<PAGE> 1
AMSOUTH MUTUAL FUNDS
GROWTH FUNDS
SUPPLEMENT DATED FEBRUARY 16, 1996
TO PROSPECTUS DATED NOVEMBER 30, 1995
Capitalized terms used in this Supplement have the meaning assigned to them in
the Prospectus.
The Fee Table that appears on page 2 is amended as follows to reflect a change
in the Management Fees of the Balanced Fund resulting from a termination of the
Voluntary Fee Reduction:
FEE TABLE
<TABLE>
<CAPTION>
Regional
Equity Equity Balanced
Fund Fund Fund
------ -------- ----
<S> <C> <C> <C>
Shareholder Transaction Expenses1
--------------------------------
Maximum Sales Load Imposed on Purchases 4.50% 4.50% 4.50%
(as a percentage of offering price)
Maximum Sales Load Imposed on Reinvested 0% 0% 0%
Dividends (as a percentage of offering price)
Deferred Sales Load (as a percentage
of original purchase price or redemption
proceeds, as applicable) 0% 0% 0%
Redemption Fees (as a percentage 0% 0% 0%
of amount redeemed, if applicable)2
Exchange Fee $0 $0 $0
Annual Fund Operating Expenses
------------------------------
(as a percentage of net assets)
Management Fees .80% .80% .80%
12b-1 Fees .00% .00% .00%
Other Expenses (After Voluntary Fee .23% .27% .24%
Reduction) 3
Total Fund Operating Expenses4 1.03% 1.07% 1.04%
===== ===== ======
</TABLE>
<PAGE> 2
Example:
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:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity Fund $55 $76 $99 $165
Regional Equity Fund $55 $78 $101 $170
Balanced Fund $55 $77 $100 $166
- --------------------
</TABLE>
1 AmSouth Bank of Alabama and its correspondent or affiliated banks
may charge a Customer's (as defined in the Prospectus) account fees for
automatic investment and other cash management services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE AND REDEEM SHARES -
Purchases of Shares.")
2 A wire redemption charge is deducted from the amount of a wire
redemption payment made at the request of a shareholder. (See "HOW TO PURCHASE
AND REDEEM SHARES - Redemption by Telephone.")
3 Absent the voluntary reduction of administration fees, Other
Expenses are estimated to be .31% for the Equity Fund, .35% for the Regional
Equity Fund and .32% for the Balanced Fund.
4 In the absence of any voluntary reduction in administration fees,
Total Fund Operating Expenses are estimated to be 1.11% for the Equity Fund,
1.15% for the Regional Equity Fund and 1.12% for the Balanced Fund.
The purpose of the table above is to assist an investor in the Fund in
understanding the various costs and expenses that an investor in a Growth Fund
will bear directly or indirectly. See "MANAGEMENT OF AMSOUTH MUTUAL FUNDS" for
a more complete discussion of annual operating expenses of the Growth Funds.
THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
-2-
<PAGE> 3
AMSOUTH MUTUAL FUNDS
GROWTH FUNDS
<TABLE>
<S> <C>
3435 Stelzer Road For current yield, purchase, and redemption
Columbus, Ohio 43219 information, call (800) 451-8382
</TABLE>
The AmSouth Mutual Funds Growth Funds (the "Growth Funds") are three of
twelve separate investment funds of AmSouth Mutual Funds (the "Trust"), a
diversified, open-end management investment company. Each of the Growth Funds
has a different investment objective and the net asset value per share of each
Growth Fund will fluctuate as the value of such Growth Fund's investment
portfolio changes in response to changing market conditions and other factors.
AMSOUTH EQUITY FUND (the "Equity Fund") seeks growth of capital by
investing primarily in a diversified portfolio of common stocks and securities
convertible into common stocks such as convertible bonds and convertible
preferred stocks. The production of income is an incidental objective. AmSouth
Bank of Alabama, Birmingham, Alabama ("AmSouth"), the Growth Funds' investment
advisor, will seek opportunities for the Equity Fund in securities that are
believed to represent investment value. (See "INVESTMENT OBJECTIVES AND
POLICIES.")
AMSOUTH REGIONAL EQUITY FUND (the "Regional Equity Fund") seeks growth of
capital by investing primarily in a diversified portfolio of common stocks and
securities convertible into common stocks, such as convertible bonds and
convertible preferred stocks, of companies headquartered in the Southern Region
of the United States. The Southern Region of the United States includes Alabama,
Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina,
Tennessee and Virginia. The production of income is an incidental objective.
AmSouth will seek opportunities for the Regional Equity Fund in securities that
are believed to represent investment value. (See "INVESTMENT OBJECTIVES AND
POLICIES.")
AMSOUTH BALANCED FUND (the "Balanced Fund") seeks to obtain long-term
capital growth and produce a reasonable amount of current income through a
moderately aggressive investment strategy. The Balanced Fund seeks to achieve
this objective by investing in a broadly diversified portfolio of securities,
including common stocks, preferred stocks and bonds. AmSouth will seek
opportunities for the Balanced Fund in securities that are believed to represent
investment value. (See "INVESTMENT OBJECTIVES AND POLICIES.")
AmSouth Bank of Alabama, Birmingham, Alabama ("AmSouth"), acts as the
investment advisor to each Growth Fund. BISYS Fund Services, Limited Partnership
("BISYS Fund Services"), formerly The Winsbury Company, Columbus, Ohio, acts as
the Growth Funds' distributor.
This Prospectus relates only to the Growth Funds. Interested persons who
wish to obtain a copy of the prospectuses of the AmSouth Prime Obligations Fund,
the AmSouth U.S. Treasury Fund, and the AmSouth Tax Exempt Fund (the "Money
Market Funds"); the AmSouth Bond Fund, the AmSouth Limited Maturity Fund, and
the AmSouth Government Income Fund (the "Income Funds"); or the AmSouth
Municipal Bond Fund, the AmSouth Alabama Tax-Free Fund and the AmSouth Florida
Tax-Free Fund (the "Tax-Free Funds") may contact the Trust's distributor at the
telephone number shown above. Additional information about the Growth Funds,
contained in a Statement of Additional Information, has been filed with the
Securities and Exchange Commission and is available upon request without charge
by writing to the Trust at its address or by calling the Trust at the telephone
number shown above. The Statement of Additional Information bears the same date
as this Prospectus and is incorporated by reference in its entirety into this
Prospectus.
This Prospectus sets forth concisely the information about the Growth Funds
that a prospective investor ought to know before investing. Investors should
read this Prospectus and retain it for future reference.
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY AMSOUTH OR ANY OF ITS AFFILIATES. THE TRUST'S SHARES
ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR BY ANY OTHER
AGENCY. AN INVESTMENT IN THE TRUST'S SHARES INVOLVES
INVESTMENT RISKS, INCLUDING LOSS OF PRINCIPAL.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("COMMISSION") OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this prospectus is November 30, 1995.
<PAGE> 4
THE TRUST
The Trust is a diversified, open-end management investment company. The
Trust consists of twelve series of units of beneficial interest ("Shares"), each
representing interests in one of twelve separate investment funds (the "Funds").
This Prospectus relates only to the Growth Funds. Interested persons who
wish to obtain a copy of the prospectuses of the Money Market Funds, the Income
Funds, or the Tax-Free Funds may contact the Trust at the telephone number shown
on the front cover of this Prospectus.
FEE TABLE
<TABLE>
<CAPTION>
REGIONAL
EQUITY EQUITY BALANCED
FUND FUND FUND
----------- ------- ------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES1
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................ 4.50% 4.50% 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................ 0% 0% 0%
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, as applicable)................................ 0% 0% 0%
Redemption Fees (as a percentage of amount redeemed, if
applicable)2....................................................... 0% 0% 0%
Exchange Fee......................................................... $0 $0 $0
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
Management Fees (After Voluntary Fee Reduction for the Balanced
Fund).............................................................. .80% .80% .70%3
12b-1 Fees........................................................... .00% .00% .00%
Other Expenses (After Voluntary Fee Reduction)4...................... .23% .27% .24%
--- ------- ------
Total Fund Operating Expenses5....................................... 1.03% 1.07% .94%
========== ========= =======
EXAMPLE:
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:
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity Fund........................................................ $ 55 $76 $ 99 $165
Regional Equity Fund............................................... $ 55 $78 $ 101 $170
Balanced Fund...................................................... $ 54 $74 $ 95 $155
</TABLE>
- ------------
1 AmSouth Bank of Alabama and its correspondent or affiliated banks may charge a
Customer's (as defined in the Prospectus) account fees for automatic
investment and other cash management services provided in connection with
investment in the Funds. (See "HOW TO PURCHASE AND REDEEM SHARES -- Purchases
of Shares.")
2 A wire redemption charge is deducted from the amount of a wire redemption
payment made at the request of a shareholder. (See "HOW TO PURCHASE AND REDEEM
SHARES -- Redemption by Telephone.")
3 Absent the voluntary reduction of investment advisory fees, Management Fees as
a percentage of average net assets would be .80% for the Balanced Fund. (See
"MANAGEMENT OF AMSOUTH MUTUAL FUNDS -- Investment Advisor.")
4 Absent the voluntary reduction of administration fees, Other Expenses are
estimated to be .31% for the Equity Fund, .35% for the Regional Equity Fund
and .32% for the Balanced Fund.
5 In the absence of any voluntary reduction in investment advisory and
administration fees, Total Fund Operating Expenses are estimated to be 1.11%
for the Equity Fund, 1.15% for the Regional Equity Fund and 1.12% for the
Balanced Fund.
The purpose of the table above is to assist an investor in the Fund in
understanding the various costs and expenses that an investor in a Growth Fund
will bear directly or indirectly. See "MANAGEMENT OF AMSOUTH MUTUAL FUNDS" for a
more complete discussion of annual operating expenses of the Growth Funds. THE
FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
2
<PAGE> 5
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information concerning the
investment results for each of the Growth Funds for the periods indicated. This
information has been derived from financial statements audited by Coopers &
Lybrand L.L.P., independent accountants for the Trust, whose report thereon is
included in the Statement of Additional Information. Further financial data is
included in the Statement of Additional Information.
<TABLE>
<CAPTION>
EQUITY FUND
----------------------------------------------------------------------------------------
DECEMBER 1,
YEAR ENDED JULY 31, 1988 TO
----------------------------------------------------------------------- JULY 31,
1995 1994 1993 1992 1991 1990 1989(A)
-------- -------- -------- -------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 14.82 $ 14.38 $ 13.40 $ 12.57 $ 11.99 $ 12.18 $10.00
-------- -------- -------- -------- ------- ------- ------
INVESTMENT ACTIVITIES
Net Investment income................. 0.33 0.28 0.28 0.32 0.36 0.37 0.22
Net realized and unrealized gain
(loss) on investments............... 2.39 0.83 1.48 1.20 0.61 (0.17) 2.16
-------- -------- -------- -------- ------- ------- ------
Total from Investment Activities.... 2.72 1.11 1.76 1.52 0.97 0.20 2.38
-------- -------- -------- -------- ------- ------- ------
DISTRIBUTIONS
Net investment income................. (0.32) (0.28) (0.29) (0.33) (0.37) (0.35) (0.20)
Net realized gains.................... (0.47) (0.39) (0.49) (0.36) (0.02) (0.04)
-------- -------- -------- -------- ------- ------- ------
Total Distributions................. (0.79) (0.67) (0.78) (0.69) (0.39) (0.39) (0.20)
-------- -------- -------- -------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD......... $ 16.75 $ 14.82 $ 14.38 $ 13.40 $ 12.57 $ 11.99 $12.18
========== ========== ========== ========== ======== ======== ==============
Total Return (Excluding Sales
Charge)............................. 19.27% 7.90% 13.81% 12.94% 8.46% 1.66% 24.06%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)..... $275,757 $205,611 $153,074 $107,934 $32,406 $14,383 $5,476
Ratio of expenses to average net
assets.............................. 1.03% 0.94% 0.95% 1.01% 1.15% 1.11% 1.16%(b)
Ratio of net investment income to
average net assets.................. 2.17% 1.93% 2.08% 2.50% 3.16% 3.16% 2.91%(b)
Ratio of expenses to average net
assets*............................. 1.11% 1.11% 1.13% 1.15% 1.26% 1.41% 2.34%(b)
Ratio of net investment income to
average net assets*................. 2.09% 1.76% 1.90% 2.36% 3.04% 2.86% 1.73%(b)
PORTFOLIO TURNOVER..................... 19.46% 11.37% 15.12% 113.12% 15.78% 14.89% 4.03%
</TABLE>
<TABLE>
<CAPTION>
REGIONAL EQUITY FUND
---------------------------------------------------------------------------------
DECEMBER 1,
YEAR ENDED JULY 31, 1988 TO
----------------------------------------------------------------- JULY 31,
1995 1994 1993 1992 1991 1990 1989(A)
------- ------- ------- ------- ------ ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......... $ 16.68 $ 16.74 $ 14.86 $ 13.44 $12.45 $11.64 $10.00
------- ------- ------- ------- ------ ------ ------
INVESTMENT ACTIVITIES
Net Investment income........................ 0.23 0.23 0.19 0.23 0.26 0.23 0.14
Net realized and unrealized gain (loss) on
investments................................ 2.26 0.58 2.09 2.34 1.20 0.84 1.64
------- ------- ------- ------- ------ ------ ------
Total from Investment Activities........... 2.49 0.81 2.28 2.57 1.46 1.07 1.78
------- ------- ------- ------- ------ ------ ------
DISTRIBUTIONS
Net investment income........................ (0.23) (0.23) (0.20) (0.23) (0.26) (0.22) (0.14)
Net realized gains........................... (0.41) (0.20) (0.92) (0.21) (0.04)
In excess of net realized gains.............. (0.23)
------- ------- ------- ------- ------ ------ ------
Total Distributions........................ (0.23) (0.87) (0.40) (1.15) (0.47) (0.26) (0.14)
------- ------- ------- ------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD................ $ 18.94 $ 16.68 $ 16.74 $ 14.86 $13.44 $12.45 $11.64
======== ======== ======== ======== ======= ======= ==============
Total Return (Excluding Sales Charge)........ 15.10% 4.87% 15.53% 20.66% 12.52% 9.41% 17.79%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)............ $68,501 $54,744 $41,347 $15,707 $7,853 $3,161 $2,523
Ratio of expenses to average net assets...... 1.07% 0.79% 0.80% 0.91% 0.79% 1.22% 1.41%(b)
Ratio of net investment income to average net
assets..................................... 1.35% 1.36% 1.17% 1.61% 2.21% 1.92% 1.98%(b)
Ratio of expenses to average net assets*..... 1.15% 1.24% 1.28% 1.36% 1.58% 2.32% 2.65%(b)
Ratio of net investment income to average net
assets*.................................... 1.27% 0.90% 0.69% 1.16% 1.42% 0.82% 0.74%(b)
PORTFOLIO TURNOVER............................ 14.25% 5.83% 10.22% 24.99% 14.41% 14.00% 1.13%
</TABLE>
- ------------
* During the period the investment advisory and/or administration fees were
voluntarily reduced. If such voluntary fee reductions had not occurred, the
ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
3
<PAGE> 6
<TABLE>
<CAPTION>
BALANCED FUND
--------------------------------------------------------
YEAR ENDED JULY 31,
-------------------------------- DECEMBER 19, 1991
1995 1994 1993 TO JULY 31, 1992(A)
-------- -------- -------- --------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......... $ 11.81 $ 11.86 $ 11.12 $ 10.00
-------- -------- -------- -----------
INVESTMENT ACTIVITIES
Net Investment income....................... 0.47 0.42 0.44 0.27
Net realized and unrealized gain (loss) on
investments.............................. 1.24 0.18 0.80 1.09
-------- -------- -------- -----------
Total from Investment Activities......... 1.71 0.60 1.24 1.36
-------- -------- -------- -----------
DISTRIBUTIONS
Net investment income....................... (0.46) (0.42) (0.45) (0.24)
Net realized gains.......................... (0.30) (0.23) (0.05)
-------- -------- -------- -----------
Total Distributions...................... (0.76) (0.65) (0.50) (0.24)
-------- -------- -------- -----------
NET ASSET VALUE, END OF PERIOD................ $ 12.76 $ 11.81 $ 11.86 $ 11.12
======== ======== ======== ==============
Total Return (Excluding Sales Charge)....... 15.27% 5.13% 11.47% 13.71%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)........... $295,509 $236,306 $179,134 $143,813
Ratio of expenses to average net assets..... 0.94% 0.84% 0.84% 0.83%(b)
Ratio of net investment income to average
net assets............................... 3.91% 3.56% 3.90% 4.45%(b)
Ratio of expenses to average net assets*.... 1.12% 1.11% 1.12% 1.17%(b)
Ratio of net investment income to average
net assets*.............................. 3.73% 3.28% 3.62% 4.10%(b)
PORTFOLIO TURNOVER............................ 16.97% 14.43% 11.09% 23.18%
</TABLE>
- ------------
* During the period the investment advisory and administration fees were
voluntarily reduced. If such voluntary fee reductions had not occurred, the
ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
4
<PAGE> 7
INVESTMENT OBJECTIVES AND POLICIES
THE EQUITY FUND AND THE REGIONAL EQUITY FUND seek capital growth by investing
primarily in a diversified portfolio of common stock and securities convertible
into common stock, such as convertible bonds and convertible preferred stock. In
the case of the Regional Equity Fund, such securities must be issued by
companies headquartered in the Southern Region of the United States which
includes Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina,
South Carolina, Tennessee and Virginia. The production of current income is an
incidental objective of both the Equity Fund and the Regional Equity Fund.
THE BALANCED FUND seeks to obtain long-term capital growth and produce a
reasonable amount of current income through a moderately aggressive investment
strategy. The Balanced Fund seeks to achieve this objective by investing in a
broadly diversified portfolio of securities, including common stocks, preferred
stocks and bonds.
The investment objective of a Growth Fund may not be changed without a
majority of the outstanding shares of that Fund (as defined in "GENERAL
INFORMATION -- Miscellaneous"). There can be no assurance that the investment
objectives of any of the Growth Funds will be achieved.
As investment advisor to the Growth Funds, AmSouth will seek to invest in
equity securities which are believed to represent investment value. Factors
which AmSouth may consider in selecting equity securities include industry and
company fundamentals, historical price relationships, and/or underlying asset
value. The Equity Fund will invest primarily in domestic and foreign companies,
and the Regional Equity Fund and the Balanced Fund will invest principally in
domestic companies, in each case in a variety of industries. Most companies in
which the Growth Funds will invest will be listed on national securities
exchanges.
AmSouth will also use a variety of economic projections, technical analysis,
and earnings projections in formulating individual stock purchase and sale
decisions. AmSouth will select investments that it believes have basic
investment value which will eventually be recognized by other investors, thus
increasing their value to the Growth Funds. In the selection of the Growth
Funds' investments, AmSouth may therefore be making investment decisions which
could be contrary to the present expectations of other professional investors.
These decisions may involve greater risks compared to other mutual funds, of
either (a) more accurate assessment by other investors, in which case losses may
be incurred by a Growth Fund, or (b) long delay in investor recognition of the
accuracy of the investment decisions of a Growth Fund, in which case invested
capital of a Growth Fund in an individual security or group of securities may
not appreciate for an extended period.
The equity securities in which the Growth Funds may invest may be subject to
wider fluctuations in value than some other forms of investment. Depending upon
the performance of a Growth Fund's investments, the net asset value per Share of
such Fund may decrease instead of increase.
The portion of the Balanced Fund's assets invested in equity and debt
securities will vary in accordance with economic conditions, the general level
of common stock prices, interest rates and other relevant considerations,
including the risks associated with each investment medium. Although the
Balanced Fund seeks to reduce the risks associated with any one investment
medium by utilizing a variety of investments, performance will depend upon
additional factors such as timing and mix and the ability of AmSouth to judge
and react to changing market conditions.
Each Growth Fund may provide current income. Because the Balanced Fund will
invest in both debt and equity securities, the Balanced Fund is expected to
produce a higher level of current income than the Equity Fund and the Regional
Equity Fund. The current income provided by each of the Growth Funds is likely
to be less than income produced by income funds.
5
<PAGE> 8
THE EQUITY FUND will normally invest at least 80% of the value of its total
assets in common stocks and securities convertible into common stocks, such as
convertible bonds and convertible preferred stocks, believed by AmSouth to be
undervalued. Under normal market conditions, the Equity Fund may also invest up
to 20% of the value of its total assets in preferred stocks, corporate bonds,
notes, and warrants, obligations with maturities of 12 months or less such as
commercial paper (including variable amount master demand notes), bankers'
acceptances, certificates of deposit, repurchase agreements, money market mutual
funds, obligations issued or guaranteed by the U.S. Government or its agencies
or instrumentalities, and demand and time deposits of domestic and foreign banks
and savings and loan associations. The Equity Fund will not invest more than 15%
of its net assets in time deposits with maturities in excess of seven days which
are subject to penalties upon early withdrawal. If deemed appropriate for
temporary defensive purposes, the Equity Fund may increase its holdings in
short-term obligations to over 20% of its total assets and may also hold
uninvested cash pending investment. The Fund may also write covered call
options. See "Options".
THE REGIONAL EQUITY FUND will normally invest at least 65% of the value of its
total assets in common stocks and securities convertible into common stocks
believed by AmSouth to be undervalued of companies headquartered in the Southern
Region as defined above. Under normal market conditions, the Regional Equity
Fund may also invest up to 35% of the value of its total assets in common stocks
and securities convertible into common stock of companies headquartered outside
the Southern Region, preferred stocks, corporate bonds, notes, and warrants,
obligations with maturities of 12 months or less such as commercial paper
(including variable amount master demand notes), bankers' acceptances,
certificates of deposit, repurchase agreements, money market mutual funds,
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, and demand and time deposits of domestic and foreign banks
and savings and loan associations. The Regional Equity Fund will not invest more
than 15% of its net assets in time deposits with maturities in excess of seven
days which are subject to penalties upon early withdrawal. If deemed appropriate
for temporary defensive purposes, the Regional Equity Fund may increase its
holdings in short-term obligations to over 35% of its total assets and may also
hold uninvested cash pending investment. The Regional Equity Fund may also write
covered call options. See "Options".
The Regional Equity Fund will normally invest at least 65% of the value of its
total assets in common stock and securities convertible into common stock of
companies headquartered in the Southern Region. There can be no assurance that
the economy of the Southern Region or the companies headquartered in the
Southern Region will grow in the future or that a company headquartered in the
Southern Region whose assets, revenues or employees are located substantially
outside of the Southern Region will share in any economic growth of the Southern
Region. Additionally, any localized negative economic factors or possible
physical disasters in the Southern Region area could have a much greater impact
on the Regional Equity Fund's assets than on similar funds whose investments are
geographically more diverse.
THE BALANCED FUND will normally invest in equity securities consisting of
common stocks but may also invest in other equity-type securities such as
warrants, preferred stocks and convertible debt instruments. The Fund's equity
investments will be in companies with a favorable outlook and believed by
AmSouth to be undervalued. The Balanced Fund's debt securities will consist of
securities such as bonds, notes, debentures and money market instruments. The
average dollar-weighted portfolio maturity of debt securities held by the
Balanced Fund will vary according to market conditions and interest rate cycles
and will range between 1 year and 30 years under normal market conditions. The
Balanced Fund's debt securities will consist of high grade securities, which are
those securities rated in one of the three highest rating categories by a
nationally recognized statistical rating organization (an "NRSRO") at the time
of purchase, or if not
6
<PAGE> 9
rated, found the by the investment advisor under guidelines established by the
Trust's Board of Trustees to be of comparable quality. (For a further
description of these bond ratings, see the Appendix to the Trust's Statement of
Additional Information.) In the event that the rating of any debt securities
held by the Balanced Fund falls below the third highest by an NRSRO the Fund
will not be obligated to dispose of such obligations and may continue to hold
such obligations if, in the opinion of AmSouth, such investment is considered
appropriate under the circumstances.
It is a fundamental policy of the Balanced Fund that it will invest at least
25% of its total assets in fixed-income securities. For this purpose,
fixed-income securities include debt securities, preferred stock and that
portion of the value of securities convertible into common stock, including
convertible preferred stock and convertible debt, which is attributable to the
fixed-income characteristics of those securities.
FOREIGN INVESTMENTS
Each of the Growth Funds may invest in foreign securities through the purchase
of American Depository Receipts or the purchase of securities on the Toronto
Stock Exchange, but will not do so if immediately after a purchase and as a
result of the purchase the total value of such foreign securities owned by such
Fund would exceed 25% (20% for the Balanced Fund) of the value of the total
assets of such Fund. Each of the Growth Funds may also invest in securities
issued by foreign branches of U.S. banks and foreign banks and in Canadian
Commercial Paper and Europaper. Investment in foreign securities is subject to
special risks, such as future adverse political and economic developments,
possible seizure, currency blockage, nationalization, or expropriation of
foreign investments, less stringent disclosure requirements, the possible
establishment of exchange controls or taxation at the source and the adoption of
other foreign governmental restrictions. Additional risks include currency
exchange risks, less publicly available information, the risk that companies may
not be subject to the accounting, auditing and financial reporting standards and
requirements of U.S. companies, the risk that foreign securities markets may
have less volume and therefore less liquidity and greater price volatility than
U.S. securities, and the risk that custodian and brokerage costs may be higher.
WHEN-ISSUED SECURITIES
Each of the Growth Funds may also purchase securities on a "when-issued"
basis. When-issued securities are securities purchased for delivery beyond the
normal settlement date at a stated price and yield, and thereby involve a risk
that the yield obtained in the transaction will be less than those available in
the market when delivery takes place. The Growth Funds will generally not pay
for such securities or start earning interest on them until they are received.
When a Growth Fund agrees to purchase securities on a "when-issued" basis, the
Trust's custodian will set aside cash or liquid Fund securities equal to the
amount of the commitment in a segregated account. Securities purchased on a
"when-issued" basis are recorded as an asset and are subject to changes in value
based upon changes in the general level of interest rates. Each of the Growth
Funds expects that commitments to purchase "when-issued" securities will not
exceed 25% of the value of its total assets under normal market conditions, and
that a commitment to purchase "when-issued" securities will not exceed 60 days.
In the event its commitment to purchase "when-issued" securities ever exceeded
25% of the value of its assets, a Growth Fund's liquidity and the investment
advisor's ability to manage it might be adversely affected. The Growth Funds do
not intend to purchase "when-issued" securities for speculative purposes, but
only for the purpose of acquiring portfolio securities.
OPTIONS
Each of the Growth Funds may engage in writing call options from time to time
as AmSouth deems to be appropriate. Options are written solely as covered call
options (options on securities owned by the Fund). Such options must be listed
on a national securities exchange and issued by the Options
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<PAGE> 10
Clearing Corporation. In order to close out an option position, a Growth Fund
will enter into a "closing purchase transaction" -- the purchase of a call
option on the same security with the same exercise price and expiration date as
any call option which it may previously have written on any particular
securities. When the portfolio security is sold, the Growth Fund effects a
closing purchase transaction so as to close out any existing call option on that
security. If the Growth Fund is unable to effect a closing purchase transaction,
it will not be able to sell the underlying security until the option expires or
the Growth Fund delivers the underlying security upon exercise. When writing a
covered call option, a Growth Fund, in return for the premium, gives up the
opportunity for profit from a price increase in the underlying security above
the exercise price, but retains the risk of loss should the price of the
security decline.
The Balanced Fund may purchase put options from time to time as AmSouth deems
to be appropriate. A put is a right to sell a specified security (or securities)
within a specified period of time at a specified exercise price. Puts may be
acquired by the Balanced Fund to facilitate the liquidity of the portfolio
assets. Puts may also be used to facilitate the reinvestment of assets at a rate
of return more favorable than that of the underlying security. The Balanced Fund
may sell, transfer, or assign a put only in conjunction with the sale, transfer,
or assignment of the underlying security or securities. The amount payable to
the Balanced Fund upon its exercise of a "put" is normally (i) the Balanced
Fund's acquisition cost of the securities subject to the put (excluding any
accrued interest which the Fund paid on the acquisition), less any amortized
market premium or plus any accreted market or original issue discount during the
period the Balanced Fund owned the securities, plus (ii) all interest accrued on
the securities since the last interest payment date during that period. The
Balanced Fund will generally acquire puts only where the puts are available
without the payment of any direct or indirect consideration. However, if
necessary or advisable, the Fund may pay for puts either separately in cash or
by paying a higher price for portfolio securities which are acquired subject to
the puts (thus reducing the yield to maturity otherwise available for the same
securities). The Balanced Fund intends to enter into puts only with dealers,
banks, and broker-dealers which, in the Investment Advisor's opinion, present
minimal credit risks.
REPURCHASE AGREEMENTS
Securities held by the Growth Funds may be subject to repurchase agreements.
If the seller under a repurchase agreement were to default on its repurchase
obligation or become insolvent, the Growth Fund would suffer a loss to the
extent that the proceeds from a sale of the underlying portfolio securities were
less than the repurchase price under the agreement, or to the extent that the
disposition of such securities by the Growth Fund were delayed pending court
action. Additionally, if the seller should be involved in bankruptcy or
insolvency proceedings, the Growth Fund may incur delay and costs in selling the
underlying security or may suffer a loss of principal and interest if the Growth
Fund is treated as an unsecured creditor and required to return the underlying
security to the seller's estate.
REVERSE REPURCHASE AGREEMENTS
Each of the Growth Funds may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. Pursuant to such agreements, a Growth Fund would
sell portfolio securities to financial institutions such as banks and
broker-dealers, and agree to repurchase them at a mutually agreed-upon date and
price. Reverse repurchase agreements involve the risk that the market value of
the securities sold by a Growth Fund may decline below the price at which the
Fund is obligated to repurchase the securities.
OTHER INVESTMENT PRACTICES
Each Growth Fund may invest up to 5% of the value of its total assets in the
securities of any one money market mutual fund (including Shares of the AmSouth
Prime Obligations Fund and the AmSouth U.S. Treasury Fund), provided that no
more
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<PAGE> 11
than 10% of a Growth Fund's total assets may be invested in the securities of
money market mutual funds in the aggregate. In order to avoid the imposition of
additional fees as a result of investments in Shares of other AmSouth Mutual
Funds, the Investment Advisor and the Administrator (see "MANAGEMENT OF AMSOUTH
MUTUAL FUNDS" -- "Investment Advisor" and "Administrator and Distributor") will
not retain the portion of their usual service fees from the Growth Funds that
are attributable to investments by a Growth Fund in Shares of those Funds up to
the rate paid in those Funds. The Investment Advisor and the Administrator will
promptly forward such fees to the Growth Funds. Each Growth Fund will incur
additional expenses due to the duplication of expenses as a result of investing
in securities of other unaffiliated money market mutual funds. Additional
restrictions regarding the Growth Funds' investments in the securities of an
unaffiliated money market fund and/or the AmSouth Prime Obligations Fund and the
AmSouth U.S. Treasury Fund are contained in the Statement of Additional
Information.
In order to generate additional income, each Growth Fund may, from time to
time, lend its portfolio securities to broker-dealers, banks or institutional
borrowers of securities. While the lending of securities may subject a Growth
Fund to certain risks, such as delays or the inability to regain the securities
in the event the borrower were to default on its lending agreement or enter into
bankruptcy, the Growth Fund will receive 100% collateral in the form of cash or
U.S. Government securities. This collateral will be valued daily by AmSouth and
should the market value of the loaned securities increase, the borrower will
furnish additional collateral to the Growth Fund. During the time portfolio
securities are on loan, the borrower pays the Growth Fund any dividends or
interest paid on such securities. Loans are subject to termination by the Growth
Funds or the borrower at any time. While the Growth Funds do not have the right
to vote securities on loan, the Growth Funds intend to terminate the loan and
regain the right to vote if that is considered important with respect to the
investment. The Growth Funds will only enter into loan arrangements with
broker-dealers, banks or other institutions which AmSouth has determined are
creditworthy under guidelines established by the Trust's Board of Trustees.
Each Growth Fund may engage in the technique of short-term trading. Such
trading involves the selling of securities held for a short time, ranging from
several months to less than a day. The object of such short-term trading is to
increase the potential for capital appreciation and/or income of the Growth Fund
in order to take advantage of what AmSouth believes are changes in market,
industry or individual company conditions or outlook. Any such trading would
increase the turnover rate of a Growth Fund and its transaction costs.
The portfolio turnover of each Growth Fund may vary greatly from year to year
as well as within a particular year. High turnover rates will generally result
in higher transaction costs and higher levels of taxable realized gains to the
Fund's shareholders.
INVESTMENT RESTRICTIONS
Each of the Growth Funds is subject to a number of investment restrictions
that may be changed only by a vote of a majority of the outstanding shares of
that Fund (see "GENERAL INFORMATION -- Miscellaneous" in this prospectus).
No Growth Fund may:
1. Purchase securities of any one issuer, other than obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, if,
immediately after such purchase, more than 5% of the value of such Growth Fund's
total assets would be invested in such issuer, or such Growth Fund would hold
more than 10% of any class of securities of the issuer or more than 10% of the
outstanding voting securities of the issuer, except that up to 25% of the value
of each Growth Fund's total assets may be invested without regard to such
limitations.
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<PAGE> 12
There is no limit to the percentage of assets that may be invested in U.S.
Treasury bills, notes, or other obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.
2. Purchase any securities which would cause 25% or more of the value of such
Growth Fund's total assets at the time of purchase to be invested in securities
of one or more issuers conducting their principal business activities in the
same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities and repurchase agreements secured by obligations of the U.S.
Government or its agencies or instrumentalities; (b) wholly-owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of their parents;
and (c) utilities will be divided according to their services. For example, gas,
gas transmission, electric and gas, electric, and telephone will each be
considered a separate industry.
3. Borrow money or issue senior securities, except that each Growth Fund may
borrow from banks or enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of its total assets at the time of
such borrowing; or mortgage, pledge, or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of such Growth Fund's total
assets at the time of its borrowing. A Growth Fund will not purchase securities
while borrowings (including reverse repurchase agreements) in excess of 5% of
its total assets are outstanding.
4. Make loans, except that each Growth Fund may purchase or hold debt
securities and lend portfolio securities in accordance with its investment
objective and policies, and may enter into repurchase agreements.
VALUATION OF SHARES
The net asset value of each Growth Fund is determined and its Shares are
priced as of 4:00 p.m., Eastern Time (the "Valuation Time") on each Business Day
of such Fund. As used herein a "Business Day" constitutes any day on which the
New York Stock Exchange (the "NYSE") is open for trading and the Federal Reserve
Bank of Atlanta is open, except days on which there are not sufficient changes
in the value of the Fund's portfolio securities that the Fund's net asset value
might be materially affected, or days during which no Shares are tendered for
redemption and no orders to purchase Shares are received. Currently, either the
NYSE or the Federal Reserve Bank of Atlanta is closed on the customary national
business holidays of New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veteran's Day, Thanksgiving Day and Christmas Day. Net asset value per Share for
purposes of pricing sales and redemptions is calculated by dividing the value of
all securities and other assets belonging to a Growth Fund, less the liabilities
charged to that Fund, by the number of the outstanding Shares of that Fund. The
net asset value per Share of each Growth Fund will fluctuate as the value of its
investment portfolio changes.
The securities in each Growth Fund will be valued at market value. If market
quotations are not available, the securities will be valued by a method which
the Board of Trustees of the Trust believes accurately reflects fair value. For
further information about valuation of investments in the Growth Funds, see the
Statement of Additional Information.
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<PAGE> 13
HOW TO PURCHASE AND REDEEM SHARES
DISTRIBUTOR
Shares in each of the Growth Funds are sold on a continuous basis by the
Trust's distributor, BISYS Fund Services (the "Distributor"). The principal
office of the Distributor is 3435 Stelzer Road, Columbus, Ohio 43219. If you
wish to purchase Shares, contact the Trust at (800) 451-8382.
PURCHASES OF SHARES
Shares of the Growth Funds may be purchased through procedures established by
the Distributor in connection with requirements of qualified accounts maintained
by or on behalf of certain persons ("Customers") by AmSouth or its correspondent
or affiliated banks (collectively, the "Banks"). These procedures may include
instructions under which a Customer's account is "swept" automatically no less
frequently than weekly and amounts in excess of a minimum amount agreed upon by
a Bank and its Customer are invested by the Distributor in Shares of the Growth
Funds. These procedures may also include transactions whereby AmSouth as agent
purchases Shares of the Growth Funds in amounts that correspond to the market
value of securities sold to the Growth Funds by AmSouth as agent.
Shares of the Trust sold to the Banks acting in a fiduciary, advisory,
custodial, agency, or other similar capacity on behalf of Customers will
normally be held of record by the Banks. With respect to Shares so sold, it is
the responsibility of the particular Bank to transmit purchase or redemption
orders to the Distributor and to deliver federal funds for purchase on a timely
basis. Beneficial ownership of the Shares will be recorded by the Banks and
reflected in the account statements provided by the Banks to Customers.
Investors may also purchase Shares of a Growth Fund by completing and signing
an Account Registration Form and mailing it, together with a check (or other
negotiable bank draft or money order) in at least the minimum initial purchase
amount, payable to the Trust, in care of AmSouth Mutual Funds, Department L
1304, Columbus, Ohio 43260-1304. Subsequent purchases of Shares of a Growth Fund
may be made at any time by mailing a check (or other negotiable bank draft or
money order) payable to the Trust, to the above address.
If an Account Registration Form has been previously received by the
Distributor, investors may also purchase Shares either by telephone or by wiring
funds to the Trust's custodian. Telephone orders may be placed by calling the
Trust at (800) 451-8382. Payment for Shares ordered by telephone may be made by
check and must be received by the Trust's custodian within seven days of the
telephone order. If payment is not received within seven days or a check timely
received does not clear, the purchase will be cancelled and the investor could
be liable for any losses or fees incurred. In the case of purchases of Shares
effected by wiring funds to the Trust's custodian, investors must call the Trust
at (800) 451-8382 to obtain instructions regarding the bank account number into
which the funds should be wired and other pertinent information.
Investors may also purchase Shares by arranging systematic monthly, bi-monthly
or quarterly investments into the Funds with the Trust's Automatic Investment
Plan ("AIP"). The minimum investment amounts are $50 per transfer and the
maximum amount with respect to any transfer is $100,000. After investors give
the Trust proper authorization, their bank accounts, which must be with banks
that are members of the Automated Clearing House, will be debited accordingly to
purchase Shares. Investors will receive a confirmation from the Trust for every
transaction, and a withdrawal will appear on their bank statements.
To participate in AIP, investors must complete the appropriate sections of the
Account Registration form or call for instructions. This form may be obtained by
calling the Trust at (800) 451-8382. The amount investors specify will
automatically be invested in Shares at the specified Fund's public
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<PAGE> 14
offering price per Share next determined after the debit is made.
To change the frequency or amount invested, written instructions must be
received by the Trust at least seven Business Days in advance of the next
transfer. If the bank or bank account number is changed, instructions must be
received by the Trust at least 20 Business Days in advance. In order to change a
bank or bank account number, investors also must have their signature guaranteed
by a bank, broker, dealer, credit union, securities exchange, securities
association, clearing agency or savings association, as those terms are defined
in Rule 17Ad-15 under the Securities Exchange Act of 1934 (an "Eligible
Guarantor Institution"). Signature guarantees are described more fully under
"REDEMPTION BY MAIL" below. If there are insufficient funds in the investor's
designated bank account to cover the Shares purchased using AIP, the investor's
bank may charge the investor a fee or may refuse to honor the transfer
instruction (in which case no Fund Shares will be purchased).
Investors should check with their banks to determine whether they are members
of the Automated Clearing House and whether their banks charge a fee for
transferring funds through the Automated Clearing House. Expenses incurred by
the Funds related to AIP are borne by the Funds and therefore there is no direct
charge by the Funds to investors for use of these services.
Shares of each Growth Fund are purchased at the public offering price per
Share, which is the net asset value per Share (see "VALUATION OF SHARES") next
determined after receipt by the Distributor of an order in good form to purchase
Shares plus the applicable sales charge as described below. Purchases of Shares
of a Growth Fund will be effected only on a Business Day (as defined in
"VALUATION OF SHARES") of such Fund. An order received prior to the Valuation
Time on any Business Day will be executed based on the net asset value
determined as of the Valuation Time on the date of receipt. An order received
after the Valuation Time on any Business Day will be executed based on the net
asset value determined as of the next Business Day.
The minimum investment is $1,000 for the initial purchase of Shares of a
Growth Fund by an investor. There is no minimum investment for subsequent
purchases; however, as described above, the minimum subsequent investment when
using AIP is $50 per transfer. The minimum initial investment amount may be
waived if purchases are made in connection with Individual Retirement Accounts,
Keogh plans or similar plans. For information on IRAs or Keoghs or similar
plans, contact AmSouth at (800) 444-4727.
Depending upon the terms of a particular Customer account, the Banks may
charge a Customer's account fees for automatic investment and other cash
management services provided in connection with investment in the Growth Funds.
Information concerning these services and any charges can be obtained from the
Banks. This Prospectus should be read in conjunction with any such information
received from the Banks.
The Trust reserves the right to reject any order for the purchase of its
Shares in whole or in part, including purchases made with foreign and third
party checks.
Every Shareholder will receive a confirmation of each new transaction in his
or her account, which will also show the total number of Shares of the
particular Fund owned by the Shareholder. Reports of purchases and redemptions
of Shares by Banks on behalf of their Customers will be sent by the Banks to
their Customers. Shareholders may rely on these statements in lieu of
certificates. Certificates representing Shares will not be issued.
SALES CHARGE
The public offering price of a share of a Growth Fund equals its net asset
value plus a sales charge. The Winsbury Company receives this sales charge as
Distributor and may re-allow a portion of it as dealer discounts and brokerage
commissions. However, Winsbury, at its sole discretion, may pay certain dealers
all or part of the portion of the sales
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<PAGE> 15
charges it receives. A broker or dealer who receives a reallowance in excess of
90% of the sales charge may be deemed to be an "underwriter" for purposes of the
Securities Act of 1933.
<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS ALLOWANCE
A PERCENTAGE OF SALES CHARGE AS AS A PERCENTAGE
NET AMOUNT A PERCENTAGE OF OF OFFERING
AMOUNT OF PURCHASE INVESTED OFFERING PRICE PRICE
- ---------------------------------------------- --------------- --------------- ---------------
<S> <C> <C> <C>
Less than $50,000............................. 4.71% 4.50% 4.05%
$50,000 but less than $100,000................ 4.17% 4.00% 3.60%
$100,000 but less than $250,000............... 3.09% 3.00% 2.70%
$250,000 but less than $500,000............... 2.04% 2.00% 1.80%
$500,000 but less than $1,000,000............. 1.01% 1.00% .90%
$1,000,000 or more............................ -0- -0- -0-
</TABLE>
From time to time dealers who receive dealer discounts and broker commissions
from the Distributor may reallow all or a portion of such dealer discounts and
broker commissions to other dealers or brokers. The Distributor, at its expense,
will also provide additional compensation to dealers in connection with sales of
Shares of any of the Funds. Such compensation will include financial assistance
to dealers in connection with conferences, sales or training programs for their
employees, seminars for the public, advertising campaigns regarding one or more
Funds of the Trust, and/or other dealer-sponsored special events. In some
instances, this compensation will be made available only to certain dealers
whose representatives have sold a significant amount of such Shares.
Compensation will include payment for travel expenses, including lodging,
incurred in connection with trips taken by invited registered representatives
and members of their families to location within or outside the United States
for meetings or seminars of a business nature. Compensation will also include
the following types of non-cash compensation offered through sales contests: (1)
vacation trips, including the provision of travel arrangements and lodging at
luxury resorts at an exotic location, (2) tickets for entertainment events (such
as concerts, cruises and sporting events) and (3) merchandise (such as clothing,
trophies, clocks and pens). Dealers may not use sales of a Fund'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 compensation is paid for by
any Fund or its Shareholders.
The sales charges set forth in the table above are applicable to purchases
made at one time by any purchaser (a "Purchaser"), which includes: (i) an
individual, his or her spouse and children under the age of 21; (ii) a trustee
or other fiduciary of a single trust estate or single fiduciary account; or
(iii) any other organized group of persons, whether incorporated or not,
provided that such organization has been in existence for at least six months
and has some purpose other than the purchase of redeemable securities of a
registered investment company. In order to qualify for a lower sales charge, all
orders from a Purchaser will have to be placed through a single investment
dealer and identified at the time of purchase as originating from the same
Purchaser, although such orders may be placed into more than one discrete
account which identifies the Purchasers.
SALES CHARGE WAIVERS
The following classes of investors may purchase Shares of a Growth Fund with
no sales charge in the manner described below (which may be changed or
eliminated at any time by the Distributor):
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<PAGE> 16
(1) Existing Shareholders of a Growth Fund upon the reinvestment of dividend
and capital gain distributions;
(2) Officers, trustees, directors, employees and retired employees of the
Trust, AmSouth Bancorporation and its affiliates, and BISYS Fund Services and
its affiliates (and spouses and children of each of the foregoing);
(3) Investors for whom AmSouth Bancorporation or one of its affiliates acts in
a fiduciary, advisory, (non-retirement account), agency or similar capacity; and
(4) Investors who purchase Shares of a Growth Fund through a 401(k) plan or a
403(b) plan which by its terms permits purchases of Shares.
(5) Employees (and their spouses and children under the age of 21) of any
broker-dealer with which the Distributor enters into a dealer agreement to sell
Shares of the Funds.
(6) Orders placed on behalf of other investment companies distributed by the
Distributor and its affiliated companies.
(7) Investors who purchase Shares of a Growth Fund through certain
broker-dealers, registered investment advisers and other financial institutions
that have entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients participating in
a "wrap account," asset allocation or a similar program under which such clients
pay a fee to such broker-dealer, registered investment advisor or other
financial institution.
From time to time, for special promotional purposes, the Distributor may offer
special concessions to enable investors to purchase shares of a Fund offered by
the Trust at net asset value without payment of a front-end charge. To qualify
for a net asset value purchase, the investor must pay for such purchase with the
proceeds from the redemption of shares of a non-affiliated mutual fund on which
a front-end sales charge was paid. A qualifying purchase of shares must occur
within 30 days of prior redemption and must be evidenced by a confirmation of
the redemption transaction. At the time of purchase, the investment
representative must notify the Distributor that the purchase qualifies for a
purchase at net asset value. Proceeds from the redemption of shares on which no
front-end sales charge was paid do not qualify for a purchase at net asset
value.
The Distributor may also periodically waive the sales charge for all investors
with respect to any Growth Fund.
LETTER OF INTENT
By checking the Letter of Intent box on the account application, a shareholder
becomes eligible for reduced sales charges applicable to the total amount
invested in shares of a Growth Fund over a 13-month period (beginning up to 90
days prior to the date indicated on the account application). The Trust's
Transfer Agent will hold in escrow 5% of the amount indicated for payment of the
higher sales charge if a shareholder does not purchase the full amount indicated
on the account application. Upon completion of the total minimum investment
specified on the account application, the escrow will be released, and an
adjustment will be made to reflect any reduced sales charge applicable to shares
purchased during the 90-day period prior to submission of the account
application. Additionally, if the total purchases within the 13-month period
exceed the amount specified, an adjustment will be made to reflect further
reduced sales charges applicable to such purchases. All such adjustments will be
made at the conclusion of the 13-month period in the form of additional shares
credited to the shareholder's account at the then current Public Offering Price
applicable to a single purchase of the total amount of the total purchases. If
total purchases are less than the amount specified, escrowed shares may be
involuntarily redeemed to pay the additional sales charge. Checking a Letter of
Intent box does not bind an investor to purchase, or the Fund to sell, the full
amount indicated at the sales load in effect at the time of signing, but an
investor must complete the intended purchase to obtain the reduced sales load.
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<PAGE> 17
For further information about Letters of Intent, interested investors should
contact the Trust at (800) 451-8382. This program, however, may be modified or
eliminated at any time or from time to time by the Distributor without notice.
CONCURRENT PURCHASES AND RIGHT OF ACCUMULATION
A Purchaser may qualify for a reduced sales charge by combining concurrent
purchases of Shares of a Growth Fund and one or more of the other Funds of the
Trust sold with a sales charge or by combining a current purchase of Shares of a
Growth Fund with prior purchases of Shares of any Fund of the Trust sold subject
to a sales charge. The applicable sales charge is based on the sum of (i) the
Purchaser's current purchase of shares of any Fund sold with a sales charge plus
(ii) the then current net asset value of all Shares held by the Purchaser in any
Fund sold with a sales charge. To receive the applicable public offering price
pursuant to the right of accumulation Shareholders must at the time of purchase
provide the Transfer Agent or the Distributor with sufficient information to
permit confirmation of qualification. Accumulation privileges may be amended or
terminated without notice at any time by the Distributor.
EXCHANGE PRIVILEGE
Shareholders may exchange Shares of any Growth Fund on the basis of the
relative net asset value of the Shares exchanged, without payment of a sales
charge, for Shares of any other Fund of the Trust so long as they maintain the
respective minimum account balance in each Fund in which they own Shares.
Shareholders may exchange Shares of a Fund without a sales charge for Shares of
a Fund with a sales charge, by paying the applicable sales charge, so long as
they maintain the respective minimum account balances in each Fund in which they
own Shares. Shares of a Fund without a sales charge that were acquired through
an exchange of Shares of a Fund with respect to which a sales charge was paid
may be exchanged for Shares of a Fund with a sales charge without payment of a
sales charge provided that such an exchange may only be made once during each
calendar year and only upon the written request of a Shareholder. Shareholders
must at the time of purchase provide the Transfer Agent or the Distributor with
sufficient information to permit confirmation of qualification.
An exchange is considered to be a sale of Shares for federal income tax
purposes on which a Shareholder may realize a capital gain or loss. In general,
if a Shareholder exchanges Growth Fund Shares for Shares of another Fund without
paying a sales charge, the gain or loss on the sale of the Growth Fund Shares
will be calculated without taking into account the sales charge paid on the
Growth Fund Shares if the Shares were not held for at least 91 days. The sales
charge will instead be added to the basis of the Fund Shares acquired in the
exchange. The application of this rule will increase the gain or reduce the loss
that the Shareholder would otherwise recognize on the exchange of the Shares of
the Growth Fund.
Before an exchange can be effected, a Shareholder must receive a current
prospectus of the Fund into which the Shares are exchanged. An exchange may be
made by calling the Trust at (800) 451-8382 or by mailing written instructions
to the Transfer Agent. Exchange privileges may be exercised only in those states
where Shares of such other Funds of the Trust may legally be sold, and may be
amended or terminated at any time upon sixty (60) days' notice.
The Trust's exchange privilege is not intended to afford shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Trust and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity. Exchange activity
will not be deemed excessive if limited to four substantive exchange redemptions
from a Fund during any calendar year.
DIRECTED DIVIDEND OPTION
Shareholders can elect to have dividend distributions (capital gains,
dividends, dividends and capital gains) paid by check or reinvested within the
Fund or reinvested in other AmSouth Mutual Funds of
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<PAGE> 18
the same shareholder registration without a sales charge. To participate in the
Directed Dividend Option, a shareholder must maintain a minimum balance of
$1,000 in each Fund into which he or she plans to reinvest dividends.
The Directed Dividend Option may be modified or terminated without notice. In
addition, the Trust may suspend a shareholder's Directed Dividend Option without
notice if the account balance is less than the minimum $1,000. Participation in
the Option may be terminated or changed by the shareholder at anytime by writing
the Distributor. The Directed Dividend Option is not available to participants
in an AmSouth Mutual Funds IRA.
REDEMPTION OF SHARES
Shares may ordinarily be redeemed by mail or by telephone. However, all or
part of a Customer's Shares may be redeemed in accordance with instructions and
limitations pertaining to his or her account at a Bank.
REDEMPTION BY MAIL
A written request for redemption must be received by the Transfer Agent in
order to constitute a valid tender for redemption. The Transfer Agent will
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations as those terms are defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. The Transfer Agent reserves the right
to reject any signature guarantee if (1) it has reason to believe that the
signature is not genuine, (2) it has reason to believe that the transaction
would otherwise be improper, or (3) the guarantor institution is a broker or
dealer that is neither a member of a clearing corporation nor maintains net
capital of at least $100,000. The signature guarantee requirement will be waived
if the following conditions apply: (1) the redemption check is payable to the
Shareholder(s) of record; and (2) the redemption check is mailed to the
Shareholder(s) at the address of record or the proceeds are either mailed or
wired to a financial institution account previously designated. There is no
charge for having redemption requests mailed to a designated bank account.
REDEMPTION BY TELEPHONE
A Shareholder may have the payment of redemption requests wired or mailed
directly to a domestic commercial bank account previously designated by the
Shareholder on the Account Registration Form. Under most circumstances, such
payments will be transmitted on the next Business Day following receipt of a
valid request for redemption. Such wire redemption requests may be made by the
Shareholder by telephone to the Transfer Agent. The Transfer Agent may reduce
the amount of a wire redemption payment from the maximum wire redemption charge
of $15.00. Such charge is presently $7.00 for each wire redemption. There is no
charge for having payment of redemption requests mailed or sent via Automated
Clearing House to a designated bank account. For telephone redemptions, call the
Trust at (800) 451-8382. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine; if these procedures are
not followed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions. These procedures include recording all phone
conversations, sending confirmations to Shareholders within 72 hours of the
telephone transaction, verifying the account name and a shareholder's account
number or tax identification number and sending redemption proceeds only to the
address of record or to a previously authorized account.
PAYMENTS TO SHAREHOLDERS
Redemption orders are effected at the net asset value per Share next
determined after the Shares are properly tendered for redemption, as described
above. The proceeds paid upon redemption of Shares in a Growth Fund may be more
or less than the amount invested. Payment to Shareholders for Shares redeemed
will be made within seven days after receipt by the Transfer Agent of the
request for redemption. However, to the greatest extent
16
<PAGE> 19
possible, the Trust will attempt to honor requests from Shareholders for next
Business Day payments upon redemption of Shares if the request for redemption is
received by the Transfer Agent before 4:00 p.m., Eastern Time, on a Business Day
or, if the request for redemption is received after 4:00 p.m., Eastern Time, to
honor requests for payment within two Business Days, unless it would be
disadvantageous to the Trust or the Shareholders of the particular Growth Fund
to sell or liquidate portfolio securities in an amount sufficient to satisfy
requests for payments in that manner.
At various times, the Trust may be requested to redeem Shares for which it has
not yet received good payment. In such circumstances, the Trust may delay the
forwarding of proceeds only until payment has been collected for the purchase of
such Shares which may take up to 15 days or more. To avoid delay in payment upon
redemption shortly after purchasing Shares, investors should purchase Shares by
certified or bank check or by wire transfer. The Trust intends to pay cash for
all Shares redeemed, but under abnormal conditions which make payment in cash
unwise, the Trust may make payment wholly or partly in portfolio securities at
their then market value equal to the redemption price. In such cases, an
investor may incur brokerage costs in converting such securities to cash.
Due to the relatively high cost of handling small investments, the Trust
reserves the right to redeem, at net asset value, the Shares of any Shareholder
if, because of redemptions of Shares by or on behalf of the Shareholder, the
account of such Shareholder in any Growth Fund has a value of less than $250.
Accordingly, an investor purchasing Shares of a Growth Fund in only the minimum
investment amount may be subject to such involuntary redemption if he or she
thereafter redeems some of his or her Shares. Before the Trust exercises its
right to redeem such Shares and to send the proceeds to the Shareholder, the
Shareholder will be given notice that the value of the Shares of a Growth Fund
in his or her account is less than the minimum amount and will be allowed 60
days to make an additional investment in an amount which will increase the value
of the account to at least $250.
See "ADDITIONAL PURCHASE AND REDEMPTION INFORMATION" in the Statement of
Additional Information for examples of when the Trust may suspend the right of
redemption or redeem Shares involuntarily if it appears appropriate to do so in
light of the Trust's responsibilities under the Investment Company Act of 1940.
DIVIDENDS AND TAXES
The net income of each of the Growth Funds will be declared monthly as a
dividend to Shareholders at the close of business on the day of declaration.
Dividends will generally be paid monthly. Distributable net realized capital
gains are distributed annually to Shareholders of record. A Shareholder will
automatically receive all income dividends and capital gains distributions in
additional full and fractional Shares unless the Shareholder elects to receive
such dividends or distributions in cash. Dividends and distributions are
reinvested without a sales charge as of the ex-dividend date using the net asset
value determined on that date and are credited to a Shareholder's account on the
payment date. Reinvested dividends and distributions receive the same tax
treatment as dividends and distributions paid in cash. Dividends are generally
taxable when received. However, dividends declared in October, November, or
December to Shareholders of record during those months and paid during the
following January are treated for tax purposes as if they were received by each
Shareholder on December 31 of the prior year. Elections to receive dividends or
distributions in cash, or any revocation thereof, must be made in writing to the
Transfer Agent at 3435 Stelzer Road, Columbus, Ohio 43219, and will become
effective with respect to dividends and distributions having record dates after
its receipt by the Transfer Agent.
17
<PAGE> 20
Each of the Growth Funds is treated as a separate entity for Federal income
tax purposes. Each of the Growth Funds intends to qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If they so qualify, the Growth Funds will not have to pay federal
income taxes on net income and net capital gain income that they distribute to
shareholders. Regulated investment companies are also subject to a federal
excise tax if they do not distribute their income on a timely basis. The Growth
Funds intend to avoid paying federal income and excise taxes by timely
distributing substantially all their net income and net capital gain income.
A distribution to a Shareholder of net investment income (generally the Fund's
ordinary income) and the excess, if any, of short-term capital gain over net
long-term loss will be taxable to the Shareholder as ordinary income. The 70%
dividends-received deduction for corporations generally will apply to the Fund's
distributions to corporations to the extent such distributions represent amounts
that would qualify for the dividends-received deduction if the Fund were a
regular corporation and are designated by the Fund as qualifying for the
dividends-received deduction.
A distribution by a Growth Fund of the excess of net long-term capital gain
over net short-term capital loss designated by such Fund as a capital gain
dividend is taxable to Shareholders as long-term capital gain, regardless of how
long the Shareholder has held Shares in such Fund. Such distributions are not
eligible for the dividends-received deduction.
Prior to purchasing Shares of a Growth Fund, the impact of dividends or
capital gains distributions which are expected to be declared or have been
declared, but not paid, should be carefully considered. Dividends or capital
gains distributions paid after a purchase of Shares are subject to federal
income taxes, although in some circumstances the dividend or distribution may
be, as an economic matter, a return of capital. A Shareholder should consult his
or her own adviser for any special advice.
Dividends received by a Shareholder that are derived from a Growth Fund's
investments in U.S. government obligations may not be entitled to the exemptions
from state and local income taxes that would be available if the Shareholder had
purchased U.S. government obligations directly.
A Shareholder will generally recognize capital gain or loss on the sale or
exchange of shares in a Growth Fund. If a Shareholder receives a capital gain
dividend with respect to a Share of a Growth Fund and such Share is held for six
months or less, any loss on the sale or exchange of such Share shall be treated
as a long-term capital loss to the extent of the capital gain dividend.
The foregoing discussion is limited to federal income tax consequences and is
based on tax laws and regulations which are in effect as of the date of this
Prospectus; such laws and regulations may be changed by legislative or
administrative actions. The foregoing is also intended only as a brief summary
of some of the important tax considerations generally affecting the Growth Funds
and their Shareholders. Potential investors in the Growth Funds are urged to
consult their tax advisers concerning their own tax situation and concerning the
application of state and local taxes which may differ from the federal income
tax consequences described above.
Shareholders will be advised at least annually as to the character for federal
income tax purposes of distributions made during the year.
MANAGEMENT OF AMSOUTH MUTUAL FUNDS
TRUSTEES OF THE TRUST
Overall responsibility for management of the Trust rests with the Board of
Trustees of the Trust, who are elected by the Shareholders of the Trust. There
are currently six Trustees, two of whom are "interested persons" of the Trust
within the meaning of that term under the Investment Company
18
<PAGE> 21
Act of 1940. The Trustees, in turn, elect the officers of the Trust to supervise
actively its day-to-day operations. The Trustees of the Trust, their current
addresses, and principal occupations during the past five years are as follows
(if no address is listed, the address is 3435 Stelzer Road, Columbus, Ohio
43219):
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE TRUST DURING THE PAST 5 YEARS
- ------------------------------ --------------------- --------------------------------------
<S> <C> <C>
Dr. Dick D. Briggs, Jr. Trustee From 1981 to present, Professor and
459 DER Building Vice Chairman, Dept. of Medicine,
1808 7th Avenue South Univ. of Alabama at Birmingham School
UAB Medical Center of Medicine; from 1988 to 1992,
Birmingham, Alabama 35294 President, CEO and Medical Director,
Univ. of Alabama Health Services
Foundation
Wendell D. Cleaver Trustee From September 3, 1993 to present,
209 Lakewood Drive, West retired; from December, 1988 to
Mobile, Alabama 36608 August, 1993, Executive Vice
President, Chief Operating Officer and
Director, Mobile Gas Service
Corporation
J. David Huber* Trustee and From June 1987 to present, employee of
President BISYS Fund Services, Limited
Partnership
William J. Tomko* Chairman of the From April 1987 to present, employee
Board of Trustees of BISYS Fund Services, Limited
Partnership
Homer H. Turner, Jr. Trustee From June 1991 to present, retired;
729 Cary Drive until June 1991, Vice President,
Auburn, Alabama 36830 Birmingham Division, Alabama Power
Company
James H. Woodward, Jr. Trustee From July 1989 to present, Chancellor,
The University of North The University of North Carolina at
Carolina at Charlotte Charlotte; until July 1989, Senior
Charlotte, North Carolina Vice President, University College,
28223 University of Alabama at Birmingham
</TABLE>
- ------------
* Indicates an "interested person" of the Trust as defined in the Investment
Company Act of 1940.
The Trustees receive fees and are reimbursed for expenses in connection with
each meeting of the Board of Trustees they attend. However, no officer or
employee of BISYS Fund Services, or BISYS Fund Services Ohio, Inc. receives any
compensation from the Trust for acting as a Trustee. The officers of the Trust
(see the Statement of Additional Information) receive no compensation directly
from the Trust for performing the duties of their offices. BISYS Fund Services
receives fees from the Trust for acting as Administrator and BISYS Fund Services
Ohio, Inc. receives fees from the Trust for acting as Transfer Agent for and for
providing fund accounting services to the Trust. Mr. Huber and Mr. Tomko are
employees of BISYS Fund Services. Mr. Huber also serves as an executive officer
of BISYS Fund Services.
INVESTMENT ADVISOR
AmSouth has served as the investment advisor of each Fund of the Trust since
the Trust's inception in August 1988. AmSouth was the first bank in its markets
and among the first in the Southeast to serve as an investment advisor for a
family of registered mutual funds. AmSouth is the principal bank affiliate of
AmSouth Bancorporation, the larg-
19
<PAGE> 22
est banking institution headquartered in the mid-south region consisting of
Alabama, Florida, Georgia and Tennessee. AmSouth Bancorporation reported assets
as of December 31, 1994 of $16.7 billion and operates more than 317 banking
offices in Alabama, Florida, Georgia and Tennessee and 52 mortgage banking
offices in nine states. AmSouth has provided investment management services
through its Trust Investment Department since 1915. As of March 31, 1995 that
department had over $6.3 billion in assets under discretionary management and
provided custody services for an additional $678 million in securities, making
AmSouth the largest provider of trust services in Alabama. AmSouth served as
administrator for over $12 billion in bond issues, and its trust division's
Natural Resources Department is ranked as one of the largest natural resource
managers in the United States. As Investment Advisor to the Trust, AmSouth
provides investors in the Trust with the same professional experienced money
management expertise that AmSouth has provided its trust customers.
Subject to the general supervision of the Trust's Board of Trustees and in
accordance with the respective investment objectives and restrictions of the
Growth Funds, AmSouth manages the Growth Funds, makes decisions with respect to
and places orders for all purchases and sales of their investment securities,
and maintains their records relating to such purchases and sales. Pedro Verdu,
CFA, is the portfolio manager for the Equity Fund, the Regional Equity Fund and
the Balanced Fund and, as such, has had primary responsibility for the
day-to-day portfolio management of each Fund since its inception. Mr. Verdu has
had twenty-four years of experience as an analyst and portfolio manager; he is
currently the Director of Equity Investing at AmSouth.
Under an investment advisory agreement between the Trust and AmSouth, the fee
payable to AmSouth by each Growth Fund for investment advisory services is the
lesser of (a) a fee computed daily and paid monthly at the annual rate of up to
eighty one-hundredths of one percent (.80%) of such Growth Fund's average daily
net assets or (b) such fee as may from time to time be agreed upon in writing by
the Group and AmSouth. While this fee is higher than the advisory fee paid by
most mutual funds, it is believed to be comparable to advisory fees paid by many
funds having similar objectives and policies. A fee agreed to in writing from
time to time by the Group and AmSouth may be significantly lower than the fee
calculated at the annual rate and the effect of such lower fee would be to lower
a Growth Fund's expenses and increase the net income of the Fund during the
period when such lower fee is in effect.
During the Trust's fiscal year ended July 31, 1995 AmSouth received investment
advisory fees amounting to .80% of the Equity Fund's average net assets, .80% of
the Regional Equity Fund's average net assets and .70% of the Balanced Fund's
average net assets.
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services is the administrator for each Fund of the Trust, and also
acts as the Trust's principal underwriter and distributor (the "Administrator"
or the "Distributor," as the context indicates). BISYS Fund Services is a
subsidiary of The BISYS Group, Inc., 150 Clove Road, Little Falls, New Jersey
07424, a publicly owned company engaged in information processing, loan
servicing and 401(k) administration and recordkeeping services to and through
banking and other financial organizations.
The Administrator generally assists in all aspects of the Growth Funds'
administration and operation. Under a management and administration agreement
between the Trust and the Administrator, the fee payable by each Growth Fund to
the Administrator for administration services is the lesser of (a) a fee
computed at the annual rate of up to twenty one-hundredths of one percent (.20%)
of such Growth Fund's average daily net assets or (b) such fee as may from time
to time be agreed upon in writing by the Trust and the Administrator. A fee
agreed to in writing from time to time by the Trust and the Administrator may be
significantly lower than the fee calculated at the annual rate and the effect of
20
<PAGE> 23
such lower fee would be to lower a Growth Fund's expenses and increase the net
income of the Fund during the period when such lower fee is in effect.
During the Trust's fiscal year ended July 31, 1995, BISYS Fund Services
received administration fees amounting to .12% of the Equity Fund's average net
assets, .12% of the Regional Equity Fund's average net assets and .12% of the
Balanced Fund's average net assets.
SUB-ADMINISTRATOR
Effective August 1, 1995, AmSouth became the Sub-Administrator to the Trust
pursuant to an agreement between the Administrator and AmSouth Pursuant to this
agreement, AmSouth has assumed certain of the Administrator's duties, for which
AmSouth receives a fee, paid by the Administrator, calculated at an annual rate
of up to ten one-hundredths of one percent (.10%) of each Fund's average net
assets.
EXPENSES
AmSouth and the Administrator each bear all expenses in connection with the
performance of their services as Investment Advisor and Administrator,
respectively, other than the cost of securities (including brokerage
commissions, if any) purchased for a Growth Fund. No Growth Fund will bear,
directly or indirectly, the cost of any activity primarily intended to result in
the distribution of Shares of such Growth Fund; such costs will be borne by the
Distributor.
BANKING LAWS
AmSouth believes that it possesses the legal authority to perform the
investment advisory services for the Growth Funds contemplated by its investment
advisory agreement with the Trust and described in this Prospectus without
violation of applicable banking laws and regulations, and has so represented in
its investment advisory agreement with the Trust. Future changes in federal or
state statutes and regulations relating to permissible activities of banks or
bank holding companies and their subsidiaries and affiliates as well as further
judicial or administrative decisions or interpretations of present and future
statutes and regulations could change the manner in which AmSouth could continue
to perform such services for the Trust. See "MANAGEMENT OF The
Trust -- Glass-Steagall Act" in the Statement of Additional Information for
further discussion of applicable banking laws and regulations.
GENERAL INFORMATION
DESCRIPTION OF THE TRUST AND ITS SHARES
The Trust was organized as a Massachusetts business trust on October 1, 1987.
The Trust has an unlimited number of authorized shares of beneficial interest
which may, without shareholder approval, be divided into an unlimited number of
series of such shares, and which are presently divided into twelve series of
shares, one for each of the following Funds: the AmSouth Prime Obligations Fund,
the AmSouth U.S. Treasury Fund, the AmSouth Tax Exempt Fund, the AmSouth Equity
Fund, the AmSouth Regional Equity Fund, the AmSouth Balanced Fund, the AmSouth
Bond Fund, the AmSouth Limited Maturity Fund, the AmSouth Government Income
Fund, the AmSouth Alabama Tax-Free Fund, the AmSouth Municipal Bond Fund and the
AmSouth Florida Tax-Free Fund. Each Share represents an equal proportionate
interest in a Fund with other Shares of the same series, and is entitled to such
dividends and distributions out of the income earned on the assets belonging to
that Fund as are declared at the discretion of the Trustees (see "Miscellaneous"
below).
Shareholders are entitled to one vote per share (with proportional voting for
fractional shares) on such matters as Shareholders are entitled to vote.
Shareholders vote as a single class except (i) when required by the Investment
Company Act of 1940, shares shall be voted by individual series and (ii) when
the Trustees have determined that the
21
<PAGE> 24
matter affects only the interests of one or more series, then only Shareholders
of such series shall be entitled to vote thereon.
Overall responsibility for the management of the Trust is vested in the Board
of Trustees. See "MANAGEMENT OF AmSouth Mutual Funds -- Trustees of the Trust."
Individual Trustees are elected by the Shareholders and may be removed by the
Board of Trustees or Shareholders at a meeting held for such purpose in
accordance with the provisions of the Declaration of Trust and the By-laws of
the Trust and Massachusetts law. See "ADDITIONAL INFORMATION -- Miscellaneous"
in the Statement of Additional Information for further information.
As of October 5, 1995, AmSouth was the beneficial owner of approximately 80.5%
of the outstanding shares of the Equity Fund, 51.6% of the outstanding shares of
the Regional Equity Fund and 83.4% of the outstanding shares of the Balanced
Fund, and may be deemed to be a "controlling person" of each of the Equity Fund,
the Regional Equity Fund and the Balanced Fund within the meaning of the
Investment Company Act of 1940.
CUSTODIAN
Bank of California, N.A. serves as custodian for the Trust.
TRANSFER AGENT AND FUND ACCOUNTING SERVICES
BISYS Fund Services Ohio, Inc. serves as transfer agent for and provides fund
accounting services to the Trust.
PERFORMANCE INFORMATION
From time to time performance information for a Growth Fund showing its total
return and/or yield may be presented in advertisements and sales literature.
Average annual total return will be calculated for the past year and the period
since the establishment of the Growth Fund. Total return is measured by
comparing the value of an investment in the Growth Fund at the beginning of the
relevant period to the redemption value of the investment at the end of the
period (assuming the investor paid the maximum sales load on the investment and
assuming immediate reinvestment of any dividends or capital gains
distributions). Aggregate total return is calculated similarly to average total
return except that the return figure is aggregated over the relevant period
instead of annualized. Yield will be computed by dividing the Growth Fund's net
investment income per share earned during a recent one-month period by the
Growth Fund's per share maximum offering price (reduced by any undeclared earned
income expected to be paid shortly as a dividend) on the last day of the period
and annualizing the result.
Investors may also judge the performance of each Growth Fund by comparing its
performance to the performance of other mutual funds with comparable investment
objectives and policies through various mutual fund or market indices and data
such as that provided by Lipper Analytical Services, Inc. Comparisons may also
be made to indices or data published in Money Magazine, Forbes, Barron's, The
Wall Street Journal, The New York Times, Business Week, American Banker,
Fortune, Institutional Investor, Ibbotson Associates, Inc., Morning Star, Inc.,
CDA/Wiesenberger, Pensions and Investments, U.S.A. Today, and local newspapers
and periodicals. In addition to performance information, general information
about these Funds that appears in a publication such as those mentioned above
may be included in advertisements, sales literature and in reports to
Shareholders. Additional performance information is contained in the Trust's
Annual Report, which is available free of charge by calling the number on the
front page of the prospectus.
Information about the performance of a Growth Fund is based on the Growth
Fund's record up to a certain date and is not intended to indicate future
performance. Yield and total return are functions of the type and quality of
instruments held in a Growth Fund, operating expenses, and marketing conditions.
Any fees charged by a Bank with respect to customer accounts investing in Shares
of a Growth Fund will not be included in performance calculations.
22
<PAGE> 25
MISCELLANEOUS
Shareholders will receive unaudited semi-annual reports and annual reports
audited by independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to a Fund" means the consideration received by the Trust upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof, including any
proceeds from the sale, exchange, or liquidation of such investments, and any
funds or payments derived from any reinvestment of such proceeds, and any
general assets of the Trust not readily identified as belonging to a particular
Fund that are allocated to that Fund by the Trust's Board of Trustees. The Board
of Trustees may allocate such general assets in any manner it deems fair and
equitable. It is anticipated that the factor that will be used by the Board of
Trustees in making allocations of general assets to particular Funds will be the
relative net assets of the respective Funds at the time of allocation. Assets
belonging to a particular Fund are charged with the direct liabilities and
expenses in respect of that Fund, and with a share of the general liabilities
and expenses of the Trust not readily identified as belonging to a particular
Fund that are allocated to that Fund in proportion to the relative net assets of
the respective Funds at the time of allocation. The timing of allocations of
general assets and general liabilities and expenses of the Trust to particular
Funds will be determined by the Board of Trustees of the Trust and will be in
accordance with generally accepted accounting principles. Determinations by the
Board of Trustees of the Trust as to the timing of the allocation of general
liabilities and expenses and as to the timing and allocable portion of any
general assets with respect to a particular Fund are conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Trust or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the votes of Shareholders of the Trust or such Fund
present at such meeting at which the holders of more than 50% of the votes
attributable to the Shareholders of record of the Trust or such Fund are
represented in person or by proxy, or (b) the holders of more than 50% of the
outstanding votes of Shareholders of the Trust or such Fund.
Under Massachusetts law, Shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Declaration of Trust disclaims Shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in every
agreement, obligation or instrument entered into or executed by the Trust or the
Trustees. The Declaration of Trust provides for indemnification out of a Fund's
property for all loss and expense of any Shareholder of such Fund held liable on
account of being or having been a Shareholder. Thus, the risk of a Shareholder
incurring financial loss on account of Shareholder liability is limited to
circumstances in which a Fund would be unable to meet its obligations.
Inquiries regarding the Trust may be directed in writing to the Trust at 3435
Stelzer Road, Columbus, Ohio 43219, or by calling toll free (800) 451-8382.
23
<PAGE> 26
AMSOUTH MUTUAL FUNDS
INVESTMENT ADVISOR
LOGO
AmSouth Bank of Alabama
1901 Sixth Avenue North
Birmingham, AL 35203
DISTRIBUTOR
BISYS Fund Services, Limited Partnership
3435 Stelzer Road
Columbus, OH 43219
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, DC 20005-3333
TRANSFER AGENT
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
AUDITORS
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Trust................................. 2
Fee Table................................. 2
Financial Highlights...................... 3
Investment Objectives and Policies........ 5
Investment Restrictions................... 9
Valuation of Shares....................... 10
How to Purchase and Redeem Shares......... 11
Dividends and Taxes....................... 17
Management of AmSouth Mutual Funds........ 18
General Information....................... 21
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE TRUST
OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
LOGO
GROWTH FUNDS
LOGO
AMSOUTH BANK OF ALABAMA
INVESTMENT ADVISOR
--------------------------------
THIS PRODUCT IS
NOT FDIC INSURED
--------------------------------
BISYS FUND SERVICES, LIMITED PARTNERSHIP
Prospectus dated November 30, 1995
