TOWER TOTAL RETURN BOND FUND
(A PORTFOLIO OF TOWER MUTUAL FUNDS)
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SUPPLEMENT TO PROSPECTUS DATED OCTOBER 31, 1993
A. Please delete the "Summary of Fund Expenses" appearing on page 1 and
replace it with the following:
SUMMARY OF FUND EXPENSES
---------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................................... 3.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................................... None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, as applicable)........................ None
Redemption Fees (as a percentage of amount redeemed, if applicable)............ None
Exchange Fee................................................................... None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee................................................................. 0.70%
12b-1 Fees..................................................................... 0.25%
Total Other Expenses........................................................... 0.45%
Total Fund Operating Expenses(1).......................................... 1.40%
</TABLE>
(1) Total Fund Operating Expenses were 0.77% for the fiscal year ended
August 31, 1993. The Total Fund Operating Expenses in the table above
reflect a reduction in the voluntary waiver of the investment advisory fee
and implementation of the 12b-1 fee for the fiscal year ending August 31,
1994.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING
THE VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR,
EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "TOWER MUTUAL FUNDS INFORMATION" AND
"INVESTING IN THE FUND." Wire-transferred redemptions of less than $5,000
may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
---------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period. The
Fund charges no redemption fees..................... $ 44 $73 $ 104 $193
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
B. Please delete the first sentence of the second paragraph in the section
entitled "General Information" on page 3 and replace it with the following
sentence:
"Fund shares are sold at net asset value plus a maximum sales charge of 3.00%
and redeemed at net asset value."
C. Please delete the table in the section entitled "What Shares Cost" on page 13
and insert the following in its place:
<TABLE>
<CAPTION>
SALES CHARGE AS A SALES CHARGE AS A
PERCENTAGE OF PUBLIC PERCENTAGE OF NET
AMOUNT OF TRANSACTION INVESTED OFFERING PRICE AMOUNT INVESTED
- ----------------------------------- ---------------------- ------------------
<S> <C> <C>
Less than $100,000 3.00% 3.09%
$100,000 but less than $250,000 2.75% 2.83%
$250,000 but less than $500,000 2.00% 2.04%
$500,000 but less than $750,000 1.00% 1.01%
$750,000 but less than $1 million 0.75% 0.76%
$1 million but less than $2 million 0.50% 0.50%
$2 million or more 0.25% 0.25%
</TABLE>
D. Please delete the example contained in the second paragraph in the
sub-section entitled "Quantity Discounts and Accumulated Purchases" on page
14 and replace it with the following:
"For example, if a shareholder already owns shares having a current value at
the public offering price of $90,000 and he purchases $10,000 more at the
current public offering price, the sales charge on the additional purchase
according to the schedule now in effect would be 2.75%, not 3.00%."
E. In the sub-section entitled "Letter of Intent" on page 14, please delete the
last sentence of the first paragraph and the first sentence of the second
paragraph and insert the following information in its place:
"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 Fund's custodian to hold 3.00% of the total amount intended
to be purchased in escrow (in shares of the Fund) until such purchase is
completed.
The 3.00% 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."
April 29, 1994
FEDERATED SECURITIES CORP.
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Distributor
4032803A (4/94)
TOWER CAPITAL APPRECIATION FUND
(A PORTFOLIO OF TOWER MUTUAL FUNDS)
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SUPPLEMENT TO PROSPECTUS DATED OCTOBER 31, 1993
A. Please delete the "Summary of Fund Expenses" appearing on page 1 and
replace it with the following:
SUMMARY OF FUND EXPENSES
---------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................................... 3.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................................... None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, as applicable)........................ None
Redemption Fees (as a percentage of amount redeemed, if applicable)............ None
Exchange Fee................................................................... None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee................................................................. 0.75%
12b-1 Fees..................................................................... 0.25%
Total Other Expenses........................................................... 0.26%
Total Fund Operating Expenses(1).......................................... 1.26%
</TABLE>
(1) Total Fund Operating Expenses were 0.85% for the fiscal year ended
August 31, 1993. The Total Fund Operating Expenses in the table above
reflect a reduction in the voluntary waiver of the investment advisory fee
and implementation of the 12b-1 fee for the fiscal year ending August 31,
1994.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING
THE VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR,
EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "TOWER MUTUAL FUNDS INFORMATION" AND
"INVESTING IN THE FUND." Wire-transferred redemptions of less than $5,000
may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
---------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period. The
Fund charges no redemption fees..................... $ 42 $69 $97 $178
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
B. Please delete the first sentence of the second paragraph in the section
entitled "General Information" on page 3 and replace it with the following
sentence:
"Fund shares are sold at net asset value plus a maximum sales charge of 3.00%
and redeemed at net asset value."
C. Please delete the table in the section entitled "What Shares Cost" on page 10
and insert the following in its place:
<TABLE>
<CAPTION>
SALES CHARGE AS A SALES CHARGE AS A
PERCENTAGE OF PUBLIC PERCENTAGE OF NET
AMOUNT OF TRANSACTION INVESTED OFFERING PRICE AMOUNT INVESTED
- ----------------------------------- ---------------------- ------------------
<S> <C> <C>
Less than $100,000 3.00% 3.09%
$100,000 but less than $250,000 2.75% 2.83%
$250,000 but less than $500,000 2.00% 2.04%
$500,000 but less than $750,000 1.00% 1.01%
$750,000 but less than $1 million 0.75% 0.76%
$1 million but less than $2 million 0.50% 0.50%
$2 million or more 0.25% 0.25%
</TABLE>
D. Please delete the example contained in the second paragraph in the
sub-section entitled "Quantity Discounts and Accumulated Purchases" on page
11 and replace it with the following:
"For example, if a shareholder already owns shares having a current value at
the public offering price of $90,000 and he purchases $10,000 more at the
current public offering price, the sales charge on the additional purchase
according to the schedule now in effect would be 2.75%, not 3.00%."
E. In the sub-section entitled "Letter of Intent" on page 11, please delete the
last sentence of the first paragraph and the first sentence of the second
paragraph and insert the following information in its place:
"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 Fund's custodian to hold 3.00% of the total amount intended
to be purchased in escrow (in shares of the Fund) until such purchase is
completed.
The 3.00% 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."
April 29, 1994
FEDERATED SECURITIES CORP.
- --------------------------------------------------------------------------------
Distributor
4032804A (4/94)
