC.

By:
Name:
Title:

FEDERATED SECURITIES CORP.

By:
Name:
Title:

Exhibit 6(xiii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

Amendment #1 to
EXHIBIT A
to Amended and Restated Shareholder Services Plan of
the Vision Group of Funds, Inc. (the "Fund")
dated November 8, 1995

Classes covered by this Plan :
Vision Money Market Fund
Class A Shares*
Class S Shares
Vision Treasury Money Market Fund
Class A Shares*
Class S Shares
Vision New York Tax-Free Money Market Fund
Class A Shares**
Vision U.S. Government Securities Fund
Class A Shares**
Vision New York Municipal Income Fund
Class A Shares**
Vision Mid Cap Value Fund
(formerly: Vision Growth and Income Fund)
Class A Shares**
Class B Shares
Vision Mid Cap Growth Fund
(formerly: Vision Capital Appreciation Fund)
Class A Shares**
Class B Shares
Vision Large Cap Value Fund
(formerly: Vision Equity Income Fund)
Class A Shares**
Class B Shares
Vision Large Cap Growth Fund
Class A Shares
Class B Shares
Vision High Yield Bond Fund
Class A Shares

VISION GROUP OF FUNDS, INC.

By:
Name:
Title:

Dated: May 1, 1999
* Original Shares redesignated on May 1, 1998 ** Original Shares redesignated on
May 1, 1999

Exhibit 6(xiv) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K

Amendment No. 1 to EXHIBIT A
to Shareholder Services Agreement with
the Vision Group of Funds, Inc. (the "Funds")
dated November 9, 1995

Funds covered by this Agreement:
Vision Money Market Fund
Class A Shares
Class S Shares
Vision Treasury Money Market Fund
Class A Shares
Class S Shares
Vision New York Tax-Free Money Market Fund
Class A Shares
Vision U.S. Government Securities Fund
Class A Shares
Vision New York Municipal Income Fund
Class A Shares
Vision Mid Cap Value Fund
(formerly: Vision Growth and Income Fund)
Class A Shares
Class B Shares
Vision Mid Cap Growth Fund
(formerly: Vision Capital Appreciation Fund)
Class A Shares
Class B Shares
Vision Large Cap Value Fund
(formerly: Vision Equity Income Fund)
Class A Shares
Class B Shares
Vision Large Cap Growth Fund
Class A Shares
Class B Shares
Vision High Yield Bond Fund
Class A Shares
Shareholder Service Fees

1. During the term of this Agreement, the Funds will pay Provider a
quarterly fee. This fee will be computed at the annual rate of .25% of the
average net asset value of shares of the Funds held during the quarter in
accounts for which the Provider provides Services under this Agreement, so long
as the average net asset value of Shares in the Funds during the quarter equals
or exceeds such minimum amount as the Funds shall from time to time determine
and communicate in writing to the Provider.

2. For the quarterly period in which the Shareholder Services Agreement
becomes effective or terminates, there shall be an appropriate proration of any
fee payable on the basis of the number of days that the Agreement is in effect
during the quarter.

MANUFACTURER'S AND TRADERS TRUST COMPANY

By:
Name:
Title:

FEDERATED ADMINISTRATIVE SERVICES

By:
Name:
Title:

Dated: May 1, 1999

Exhibit 8(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

AMENDMENT NO. 4 to Exhibit A

Custodian Contract
between
VISION GROUP OF FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
dated July 5, 1990

PORTFOLIOS OF VISION GROUP OF FUNDS, INC.

VISION GROUP OF FUNDS, INC. (the "Fund") consists of the following
portfolios (the "Portfolios") effective as of the dates set forth below:

Name Date

Vision Money Market Fund June 1, 1988

Vision New York Tax-Free Money Market Fund June 1, 1988

Vision Treasury Money Market Fund June 1, 1988

Vision U.S. Government Securities Fund August 16, 1993

Vision New York Municipal Income Fund August 16, 1993

Vision Mid Cap Value Fund November 2, 1993
(formerly: Vision Growth and Income Fund)

Vision Mid Cap Growth Fund June 1, 1996
(formerly: Vision Capital Appreciation Fund)

Vision Large Cap Value Fund September 1, 1997
(formerly: Vision Equity Income Fund)

Vision High Yield Bond Fund May 1, 1999

Vision Large Cap Growth Fund May 1, 1999

VISION GROUP OF FUNDS, INC. STATE STREET BANK AND TRUST COMPANY

By: By:
Name: Name:
Title: Title:

Exhibit 9(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

RECORDKEEPING AGREEMENT
(Vision Group of Funds, Inc.)

This Agreement is entered into as of the of 18th day of August, 1998,
between Empire Professional Services, Inc. ( "Recordkeeping Agent") and
Federated Shareholder Services Company ("FSSC").

Recordkeeping Agent shall provide the Recordkeeping Services enumerated
in Paragraph 1 herein to FSSC in accordance with the Operational Guidelines
(described in Exhibit C). Recordkeeping Agent shall maintain sub-accounts for
its customers ("Sub-accounts") in the Federated funds (the "Funds") (listed In
Exhibit A) in connection with the purchase and redemption of shares of the Funds
through one or more omnibus or master accounts in each Fund (individually, an
"Account" and collectively, the "Accounts"), subject to the terms and conditions
of this Agreement. In exchange, Recordkeeping Agent shall receive a
recordkeeping fee (described in Exhibit B).

1. RECORDKEEPING SERVICES. Recordkeeping Agent shall provide to FSSC, for
the benefit of shareholders of the Funds the following services:

A. Sub-Accounting. Sub-accounting for Recordkeeping Agent's customers
shall be the responsibility of the Recordkeeping Agent. Sub-accounts will be
maintained in accordance with the prospectus of each Fund. FSSC will recognize
on the books of the Funds each of Recordkeeping Agent's Accounts (or retirement
plan serviced by Recordkeeping Agent, if applicable) as a single shareholder and
as an unallocated account in the Funds, and will not maintain separate accounts
for each of Recordkeeping Agent's customers.

B. Maintenance of Records. Recordkeeping Agent shall maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Recordkeeping services. Upon the request of FSSC,
Recordkeeping Agent shall provide copies of all records relating to the Funds as
may reasonably be requested to enable the Funds or their representatives to (i)
respond to the directors/trustees requests for information; (ii) monitor and
review the services provided under this agreement; or (iii) comply with any
request of a governmental body or self-regulatory organization. If fees are
based upon number of Sub-accounts, Recordkeeping Agent agrees that it will
provide FSSC assurance from an independent auditor, upon request, that the fees
are being charged in accordance with this agreement. Recordkeeping Agent will
provide FSSC with access to the books and records in its possession relating to
the Sub-accounts upon reasonable notice during normal business hours.

C. Administrative Services. Recordkeeping Agent shall assist its
customers with any inquiries, transactions or requests such customers may have.

D. Other Services. Recordkeeping Agent shall provide other services to
shareholders of the Funds as FSSC, or its affiliates may reasonably request from
time to time.

E. Nature of Services. The Recordkeeping Agent and FSSC agree that the
payment of the Recordkeeping fee is for recordkeeping and administrative
services only and not for legal, investment, advisory or distribution services.
Also, Recordkeeping Agent will not be performing any of the transfer agency
functions set forth in Section 3(a)(25) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). In addition, the Recordkeeping Agent represents
that all purchases and redemptions of Fund shares contemplated by this Agreement
shall be effected in accordance with each Fund's then current prospectus, and
the arrangements provided for in this Agreement will be disclosed to each
Sub-account through Recordkeeping Agent and its representatives. Each party to
the Agreement represents that it will promptly notify the other in the event
that it for any reason is unable to perform any of its obligations under this
Agreement.

2. REGISTRATIONS AND MEMBERSHIPS. Each party hereby represents that it is duly
registered, as required, with all regulatory agencies, and is a member in good
standing of any requisite associations and self-regulatory organizations.

3. EXPENSES. Each party shall bear all expenses incidental to the performance of
its obligations under this Agreement.

4. INSURANCE. Recordkeeping Agent shall maintain appropriate insurance coverage,
including errors and omissions insurance, and if necessary, bonding, issued by a
qualified insurance carrier with a Best's rating of at least "A" or with the
highest rating by a nationally recognized statistical rating organization, of
the types ordinarily maintained by like agents servicing mutual funds or their
agents, and in commercially recognizable amounts. No provision of this Agreement
shall be construed to relieve an insurer of any obligation to pay claims to FSSC
or Recordkeeping Agent or other insured parties which would otherwise be a
covered claim in the absence of any provision of this Agreement.

5. Year 2000 Compliance. FSSC and the Recordkeeping Agent will examine and test
their systems and, as of the date hereof, have no knowledge of any situation or
circumstance that will inhibit Recordkeeping Agent's ability to perform the
Recordkeeping Services as a result of any business interruptions or other
business problems relating to specific dates or days before, during, and after
the year 2000. In connection with the foregoing, FSSC and Recordkeeping Agent
will make reasonable inquiry of their respective business partners and other
entities with whom they conduct business and will carefully consider the
responses of those third-parties.

6. INDEMNIFICATION. Each party agrees to indemnify and hold harmless the other
party and its affiliates, employees, and agents (the "Indemnitees") against any
losses, claims, damages, liabilities or expenses to which an Indemnitee may
become subject insofar as those losses, claims, damages, liabilities or expenses
or actions in respect thereof, arise out of or are based upon (i) such party's
negligence or willful misconduct in carrying out its duties and responsibilities
under this Agreement, or (ii) any breach by such party of any material provision
of this Agreement. Such party will reimburse the Indemnitee for any legal or
other expenses reasonably incurred, as incurred, by them in connection with
investigating or defending such loss, claim or action. This indemnity agreement
will be in addition to any liability which the party may otherwise have.

7. Termination of Agreement. This Agreement may be terminated at any time by
either party upon 90 days' written notice to the other party. Notwithstanding
the foregoing, this Agreement shall be terminated immediately upon either: (i) a
material breach by either party not cured within 30 days after notice from the
other; or (ii) with respect to a particular Fund, upon termination of the
transfer agency agreement between FSSC (or any successor or assignee of FSSC)
and that Fund; or (iii) with regard to any Sub-account, upon termination of the
services of either party to such Sub-account. The provisions of Section 6 shall
survive any termination of the Agreement.

8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements fully executed and to be performed therein.

9. MODIFICATION. This Agreement may be modified or amended, and the terms of
this Agreement may be waived, only by a writing signed by each of the parties,
except that Federated may add or delete Funds from the list of available Funds
as it deems appropriate.

10. ASSIGNMENT OR SUBCONTRACTING. This Agreement shall not be assigned or
subcontracted by a party hereto, without the prior written consent of the other
parties hereto, except that party may assign or subcontract this Agreement to an
affiliate having the same ultimate ownership as the assigning or subcontracting
party without such consent.

11. FINANCIAL AND OPERATING INFORMATION. Recordkeeping Agent shall provide
either (i) annually a report completed by independent public accountants in
conformance with Statement on Auditing Standards # 70, if applicable, or (ii)
the Annual Study and Evaluation of Internal Accounting Control required under
Section 17Ad-13 of the Exchange Act, if applicable, and its audited financial
statements, if available, to the following address:

Federated Shareholder Services Company
Attn: Corporate Finance Group
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh Pennsylvania 15222-3779

12. There is no Section 12.

13. Non-Exclusivity. FSSC acknowledges and agrees that Recordkeeping Agent may
enter into agreements similar to this Agreement with organizations other than
FSSC which also serve as transfer agents for mutual funds. Recordkeeping Agent
acknowledges and agrees that nothing contained herein shall prohibit FSSC from
providing administrative, sub-accounting or recordkeeping services to any
defined contribution or other employee benefit plan or from soliciting any such
plan or sponsor thereof or any other administrator or recordkeeper to enter into
any arrangement with FSSC or any affiliate of FSSC for such services.

IN WITNESS WHEREOF, the undersigned have executed this Agreement by
their duly authorized officers as of the date first above written.

Federated Shareholder Services
Empire Professional Services, Inc. Company
(RECORDKEEPING AGENT) (FSSC)

By: /s/ Gus A Platas By:/s/ Thomas P. Sholes
Print Name: Gus A Platas Print Name: Thomas P. Sholes
Title: Vice President and General Manager Title: Vice President

Address:Empire Professional Services, Inc. Address:1001 Liberty Avenue
77 Sully's Trail Pittsburgh, PA 15222-3779
Pittsford, NY 14534

<PAGE>

EXHIBIT A
VISION GROUP OF FUNDS, INC.

Fund Name Cusip Number

Vision Capital Appreciation Fund 92830F 70 3

Vision Treasury Money Market Fund 92830F 10 9

Vision Money Market Fund 92830F 30 7

Vision U.S. Government Securities Fund 92830F 40 6

Vision Growth & Income Fund 92830F 60 4

Vision Equity Income Fund 92830F 80 2

Vision New York Municipal Income Fund 92830F 50 5

Vision New York Tax-Free Money Market Fund 92830F 20 8

<PAGE>

EXHIBIT B

Fee Schedule

Agent shall receive a fee at the rates set forth below:

o $7.00 per Sub-account
o

The amount of the fee shall be determined and shall become payable as of the
last business day of each month. Upon FSSC's request, Agent will provide FSSC
with an audit report of the records upon which such numbers are based.

It is understood and agreed that FSSC makes no representation or warranty as to
whether payment of the fees contemplated herein with respect to a retirement
plan constitutes a prohibited transaction as defined in Section 406 of The
Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. Sec. 1106),
or Section 4975 of The Internal Revenue Code of 1986 as amended (IRC) (26 U.S.C.
Sec. 4975)

<PAGE>

EXHIBIT C

Operational Guidelines

(1) FSSC shall establish one or, if necessary, a number of Accounts in each
Fund in Recordkeeping Agent's designated name. Recordkeeping for the
Sub-accounts will be the responsibility of Recordkeeping Agent.

(2) Recordkeeping Agent shall, on behalf of FSSC, receive from the
Sub-accounts for acceptance prior to the Close of Trading on each
Business Day: (i) orders for the purchase of shares of the Funds, and
(ii) redemption requests and redemption and exchange directions with
respect to shares of the Funds held by the Sub-accounts
("Instructions"). Recordkeeping Agent shall upon its acceptance of any
such Instructions, communicate such acceptance to the Sub-accounts.

(3) Recordkeeping Agent or its designee will communicate to FSSC, by means
of electronic transmission or other mutually acceptable means, a report
of the trading activity of each Account in any of the Funds for the
most recent Business Day in accordance with each Fund's prospectus.

(4) All wire payments referenced in this Agreement shall be transmitted via
the Federal Reserve Wire Transfer System. Notwithstanding any other
provision of this Agreement, in the event that the Federal Reserve Wire
Transfer System is closed on any Business Day, the duties of FSSC,
Recordkeeping Agent, and their designees under this Agreement shall be
suspended, and shall resume on the next Business Day that the Federal
Reserve Wire Transfer System is open as if such period of suspension
had not occurred.

Exhibit 9(vii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

Amendment #1 to
EXHIBIT A
to the Recordkeeping Agreement
between Empire Professional Services, Inc.
and Federated Shareholder Services Company,
dated August 18, 1998

VISION GROUP OF FUNDS, INC.

Fund Name Cusip Number

Vision Money Market Fund
Class A Shares 92830F 30 7
Class S Shares 92830F
-------

Vision Treasury Money Market Fund
Class A Shares 92830F 10 9
Class S Shares 92830F
-------

Vision New York Tax-Free Money Market Fund
Class A Shares 92830F 20 8

Vision U.S. Government Securities Fund
Class A Shares 92830F 40 6

Vision New York Municipal Income Fund
Class A Shares 92830F 50 5

Vision Mid Cap Value Fund
(formerly: Vision Growth & Income Fund)
Class A Shares 92830F 60 4
Class B Shares 92830F
------

Vision Mid Cap Growth Fund
(formerly: Vision Capital Appreciation Fund)
Class A Shares 92830F 70 3
Class B Shares 92830F
------

Vision Large Cap Value Fund
(formerly: Vision Equity Income Fund)
Class A Shares 92830F 80 2
Class B Shares 92830F
------

Vision Large Cap Growth Fund
Class A Shares 92830F
Class B Shares 92830F

<PAGE>

Vision High Yield Bond Fund
Class A Shares 92830F

As revised: May 1, 1999

EMPIRE PROFESSIONAL SERVICES, INC.

By:
Name:
Title:

FEDERATED SHAREHOLDER SERVICES COMPANY

By:
Name:
Title:

Exhibit 9(viii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

Retirement Plan Service Company of America
Sub-Transfer Agency Agreement

This Agreement made effective the 20th day of February, 1998, is entered into by
and among Federated Services Company, a Delaware business trust having its
principal office and place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, ("TA"), Retirement Plan Service Company of America, a
Delaware business trust having its and place of business at 5800 Corporate
Drive, Building 2, Pittsburgh, Pennsylvania 15237-5829, ("Agent") and Vision
Group of Funds, Inc., on behalf of each portfolio listed on Exhibit A and such
additional investment portfolios as may, by resolution, agree to the appointment
of Agent thereunder (collectively the "Funds").

WHEREAS, Agent is a registered Transfer Agent.

WHEREAS, TA has entered into an Agreement for Fund Accounting and
Transfer Agency Services ("TA Agreement") with the Funds, pursuant to which the
Funds have appointed TA as transfer agent to the Funds and each portfolio
thereunder; and

WHEREAS, the Agent provides shareholder recordkeeping and valuation,
which may include processing services for various retirement plans (the
"Plans"); and

WHEREAS, certain of the Plans intend to invest in one or more of the Funds;
and

WHEREAS, the Funds desire and instruct TA to appoint Agent as its
sub-transfer agent for the limited purposes set forth herein;

NOW THEREFORE, in consideration of the premises and mutual promises set
forth herein, TA, the Funds and Agent agree as follows:

Article 1. Appointment of Agent.

TA appoints Agent as sub-transfer agent for the purposes of receiving
and transmitting orders for the purchase and redemption of Fund shares. Agent
agrees to accept such appointment.

Article 2. Duties of Agent.

Agent agrees that it will perform its duties in accordance with the
operating procedures (the Procedures") attached hereto as Exhibit B.

Article 3. Fees and Expenses.

A. Annual Fee

For performance by Agent pursuant to this appointment, Funds
agree to pay Agent an annual fee of $12 per participant account
for each fund. Such fees may be changed from time to time by
mutual written agreement.

B. Payment

Agent will provide TA with:

1. Total number of participants invested in the Funds.

2. Number of participants per Fund.

3. An invoice for the total fee due to the Agent.

Article 4. Representations and Warranties.

A. Representations and Warranties of Agent

Agent represents and warrants to TA and the Funds that:

1. It is a business trust duly organized and existing
and in good standing under the laws of the state of
Delaware.

2. It is empowered under applicable laws and by its
charter and by-laws to enter into and perform under
this Agreement.

3. All requisite corporate proceedings have been taken
to authorize it to enter into and perform under
this Agreement.

4. It has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement.

B. Representations and Warranties of TA

TA represents and warrants to Agent that:

1. It is a business trust duly organized and existing
and in good standing under the laws of the State of
Delaware.

2. It is empowered under applicable laws and by its
charter and by-laws and by the Funds to enter into
and perform this Agreement.

3. All requisite corporate proceedings have been taken
to authorize it to enter into and perform under
this Agreement.

4. It has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Appointment.

5. It is in compliance with federal securities law
requirements and in good standing as a sub-transfer agent.

It is understood and agreed that TA makes no representation or
warranty as to whether payment of the fees contemplated herein
with respect to a retirement plan constitutes a prohibited
transaction as defined in ss.406 of The Employee Retirement
Income Security Act of 1974 (ERISA) (29 U.S.C. 1106), or ss.4975
of The Internal Revenue Code of 1986 as amended (IRC) (26 U.S.C.
ss.4975).

C. Representations and Warranties of the Funds

The Funds hereby represent and warrant that except as noted on
Exhibit A:

1. The Funds either are or are a component of a
Corporation organized and existing and in good
standing under the laws of the State of Maryland.

2. Each Fund is empowered under applicable laws and by
its Organization Documents and By-Laws to enter
into the TA Agreement.

3. All corporate proceedings required by said
organization documents and By-Laws have been taken
to authorize it to enter into and perform under
this Agreement.

4. Each Fund is an open-end investment company registered
under the 1940 Act ("Investment Company").

5. A registration statement under the 1933 Act will be
effective, and appropriate state securities law
filings have been made and will continue to be
made, with respect to all Shares of each Fund being
offered for sale.

Article 5. Covenants.

A. Covenants of Agent

Agent covenants that Agent shall utilize and employ all
reasonable control procedures available in its performance of
the services rendered hereunder, and Agent shall promptly advise
TA of any errors or mistakes in the data or information
transmitted to TA, the records maintained or output generated
thereby and, using normal audit and control procedures, Agent
shall verify all information received from TA;

B. Covenants of TA

TA covenants that TA shall promptly advise Agent of any errors
or mistakes in the data or information transmitted to Agent, the
records or output generated thereby, and, using normal audit and
control procedures, TA shall verify all information received
from Agent.

Article 6. Standard of Care/Indemnification.

A. Standard of Care

Agent shall be held to a standard of reasonable care in carrying
out the provisions of this Agreement; provided, however that
Agent shall be held to any higher standard of care which would
be imposed upon Agent by any applicable law or regulation.

B. Indemnification by Agent

TA and the Funds and their officers, directors and employees
shall not be responsible for and Agent shall indemnify and hold
TA and the Funds and their officers directors and employees
harmless against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities arising out of
or attributable to:

1. The Agent's refusal or failure to comply with the
terms of this Agreement, or which arise out of the
Agent's lack of good faith, gross negligence or
willful misconduct or which arise out of the breach
of any material representation or warranty of Agent
hereunder.

2. The reliance on or use by Fund or TA or their
sub-transfer agents or subcontractors of
information, records and documents in proper form
which:

(a) are received by Fund or TA or their
sub-transfer agents or subcontractors and
furnished to them by or on behalf of Agent,
regarding the purchase, redemption or
transfer of shares, or

(b) have been prepared and/or maintained by
Agent or its affiliates or any other person
or firm on behalf of Agent.

Notwithstanding the above, the TA shall not be protected by this
Article 6.B. from liability for any act or omission resulting
from TA's lack of good faith, gross negligence, or willful
misconduct.

C. Reliance

At any time TA or Agent may apply to any officer of a Fund for
instructions, and may consult with legal counsel with respect to
any matter arising in connection with the services to be
performed by TA or Agent under this Agreement, and TA and its
sub-transfer agents or subcontractors and Agent and its agents
or subcontractors shall not be liable and shall be indemnified
by the appropriate Fund for any action reasonably taken or
omitted by it in reliance upon such instructions or upon the
opinion of such counsel provided such action is not in violation
of applicable Federal or state laws or regulations.

D. Notification

In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The party who
may be required to indemnify shall have the option to
participate with the party seeking indemnification in the
defense of such claim. The party seeking indemnification shall
in no case confess any claim or make any compromise in any case
in which the other party may be required to indemnify it except
with the other party's prior written consent.

Article 7. Amendment.

TA shall not agree to any amendment or waiver of the provisions of the
TA Agreement which would affect Agent's interests hereunder without the written
consent of Agent, which shall not be unreasonably withheld. This Agreement may
be terminated at any time by sixty (60) days' written notice given by Agent to
TA or by TA to Agent; provided, however, that this Agreement may be terminated
immediately at any time by TA in the event that the TA Agreement is terminated,
or in the event that Agent fails to cure a breach of, or a failure to perform
its duties under this Appointment within thirty (30) days following written
notice of such breach or failure.

Article 8. Miscellaneous.

A. Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes
hereof. This Agreement may be executed simultaneously in
counterparts, each of which taken together shall constitute one
and the same instrument.

B. The provisions of this Agreement shall in no way limit the
authority of the Funds or their representatives to take such
action as it or they may deem appropriate or advisable in
connection with all matters relating to the operations of such
Fund and/or sale of its shares.

Article 9. Notices.

Except as otherwise specifically provided herein, Notices and other
writings may be delivered or mailed postage prepaid to the Funds at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7010, to TA at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and to Agent at 5800
Corporate Drive, Building 2, Pittsburgh, Pennsylvania 15237-5829.

Article 10. Merger of Agreement.

This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.

Article 11. Force Majeure.

No party to this agreement shall have any liability for cessation of
services hereunder or any damages resulting therefrom to any other party
hereunder as a result of work stoppage, power or other mechanical failure,
natural disaster, governmental action, communication disruption or other
impossibility of performance.

Article 12: Limitation of Liability

Agent is hereby expressly put on notice of the limitation of liability
as set forth in the Declarations of Trust of the TA and agrees that the
obligations assumed by the TA pursuant to this Agreement shall be limited in any
case to the TA and its respective assets, and Agent shall not seek satisfaction
of any such obligation from the shareholders of the TA, the Trustees, officers,
employees or sub-transfer agents of the TA, or any of them.

Article 13. Severability.

In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the 20th day of February, 1998.

FEDERATED SERVICES COMPANY

By: /s/ Lawrence L. Caracciolo
Lawrence L. Caracciolo
Senior Vice President

RETIREMENT PLAN SERVICE COMPANY OF AMERICA

By: /s/ Timothy J. Ciccone
Timothy J. Ciccone
Vice President, Business Development

VISION GROUP OF FUNDS, INC.

By: /s/ Beth S. Broderick
Typed Name: Beth S. Broderick
Title: Vice President

<PAGE>

EXHIBIT A

Fund Name Cusip Number
Vision Capital Appreciation Fund 92830F 70 3
Vision Treasury Money Market 92830F 10 9
Vision Money Market 92830F 30 7
Vision U.S. Government Securities 92830F 40 6
Vision Growth & Income 92830F 60 4
Vision Equity Income Fund 92830F 80 2
Vision New York Municipal Income Fund 92830F 50 5
Vision New York Tax-Free Money Market Fund 92830F 20 8

<PAGE>

EXHIBIT B

Operating Procedures

TA will establish a single, separate account for the interest of each Plan
in each of the Funds selected. Agent will maintain Plan participant accounts.
Agent will separately place purchase and redemption orders for each Plan with TA
in accordance with the procedures listed below.

1. All orders accepted and transmitted by Agent hereunder with respect to each
Plan on any business day will be based upon instructions that it received
from the Plan or Plan participants in proper form prior to 4:00 p.m. ET on
that business day (day 1).

2. TA will furnish Agent by 7:00 p.m. (day 1) the net asset value per share as
of the close of business and any appropriate accrual/dividend factors for
all Funds.

3. TA will accept net trade orders from Agent until 8:00 a.m. on the following
business day (day 2). These trades will be entered at the net asset value
as of the close of business on day 1.

4. The settlement date for all trades is day 2. Settlements shall be made by
Fed Wire transfer between the trustee or custodian of the Plan and the
Fund.

5. TA will furnish Agent a confirmation with respect to each order placed
hereunder. Upon receipt of each confirmation Agent shall verify its
accuracy and shall notify TA of any errors appearing thereon.

6. TA shall promptly furnish Agent with notice of any dividends or
distributions payable on the shares of each Fund. All such dividends and
distributions shall be automatically reinvested in additional shares of the
Funds. TA shall notify Agent as to the number of shares so issued.

7. TA shall provide Agent with semi-annual and annual reports and proxy
materials for each Fund and such other information with respect to each
Fund as Agent may reasonably request.

8. Agent shall transmit to TA such information concerning the Plans and
participants in the Plans as TA shall reasonably request to perform its
duties under this Agreement and the TA Agreements and to enable Funds to
comply with applicable state Blue Sky laws, and all other laws and
regulations.

Exhibit 9(ix) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

Amendment No. 1 to EXHIBIT A
to the Sub-Transfer Agency Agreement
among Federated Services Company,
Retirement Plan Service Company of America and
Vision Group of Funds, Inc.
dated February 20, 1998