<PAGE>
As filed with the Securities and Exchange Commission on November 30, 1999
Registration Nos. 33-24848; 811-5669
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __ [_]
Post-Effective Amendment No. 30 [X]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 31 [X]
FIFTH THIRD FUNDS
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road
Columbus, Ohio 43219
(Address of Principal Executive Office) (Zip Code)
(614) 470-8000
(Registrant's Telephone Number, including Area Code)
Jeffrey C. Cusick
Vice President
Fifth Third Funds
3435 Stelzer Road
Columbus, Ohio 43219
(Name and Address of Agent for Service)
with a copy to:
John Hunt, Esquire
Goodwin, Procter & Hoar LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109
================================================================================
It is proposed that this filing will become effective (check appropriate box):
[X] Immediately upon filing pursuant to [_] On pursuant to paragraph (a)
paragraph (b)
[_] 60 days after filing pursuant to [_] On pursuant to
paragraph (a)(1) paragraph (a)(1)
[_] 75 days after filing pursuant to [_] On pursuant to
paragraph (a)(2) paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously-filed post-effective amendment.
<PAGE>
[LOGO OF FIFTH THIRD FUNDS] Fifth Third Funds
[PICTURE]
Fifth Third Funds QUALITY GROWTH FUND
Stock and Bond Mutual Funds
EQUITY INCOME FUND
Investment A Shares
Investment C Shares CARDINAL FUND
Working hard to build your wealth! PINNACLE FUND
BALANCED FUND
MID CAP FUND
INTERNATIONAL EQUITY FUND
BOND FUND FOR INCOME
QUALITY BOND FUND
U.S. GOVERNMENT SECURITIES FUNDS
MUNICIPAL BOND FUND
OHIO TAX FREE BOND FUND
- ---------------
Prospectus
November 30, 1999
The Securities and Exchange commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal
offense.
<PAGE>
Fifth Third Funds Table of Contents
Objectives, Strategies and Risks
- --------------------------------------------------------------------------------
3 Overview
4 Stock Funds
18 Bond Funds
Shareholder Fees and Fund Expenses
- --------------------------------------------------------------------------------
28 Fee Tables
30 Expense Examples
Additional Information About the Funds' Investments
- --------------------------------------------------------------------------------
33
Fund Management
- --------------------------------------------------------------------------------
36 Investment Advisors and Subadvisor
37 Portfolio Managers
38 Fund Administration
Shareholder Information
- --------------------------------------------------------------------------------
39 Purchasing and Selling Fund Shares
39 Purchasing and Adding to Your Shares
41 Selling Your Shares
43 Exchanging Your Shares
44 Distribution Arrangements/Sales Charges
47 Dividends and Capital Gains
47 Taxation
Financial Highlights
- --------------------------------------------------------------------------------
49
Back Cover
- --------------------------------------------------------------------------------
Where to learn more about Fifth Third Funds
2
<PAGE>
Objectives, Strategies and Risks
Overview
This section provides important information about each of the stock and bond
funds (the "Funds"), each a separate series of Fifth Third Funds, including:
. the investment objective
. principal investment strategies
. principal risks, and
. volatility and performance information
All Funds except Fifth Third Pinnacle Fund are managed by Fifth Third Bank.
Fifth Third Pinnacle Fund is managed by Heartland Capital Management, Inc.
("Heartland"). Morgan Stanley Asset Management, Inc. ("MSAM") acts as
investment subadvisor to Fifth Third International Fund.
Like all mutual funds (other than money market funds and stable value funds),
share prices of the Funds may rise and fall in value and you could lose money.
There is no guarantee that any Fund will achieve its objective.
3
<PAGE>
Fifth Third Quality Growth Fund [LOGO OF FIFTH THIRD]
Fundamental Growth of capital. Income is a secondary objective.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks of high quality
Strategies growth companies.
High quality growth companies are companies, in the
opinion of Fifth Third Bank, that offer excellent
prospects for consistent, above-average revenue and
earnings growth. To determine whether a company is of high
quality, the Fund generally looks for a strong record of
earnings growth, as well as its current ratio of debt to
capital and the quality of its management. Most of the
companies in which the Fund invests are U.S. companies
with a market capitalization greater than $100 million.
To achieve its secondary objective of income, the Fund may
rely on dividend income that it receives from common
stocks and interest income it receives from other
investments, including convertible securities. The Fund
reserves the right to invest up to 35% of total assets in
those securities. At the time of investment, those
securities are rated investment grade, that is, in the BBB
major rating category or higher by Standard & Poor's(R) or
in the Baa major rating category or higher by Moody's, or
their unrated equivalents.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value and the
potential for extended periods of lackluster performance.
An investment in Stocks that pay regular dividends tend to be less volatile
the Fund is not than stocks that do not. A regular dividend provides
a deposit of investors some return of their investment, to an extent,
Fifth Third Bank supporting the stock's price, even during periods when the
or any other prices of equity securities generally are falling.
bank and is not However, dividend-paying stocks, especially those that pay
insured or significant dividends, also tend to appreciate less
guaranteed by quickly than stocks of companies in emerging markets,
the FDIC or any which tend to reinvest most profits into research,
other government development, plant and equipment to accommodate expansion.
agency.
Generally, growth oriented stocks may be sensitive to
market movements. The prices of growth stocks tend to
reflect future expectations, and when those expectations
change or are not met, share prices generally fall. Stocks
of smaller companies tend to be volatile and more
sensitive to long-term market declines than stocks of
larger companies, in part because they generally do not
have the financial resources that larger companies have.
Prices of convertible securities, which include bonds and
preferred stocks, may be affected by the prices of the
underlying security, which generally is common stock.
4
<PAGE>
Fifth Third Quality Growth Fund
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 29.69
1990 5.12
1991 34.38
1992 8.03
1993 -1.06
1994 0.07
1995 31.59
1996 23.68
1997 32.70
1998 30.05
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 28.18%
Worst quarter: Q3 1990 -11.19%
Year to Date Return (12/31/98 to 9/30/99) 6.44%
------------------------------------------------
</TABLE>
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
----------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 1/1/83 24.22% 21.84% 18.05% 17.22%
(with 4.50% sales
charge)
-------------------------------------------------------------------
Investment C Shares 4/25/96 29.21% N/A N/A 28.88%
(with applicable
Contingent Deferred
Sales Charge)
-------------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.18%
(Since 4/25/96)
S&P 500(R) Index 28.94%
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
Fifth Third Equity Income Fund [LOGO OF FIFTH THIRD]
Fundamental High level of current income consistent with capital
Objective appreciation.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks of large-
Strategies capitalization companies, many of which are expected to
pay regular dividends, and convertible debt securities
that at the time of investment, have above-average current
yields. Large-capitalization companies have market
capitalizations no smaller than 90% of the market
capitalizations of the companies in the S&P 500 Index.
The Fund's investment approach generally is to purchase
stocks of companies, which demonstrate industry
leadership, sound management and long-term earnings
growth, and which have attractive dividend yields or the
prospects of increasing dividend rates. At the time of
investment, those convertible debt securities in which the
Fund invests are rated investment grade (that is, in the
BBB major rating category or higher by Standard & Poor's
or the Baa major rating category or higher by Moody's, or
their unrated equivalents).
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as government and non-
convertible corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equities and in debt. The risks of
investing in equity securities include the risk of sudden
and unpredictable drops in value or periods of lackluster
performance. The risks of investing in debt securities
include the tendency of bond prices to fall as interest
rates rise.
An investment in Significant investment in large companies also creates
the Fund is not various risks for the Fund. For instance, larger, more
a deposit of established companies tend to operate in mature markets,
Fifth Third Bank which often are very competitive. Larger companies also do
or any other not tend to respond quickly to competitive challenges,
bank and is not especially to challenges caused by technology and consumer
insured or preferences.
guaranteed by
the FDIC or any Stocks that pay regular dividends tend to be less volatile
other government than stocks that do not. A regular dividend provides
agency. investors some return of their investment, to an extent,
supporting the stock's price, even during periods when the
prices of equity securities generally are falling.
However, dividend-paying stocks, especially those that pay
significant dividends, also tend to appreciate less
quickly than stocks of companies in emerging markets,
which tend to reinvest profits into research, development,
plant and equipment to accommodate expansion.
The tendency of bond prices to fall when interest rates
rise becomes more significant as the average maturity of
the Fund's bond portfolio increases. A less significant
risk of bond investing is that an issuer could default on
principal or interest payments. Prices of convertible
securities, which include bonds and preferred stocks, may
be affected by the prices of the underlying security,
which generally is common stock.
6
<PAGE>
Fifth Third Equity Income Fund [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 24.57
1990 -1.21
1991 29.07
1992 4.61
1993 0.26
1994 -0.65
1995 30.73
1996 16.83
1997 38.15
1998 17.82
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1997 15.29%
Worst quarter: Q3 1990 -9.86%
Year to Date Return (12/31/98 to 9/30/99) -8.80%
-------------------------------------------------
</TABLE>
Average
Annual Total
Returns (for
the periods ended
December 31, 1998)
-------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 1/1/83 12.52% 18.74% 14.66% 15.33%
(with 4.50% sales
charge)
-------------------------------------------------------------------
Investment C Shares 1/27/97 17.10% N/A N/A 26.48%
(with applicable
Contingent Deferred
Sales Charge)
-------------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.18%
(Since 1/31/97)
S&P 500(R) Index 28.31%
</TABLE>
- --------------------------------------------------------------------------------
7
<PAGE>
Fifth Third Cardinal Fund [LOGO OF FIFTH THIRD]
Fundamental Long-term growth of capital and income. Current income is
Objective a secondary objective.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks that have the
Strategies potential for long-term growth. Those stocks primarily are
issued by large-capitalization, U.S. companies which the
Fund believes are in a strong financial condition, have a
significant market presence and have healthy growth
prospects. Large-cap companies have, at the time of
investment, market capitalizations no smaller than 90% of
the market capitalizations of the companies in the S&P 500
Index.
With income as a secondary objective, the Fund attaches
some significance to a company's dividend payment history
as well as prospects for future dividend growth.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as government and
corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value or periods of
lackluster performance.
An investment in Generally, growth oriented stocks may be sensitive to
the Fund is not market movements. The prices of growth stocks tend to
a deposit of reflect future expectations, and when those expectations
Fifth Third Bank change or are not met, share prices generally fall.
or any other
bank and is not Significant investment in large companies also creates
insured or various risks for the Fund. For instance, larger, more
guaranteed by established companies tend to operate in mature markets,
the FDIC or any which often are very competitive. Larger companies also do
other government not tend to respond quickly to competitive challenges,
agency. especially to challenges caused by technology or consumer
preferences.
Stocks that pay regular dividends tend to be less volatile
than stocks that do not. A regular dividend provides
investors some return of their investment, to an extent,
supporting a stock's price, even during periods when the
prices of equity securities generally are falling.
However, dividend-paying stocks, especially those that pay
significant dividends, also tend to appreciate less
quickly than stocks of companies in emerging markets,
which tend to reinvest profits into research, development,
plant and equipment to accommodate expansion.
8
<PAGE>
Fifth Third Cardinal Fund [Fifth Third Logo]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock
Exchange.
The returns assume that Fund distributions have been reinvested. The returns
for Investment C shares will differ from the returns for Investment A shares
(which are shown in the bar chart) because of differences in expenses of each
class. The table assumes that shareholders redeem their fund shares at the end
of the period indicated.
Year-by-Year Total Returns as of 12/31 For Investment A Shares/1/
[CHART]
1989 22.12
1990 -6.20
1991 32.37
1992 9.84
1993 5.88
1994 -3.12
1995 27.27
1996 19.89
1997 30.64
1998 24.21
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Past performance does not indicate how the Fund will perform in the future.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 22.73%
Worst quarter: Q3 1990 -15.13%
Year to Date Return (12/31/98 to 9/30/99) 6.23%
</TABLE>
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares/1 5/31/75 18.62% 18.02% 14.98% 15.71%
/ (with 4.50% sales
charge)
--------------------------------------------------------------------
Investment C Shares 10/22/98 N/A N/A N/A 113.45%
(with applicable
Contingent Deferred
Sales Charge)
--------------------------------------------------------------------
S&P 500(R) Index 28.58% 24.06% 19.19% (Since 5/31/75)
N/A
S&P 500(R) Index (Since 10/22/98)
102.19%
</TABLE>
- --------------------------------------------------------------------------------
- ------
/1/For periods prior to September 21, 1998, reflects performance of Investor
Shares of The Cardinal Fund. On September 21, 1998. The Cardinal Fund, a
registered open-end investment company managed by The Ohio Company, was
merged into Fifth Third Cardinal Fund.
9
<PAGE>
Fifth Third Pinnacle Fund [LOGO OF FIFTH THIRD]
Fundamental Long-term capital appreciation.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks and convertible
Strategies securities that have the potential for long-term growth.
In selecting stocks, the Fund looks primarily at companies
that have historically reported better corporate earnings
than the earnings that market analysts have predicted.
Generally, those companies are expected to grow faster
than the economy as a whole. Those companies also tend to
be established companies that appear to be capable of
sustained growth. Although most of those companies are
large, the Fund may invest in stocks of companies of any
size. Current income is not a factor in stock selection.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as government and
corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value or periods of
lackluster performance.
An investment Generally, growth oriented stocks may be sensitive to
in the Fund market movements. The prices of growth stocks tend to
is not a reflect future expectations, and when those expectations
deposit of are not met, prices generally fall.
Fifth Third
Bank or any Significant investment in large companies also creates
other bank various risks for the Fund. For instance, larger, more
and is not established companies tend to operate in mature markets,
insured or which often are very competitive. Larger companies also do
guaranteed by not tend to respond quickly to competitive challenges,
the FDIC or especially to changes caused by technology or consumer
any other preferences.
government
agency.
10
<PAGE>
Fifth Third Pinnacle Fund [Fifth Third Logo]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock
Exchange.
The returns assume that Fund distributions have been reinvested. The returns
for Investment C shares will differ from the returns for Investment A shares
(which are shown in the bar chart) because of differences in expenses of each
class. The table assumes that shareholders redeem their fund shares at the end
of the period indicated.
Year-by-Year Total Returns as of 12/31 For Investment A Shares/1/
[CHART]
1989 30.97
1990 -3.14
1991 39.87
1992 -0.73
1993 3.31
1994 -1.12
1995 35.40
1996 22.44
1997 35.43
1998 32.83
Past performance does not indicate how the Fund will perform in the future.
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 24.87%
Worst quarter: Q3 1990 -15.34%
Year to Date
Return (12/31/98 to 9/30/99) 0.87%
</TABLE>
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares/1/ 3/4/85 26.83% 23.01% 17.76% 16.79%
(with 4.50% sales
charge)
--------------------------------------------------------------------------
Investment C Shares 3/9/98 N/A N/A N/A 23.41%
(with applicable
Contingent
Deferred Sales Charge)
--------------------------------------------------------------------------
(Since 2/28/85)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.26%
(Since 2/28/98)
S&P 500(R) Index 18.62%
</TABLE>
- --------------------------------------------------------------------------------
- ------
/1/For periods prior to March 6, 1998, reflects performance of Investment A
Shares of The Pinnacle Fund. On March 6, 1998, The Pinnacle Fund, a
registered open-end investment company managed by Heartland Capital
Management, Inc., was merged into Fifth Third Pinnacle Fund.
11
<PAGE>
Fifth Third Balanced Fund [LOGO OF FIFTH THIRD]
Fundamental Capital appreciation and income.
Objective
Principal Under normal market conditions, the Fund uses an asset
Investment allocation strategy, investing in three primary categories
Strategies of securities: stocks, bonds and money market instruments.
The Fund intends to invest between 50% to 75% of total
assets in common and preferred stocks and convertible
preferred stocks and convertible corporate bonds, 25% to
40% of total assets in non-convertible corporate bonds and
U.S. government securities and 0% to 25% in money market
instruments. By analyzing financial trends and market
conditions, the Fund may adjust its allocations from time
to time. However, the Fund takes a moderate to long-term
view of changing market conditions, and tends to avoid
large, sudden shifts in the composition of its portfolio.
The equity position of the Fund tends to be invested in
high quality growth companies that are either large or
mid-sized. While greater emphasis will be placed on larger
companies, that is, companies with market capitalizations
comparable to the market capitalization of those companies
in the S&P 500 Index, the Fund may favor smaller
companies, that is, companies with market capitalization
comparable to the market capitalizations of those
companies in the S&P 400 Index, when Fifth Third Bank
believes that market conditions favor securities of
smaller companies.
The fixed income portion of the Fund tends to be invested
in high quality bonds with maturities ranging from
overnight to thirty years in length. The Fund will attempt
to maintain the average maturity of the bond portion of
the Fund from between 5 and 9 years. At the time of
investment, the corporate bonds and convertible securities
in which the Fund invests are rated investment grade, that
is, in the BBB major rating category or higher by Standard
& Poor's or in the Baa major rating category or higher by
Moody's, or their unrated equivalents.
Principal The principal risks of investing in the Fund include the
Investment risks associated with following an asset allocation
Risks strategy, such as the risk that the Fund will not
correctly anticipate the relative performance of the
different asset classes in which it may invest.
An investment in To the extent the Fund invests in stocks and convertible
the Fund is not securities, it assumes the risks of equity investing,
a deposit of including sudden and unpredictable drops in value and
Fifth Third Bank periods of lackluster performance.
or any other
bank and is not Significant investments in large companies also creates
insured or various risks for the Fund. For instance, larger, more
guaranteed by established companies tend to operate in mature markets,
the FDIC or any which often are very competitive. Larger companies also do
other government not tend to respond quickly to competitive challenges,
agency. especially to changes caused by technology or consumer
preferences.
To the extent the Fund invests in bonds, it assumes the
risks of bond investing, including the tendency of prices
to fall as interest rates rise. That risk is greater for
bonds with longer maturities. Less significant is the risk
that a bond issuer will default on principal or interest
payments. Prices of convertible securities, which include
bonds and preferred stocks, may be affected by the prices
of the underlying security, which generally is common
stock.
12
<PAGE>
Fifth Third Balanced Fund [LOGO FIFTH THIRD BALANCED FUND]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to two broad-based securities indices. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The Lehman Brothers Aggregate Bond Index (the "LBAB Index") is an unmanaged
index generally representative of the performance of the bond market as a whole.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 26.57
1990 9.95
1991 30.13
1992 9.88
1993 1.74
1994 -1.03
1995 26.53
1996 14.23
1997 24.08
1998 17.87
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 17.81%
Worst quarter: Q3 1998 -6.36%
Year to Date Return (12/31/98 to 9/30/99): 0.90%
---------------------------------------------------
</TABLE>
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
-----------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 1/1/83 12.58% 14.85% 15.00% 16.01%
(with 4.50% sales
charge)
--------------------------------------------------------------------
Investment C Shares 4/25/96 17.10% N/A N/A 18.97%
(with applicable
Contingent Deferred
Sales Charge)
--------------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.18%
(Since 4/25/96)
S&P 500(R) Index 28.94%
--------------------------------------------------------------------
(Since 1/1/83)
LBAB Index 8.67% 7.27% 9.26% 10.18%
(Since 4/25/96)
LBAB Index 9.03%
</TABLE>
- --------------------------------------------------------------------------------
13
<PAGE>
Fifth Third Mid Cap Fund [LOGO OF FIFTH THIRD]
Fundamental Growth of Capital. Income is a secondary objective.
Objective
Principal Under normal market conditions, the Fund expects to invest
Investment at least 65% of total assets in common stocks of mid cap
Strategies companies. Mid cap companies are companies with market
capitalizations no larger than 110%, and no smaller than
90%, of the market capitalizations of the companies in the
Standard & Poor's MidCap 400 Index (generally, between
$500 million and $10 billion).
The Fund intends to invest in companies that have the
potential for long-term revenue and earnings growth, solid
balance sheets and which may have the potential to pay
dividends. The Fund generally selects its investments
using traditional research techniques, which include
projections of earnings and dividend growth and the
expected volatility of the markets in which the companies
do business.
To achieve its secondary objective of income, the Fund
relies on dividend and interest income. The Fund may
invest in up to 35% of total assets in common stocks of
large cap companies, many of which pay dividends, as well
as convertible securities which pay interest. At the time
of investment, those convertible securities are rated
investment grade, that is, in the BBB major rating
category or higher by Standard & Poor's, or in the Baa
major rating category or higher by Moody's, or their
unrated equivalents.The Fund may also invest in small cap
stocks.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value or periods of
lackluster performance.
An investment in Stocks of medium-sized companies can be more sensitive to
the Fund is not long market declines than larger companies, in part
a deposit of because they generally do not have the financial resources
Fifth Third Bank that larger companies have. Generally, growth oriented
or any other stocks are sensitive to market movements. The prices of
bank and is not growth stocks tend to reflect future expectations, and
insured or when those expectations change or are not met, share
guaranteed by prices generally fall.
the FDIC or any
other government Stocks that pay regular dividends tend to be less volatile
agency. than stocks that do not. A regular dividend provides
investors some return on their investment, to an extent,
supporting a stock's price, even during periods when
prices of equity securities are falling. However, dividend
paying stocks, especially those that pay significant
dividends, also tend to appreciate less quickly than
stocks of companies in emerging markets, which tend to
reinvest profits into research, development, plant and
equipment to accommodate expansion.
To the extent the Fund invests in bonds, it assumes the
risks of bond investing, including the tendency of prices
to fall as interest rates rise. That risk is greater for
bonds with longer maturities. Less significant is the risk
that a bond issuer will default on principal or interest
payments, which may cause a loss for the Fund. Prices of
convertible securities, which include bonds and preferred
stocks, may be affected by the prices of the underlying
security, which generally is common stock.
14
<PAGE>
Fifth Third Mid Cap Fund [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's MidCap 400
Index (the "S&P 400") is an unmanaged index generally representative of the mid-
cap sector of the U.S. stock market.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 29.05
1990 1.84
1991 46.01
1992 5.05
1993 1.38
1994 1.54
1995 26.03
1996 17.59
1997 32.64
1998 3.29
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 18.88%
Worst quarter: Q3 1990 -16.52%
Year to Date Return (12/31/98 to 9/30/99): -5.20%
---------------------------------------------------
</TABLE>
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
-----------------------
<TABLE>
<CAPTION>
Inception Past Past 5 Past Since
Date Year Years 10 Years Inception
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 1/1/85 -1.36% 14.52% 14.93% 15.12%
(with 4.50% sales charge)
------------------------------------------------------
Investment C Shares 4/24/96 2.65% N/A N/A 15.78%
(with applicable
Contingent Deferred Sales
Charge)
------------------------------------------------------
(Since 12/31/84)
S&P Mid Cap 400(R) Index 19.12% 18.85% 19.29% 18.60%
(Since 4/30/96)
S&P Mid Cap 400(R) Index 22.43%
</TABLE>
- --------------------------------------------------------------------------------
15
<PAGE>
Fifth Third International Equity Fund [LOGO OF FIFTH THIRD]
Fundamental Long-term capital appreciation.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in equity securities of non-U.S.
Strategies companies. The companies whose securities are represented
in the Fund's portfolio are located in at least three
countries other than the U.S.
The Fund uses a top-down, bottom-up strategy of selecting
its portfolio. It allocates assets among geographic
regions and individual countries, investing primarily in
those areas that it believes have the greatest potential
for growth as well as stable exchange rates. Although the
Fund invests primarily in established foreign securities
markets, from time to time, it may also invest in emerging
markets. In selecting stocks in a specific country, the
Fund generally attempts to replicate a broad market index,
which usually is the Morgan Stanley Capital International
Index for that country. From time to time, however, the
Fund may overweight or underweight industries represented
in that index.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as equity securities of
U.S. companies, U.S. and non-U.S. government bonds and
U.S. and non-U.S. corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as, the risk
of sudden and unpredictable drops in value or periods of
lackluster performance.
An investment in Stocks of foreign companies present additional risks for
the Fund is not U.S. investors. Stocks of international companies tend to
a deposit of be less liquid and more volatile than their U.S.
Fifth Third Bank counterparts, in part because accounting standards and
or any other market regulations tend to be less standardized and
bank and is not economic and political climates less stable. Fluctuations
insured or in exchange rates also may reduce or eliminate gains or
guaranteed by create losses. These risks usually are higher in emerging
the FDIC or any markets, such as most countries in Africa, Asia, Latin
other government America and the Middle East. To the extent that the Fund
agency. invests in those kinds of stocks or in those areas, it
will be exposed to the risks associated with those kinds
of investments.
16
<PAGE>
Fifth Third International Equity Fund [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Morgan Stanley Capital
International EAFE Index (the "EAFE Index") is an unmanaged index generally
representative of the foreign stock market.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1995 11.29
1996 8.54
1997 7.96
1998 19.34
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q1 1998 15.70%
Worst quarter: Q3 1998 -11.88%
Year to Date Return (12/31/98 to 9/30/99) 6.83%
------------------------------------------------
</TABLE>
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
-------------------------
<TABLE>
<CAPTION>
Since
Inception Date Past Year Past 5 Years Past 10 Years Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 8/18/94 13.96% N/A N/A 7.93%
(with 4.50% sales
charge)
-------------------------------------------------------------------
Investment C Shares 4/25/96 18.62% N/A N/A 9.74%
(with applicable
Contingent Deferred
Sales Charge)
-------------------------------------------------------------------
(Since 8/31/94)
EAFE Index 20.33% N/A N/A 7.74%
EAFE Index (Since 4/30/96)
7.84%
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
Fifth Third Bond Fund For Income [LOGO OF FIFTH THIRD]
Fundamental High level of current income.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in debt securities and mortgage-backed
Strategies securities. At the time of investment, each of those
securities has a remaining maturity or average life of 10
years or less and is rated as investment grade. Investment
grade securities are securities rated in the BBB major
rating category or higher by Standard & Poor's, or in the
Baa major rating category or higher by Moody's, or their
unrated equivalents.
From time to time, the Fund will invest in mortgage-backed
securities, which generally offer higher interest rates
than many types of debt securities. Mortgage-backed
securities represent interests in the revenue generated
from pools of mortgages.
The Fund strives to manage its portfolio so that it
receives a fairly consistent level of income regardless of
fluctuations in interest rates. Additionally, the Fund may
seek some capital appreciation, especially when bond
prices are rising, if Fifth Third Bank believes that the
Fund can realize such appreciation without foregoing its
objective of high current income.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
and the risk of an issuer defaulting on its obligations of
paying principal and interest.
An investment in Generally, the price of a bond moves in the opposite
the Fund is not direction from interest rates. New bonds issued after a
a deposit of rise in rates offer higher yields to investors. An
Fifth Third Bank existing bond with a lower yield can appear attractive to
or any other investors by selling it at a lower price. This process
bank and is not works in reverse as well; as interest rates fall, the
insured or price of a bond tends to increase.
guaranteed by
the FDIC or any The prices of mortgage-backed securities also are affected
other government by changes in interest rates. Although mortgage-backed
agency. securities tend to pay higher interest rates, they also
carry additional risk. For instance, their prices and
yields typically assume that the securities will be
redeemed at a given time before maturity. When interest
rates fall substantially, they usually are redeemed early
because the underlying mortgages often are prepaid. The
Fund would then have to reinvest the proceeds it receives
because of those redemptions at a lower rate. The price or
yield of mortgage-backed securities also may fall if they
are redeemed after that date.
18
<PAGE>
Fifth Third Bond Fund For Income [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Intermediate
Government/Corporate Index ("LBIGC") is an unmanaged index generally
representative of the performance of the bond market as a whole.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 12.24
1990 8.24
1991 14.62
1992 6.32
1993 8.67
1994 -6.40
1995 16.95
1996 1.86
1997 7.27
1998 7.40
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1989 6.49%
Worst quarter: Q2 1994 -3.55%
Year to Date Return (12/31/98 to 9/30/99) -0.40%
--------------------------------------------------
</TABLE>
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
------------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 1/1/83 2.59% 4.17% 7.03% 8.28%
(with 4.50% sales
charge)
--------------------------------------------------------------------
Investment C Shares 1/27/97 6.86% N/A N/A 6.97%
(with applicable
Contingent Deferred
Sales Charge)
--------------------------------------------------------------------
(Since 1/1/83)
LBIGC 8.42% 6.59% 8.50% 9.30%
(Since 1/27/97)
LBIGC 8.60%
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE>
Fifth Third Quality Bond Fund [LOGO OF FIFTH THIRD]
Fundamental High current income. Capital growth is a secondary
Objective objective.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in U.S. Treasury bills, notes and
Strategies bonds, securities of U.S. Government agencies and
instrumentalities and corporate debt securities, including
mortgage-backed securities. Mortgage-backed securities
generally offer higher interest rates than many types of
debt securities. At the time of investment, each of those
securities has a remaining maturity or average life of 30
years or less. Corporate bonds are rated as investment
grade. Investment grade securities are securities rated in
the BBB major rating category or higher by Standard &
Poor's, or in the Baa major rating category by Moody's, or
their unrated equivalents.
The Fund is managed for growth of capital but with less
volatility than the volatility generally associated with a
portfolio composed solely of stocks. In selecting
portfolio securities, the Fund generally considers, among
other things, remaining maturity, stated interest rates,
the price of the security, as well as the financial
condition of the issuer and its prospects for long-term
growth of earnings and revenues.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as high yield bonds.
The principal risks of investing in the Fund include the
risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
and the risk of an issuer defaulting on its obligations of
paying principal and interest. The prices of long-term
bonds (bonds with a remaining maturity of at least 10
years) tend to be more volatile then the prices of bonds
with a shorter remaining maturity.
Principal Generally, the price of a bond moves in the opposite
Investment Risks direction from interest rates. New bonds issued after a
rise in rates offer higher yields to investors. An
An investment in existing bond with a lower yield can appear attractive to
the Fund is not investors by selling it at a lower price. This process
a deposit of works in reverse as well, as interest rates fall, the
Fifth Third Bank price of a bond tends to increase.
or any other
bank and is not The prices of mortgage-backed securities also are affected
insured or by changes in interest rates. Although mortgage-backed
guaranteed by securities tend to pay higher interest rates, they also
the FDIC or any carry additional risk. For instance, their prices and
other government yields typically assume that the securities will be
agency. redeemed at a given time before maturity. When interest
rates fall substantially, they usually are redeemed early
because the underlying mortgages often are prepaid. The
Fund would then have to reinvest the proceeds it receives
because of those redemptions at a lower rate. The price or
yield of mortgage-backed securities also may fall if they
are redeemed after that date.
From time to time, the Fund's portfolio could be
significantly invested in some of the highest quality debt
securities, which tend not to provide the same opportunity
for current income or capital growth as lower grade
securities, or in BBB/Baa rated debt securities, which
generally have more speculative investment characteristics
than higher grade debt securities.
20
<PAGE>
Fifth Third Quality Bond Fund
[LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Aggregate Bond
Index ("LBAB") is an unmanaged index generally representative of the
performance of the bond market as a whole.
The returns assume that Fund distributions have been reinvested. The returns
for Investment C shares will differ from the returns for Investment A shares
(which are shown in the bar chart) because of differences in expenses of each
class. The table assumes that shareholders redeem their fund shares at the end
of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 11.74
1990 8.04
1991 14.65
1992 6.00
1993 7.52
1994 -3.90
1995 17.18
1996 1.85
1997 8.20
1998 8.45
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1989 6.60%
Worst quarter: Q1 1994 -3.16%
Year to Date Return (12/31/98 to 9/30/99) -1.98%
- ------------------------------------------------
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1998)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
(with 4.50% sales
charge) 1/1/83 3.54% 5.15% 7.32% 8.20%
-------------------------------------------------------------------
Investment C Shares
(with applicable
Contingent Deferred
Sales Charge) 4/25/96 7.71% N/A N/A 7.29%
-------------------------------------------------------------------
<CAPTION>
(Since 1/1/83)
<S> <C> <C> <C> <C> <C>
LBAB 8.67% 7.27% 9.26% 10.18%
<CAPTION>
(Since 4/25/96)
<S> <C> <C> <C> <C> <C>
LBAB 9.03%
- ----------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
Fifth Third U.S. Government Securities Fund [LOGO OF FIFTH THIRD]
Fundamental High level of current income. Capital growth is a
Objective secondary objective.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in U.S. government securities. At the
Strategies time of investment each of those securities has a
remaining maturity or average life of 7 years or less,
although the Fund attempts to minimize fluctuations in the
value of its shares.
U.S. government securities are debt securities issued or
guaranteed as to principal or interest by the U.S.
Treasury, various government agencies or certain
organizations, which have been formed by an Act of
Congress. They may include securities issued or sponsored
by Government National Mortgage Association (Ginnie Mae),
Federal National Mortgage Association (Fannie Mae) and
Federal Home Loan Mortgage Corporation (Freddie Mac).
U.S. Treasury securities are direct obligations of the
U.S. Government, and are backed by the U.S. Government's
full faith and credit. The principal and interest to be
paid on securities issued by some U.S. government agencies
also may be backed by the U.S. Government's full faith and
credit, by other obligations of the Treasury or by the
agency itself. While there are different degrees of credit
quality, all U.S. government securities generally are
considered highly credit worthy.
In selecting portfolio securities, the Fund generally
considers, among other things, stated interest rates and
the price of a security. The Fund attempts to limit
volatility of Fund share prices by managing the average
life of the Fund's investment portfolio.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as corporate bonds and
high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
and the risk of an issuer defaulting on its obligations of
paying principal and interest.
An investment in Generally, the price of a bond moves in the opposite
the Fund is not direction from interest rates. New bonds issued after a
a deposit of rise in rates offer higher yields to investors. An
Fifth Third Bank existing bond with a lower yield can appear attractive to
or any other investors by selling it at a lower price. This process
bank and is not works in reverse as well; as interest rates fall, the
insured or price of a bond tends to increase.
guaranteed by
the FDIC or any
other government
agency.
22
<PAGE>
Fifth Third U.S. Government Securities Fund [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Intermediate
Government Bond Index ("LBIGBI") is an unmanaged index generally representative
of intermediate-term government bonds.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 8.78
1990 8.45
1991 9.51
1992 5.27
1993 6.19
1994 -2.18
1995 13.01
1996 2.45
1997 7.14
1998 7.38
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1995 4.49%
Worst quarter: Q1 1994 -1.99%
Year to Date Return (12/31/98 to 9/30/99) 0.07%
----------------------------------------------------
</TABLE>
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
-----------------------
<TABLE>
<CAPTION>
Inception
Date Past Year Past 5 Years Past 10 Years Since Inception
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
(with 4.50% sales 1/1/86 2.56% 4.46% 6.03% 5.90%
charge)
-----------------------------------------------------------------
Investment C Shares
(with applicable 4/24/96 6.64% N/A N/A 6.07%
Contingent Deferred
Sales Charge)
-----------------------------------------------------------------
(Since 1/1/86)
LBIGBI 8.47% 6.45% 8.34% 8.17%
(Since 4/30/96)
LBIGBI 8.00%
</TABLE>
- --------------------------------------------------------------------------------
23
<PAGE>
Fifth Third Municipal Bond Fund [LOGO OF FIFTH THIRD]
Fundamental High level of current income that is exempt from federal
Objective regular income taxes.
Principal Under normal market conditions, the Fund invests at least
Investment 80% of total assets in municipal securities, which pay
Strategies interest that is exempt from federal income tax. The
securities generally are issued by U.S. states, counties,
cities, towns, territories and public authorities. At the
time of investment, they are rated as investment grade.
Investment grade securities are securities rated in the
BBB major rating category or higher by Standard & Poor's
or in the Baa major rating category by Moody's, or their
unrated equivalents.
Among the securities in which the Fund may invest are
participation agreements, that is, interests in loans made
to municipalities, and general obligation and revenue
bonds of tax-exempt municipalities. The Fund also may
invest in limited obligation securities, from which
interest and principal payments are dependent on payments
from specific sources rather than the general obligations
of the government issuer. Limited obligation securities
include: lease obligations and installment contracts
(issued by government entities to obtain funds to lease or
acquire equipment and other property), project finance
obligations (issued in connection with the financing of
infrastructure projects) and industrial revenue bonds
(issued in the name of a public authority to finance
infrastructure used by a private entity).
In selecting portfolio securities the Fund generally
considers, among other things, remaining maturity or
average life, stated interest rates and the price of a
security. The Fund attempts to manage volatility by
maintaining a portfolio with an intermediate average life.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as U.S. government
securities, corporate bonds and high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
and the risk of an issuer defaulting on its obligations of
paying principal and interest.
An investment in Generally, the price of a bond moves in the opposite
the Fund is not direction from interest rates. New bonds issued after a
a deposit of rise in rates offer higher yields to investors. An
Fifth Third Bank existing bond with a lower yield can appear attractive to
or any other investors by selling it at a lower price. This process
bank and is not works in reverse as well; as interest rates fall, the
insured or price of a bond tends to increase.
guaranteed by
the FDIC or any The Fund's performance may be affected by political and
other government economic factors at the state, regional or national level.
agency. Those factors may include budgetary problems and declining
tax bases. Actual or proposed changes in tax rates also
may affect your net return. Limited obligation securities
are not general obligations of the issuers. As a result,
in the event of a default or termination, the security
holders may have limited recourse.
24
<PAGE>
Fifth Third Municipal Bond Fund [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Municipal Bond
Index ("LBMBI") is an unmanaged index that generally is representative of
municipal bonds with intermediate maturities.
The returns assume that Fund distributions have been reinvested. The returns
for Investment C will differ from the returns for Investment A shares (which
are shown in the bar chart) because of differences in expenses of each class.
The table assumes that shareholders redeem their fund shares at the end
of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 8.10
1990 6.89
1991 8.60
1992 6.25
1993 6.76
1994 -2.30
1995 9.68
1996 3.26
1997 6.88
1998 5.57
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1989 4.29%
Worst quarter: Q1 1994 -3.12%
Year to Date Return (12/31/98 to 9/30/99) -2.81%
--------------------------------------------------
</TABLE>
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
---------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
(with 4.50% sales
charge) 1/1/83 0.81% 3.59% 5.43% 6.85%
--------------------------------------------------------------------
<CAPTION>
(Since 12/31/82)
<S> <C> <C> <C> <C> <C>
LBMBI 6.48% 6.23% 8.22% 9.52%
- -----------------------------------------------------------------------------------------
</TABLE>
As of July 31, 1999, no shares or assets existed in the Investment C shares.
Fifth Third Municipal Bond Fund, however, continues to offer Investment C
shares.
25
<PAGE>
Fifth Third Ohio Tax Free Bond Fund [LOGO OF FIFTH THIRD OHIO]
Fundamental Current income exempt from federal income tax and the
Objective personal income taxes imposed by the State of Ohio and
Ohio municipalities.
Principal Under normal market conditions, the Fund invests at least
Investment 80% of net assets in municipal securities which pay
Strategies interest that is exempt from personal income taxes imposed
by Ohio and its municipalities. The securities generally
are issued by the State of Ohio, as well as counties,
cities, towns, territories and public authorities in Ohio.
At the time of investment, they are rated as investment
grade. Investment grade securities are securities rated in
the BBB major rating category or higher by Standard &
Poor's or in the Baa major rating category by Moody's, or
their unrated equivalents.
Among the securities in which the Fund may invest are
participation agreements, that is, interests in loans made
to municipalities, and general obligation and revenue
bonds of tax-exempt municipalities. The Fund also may
invest in limited obligation securities, from which
interest and principal payments are dependent on payments
from specific sources rather than the general obligations
of the government issuer. Limited obligation securities
include: lease obligations and installment contracts
(issued by government entities to obtain funds to lease or
acquire equipment and other property), project finance
obligations (issued in connection with the financing of
infrastructure projects) and industrial revenue bonds
(issued in the name of a public authority to finance
infrastructure used by a private entity).
In selecting portfolio securities, the Fund considers,
among other things, remaining maturity or average life,
stated interest rates and the price of a security. The
Fund attempts to manage volatility by maintaining a
portfolio with an intermediate average life.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
An investment in and the risk of an issuer defaulting on its obligations of
the Fund is not a paying principal and interest.
deposit of Fifth
Third Bank or any Generally, the price of a bond moves in the opposite
other bank and is direction from interest rates. New bonds issued after a
not insured or rise in rates offer higher yields to investors. An
guaranteed by the existing bond with a lower yield can appear attractive to
FDIC or any other investors by selling it at a lower price. This process
government agency. works in reverse as well; as interest rates fall, the
price of a bond tends to increase.
The Fund's performance may be affected by political and
economic factors at the state or regional level. Those
factors may include budgetary problems and declining tax
bases. Actual or proposed changes in tax rates also may
affect your net return. Limited obligation securities are
not general obligations of the issuers. As a result, in
the event of a default or termination, the security
holders may have limited recourse. Economic activity in
Ohio, as in many other states with a significant
industrial base, tends to be more cyclical than in other
states and in the nation as a whole.
This Fund is a non-diversified fund with regard to issuers
of securities. As a result, it does not have to invest in
as many issuers as a diversified fund and thus, could be
significantly affected by the performance of one or a
small number of issuers.
26
<PAGE>
Fifth Third Ohio Tax Free Bond Fund [LOGO OF FIFTH THIRD]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Municipal Bond
Index ("LBMBI") is an unmanaged index that generally is representative of
municipal bonds with intermediate maturities.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C will differ from the returns for Investment A shares (which are
shown in the bar chart) because of differences in expenses of each class. The
table assumes that shareholders redeem their fund shares at the end of the
period indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1989 8.52
1990 5.70
1991 9.46
1992 6.24
1993 6.71
1994 -4.01
1995 13.72
1996 3.48
1997 6.92
1998 5.50
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q1 1995 5.53%
Worst quarter: Q1 1994 -3.78%
Year to Date Return (12/31/98 to 9/30/99) -2.49%
---------------------------------------------------
</TABLE>
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
------------------------
<TABLE>
<CAPTION>
Inception
Date Past Year Past 5 Years Past 10 Years Since Inception
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
(with 4.50% sales 1/1/87 0.72% 4.00% 5.65% 4.94%
charge)
----------------------------------------------------------------
Investment C Shares
(with applicable 4/24/96 4.76% N/A N/A 5.36%
Contingent Deferred
Sales Charge)
----------------------------------------------------------------
(Since 12/31/86)
LBMBI 6.48% 6.23% 8.22% 7.80%
(Since 4/30/96)
LBMBI 8.14%
</TABLE>
- -------------------------------------------------------------------------------
27
<PAGE>
Shareholder Fees and Fund Expenses
Fee Tables
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Funds.
Shareholder fees are paid by you at the time you purchase or sell your shares.
Annual Fund operating expenses are paid out of Fund assets, and are reflected
in the share price. Each Fund's fees and expenses are based upon the Fund's
estimated operating expenses for the fiscal year ended July 31, 1999.
<TABLE>
<CAPTION>
Stock Funds--Fee Table
----------------------
Fifth Third Fifth Third
Quality Equity Fifth Third Fifth Third Fifth Third Fifth Third Fifth Third
Growth Income Cardinal Pinnacle Balanced Mid Cap International Equity
Fund Fund Fund Fund Fund Fund Fund
A C A C A C A C A C A C A C
Shareholder Fees
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales
Charge (Load)
Imposed on
Purchases 4.50% None 4.50% None 4.50% None 4.50% None 4.50% None 4.50% None 4.50% None
- ------------------------------------------------------------------------------------------------------------------------
Maximum Sales
Charge (Load)
Imposed on
Reinvested
Dividends None None None None None None None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------
Maximum Deferred
Sales Load None 1.00% None 1.00% None 1.00% None 1.00% None 1.00% None 1.00% None 1.00%
- ------------------------------------------------------------------------------------------------------------------------
Annual Fund
Operating
Expenses (as a
percentage of
average net
assets)
Management fees 0.80% 0.80% 0.80% 0.80% 0.60% 0.60% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 1.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------------
Distribution/Service
(12b-1) fees/1/ 0.25% 1.00% 0.25% 1.00% 0.25% 1.00% 0.25% 1.00% 0.25% 1.00% 0.25% 1.00% 0.25% 1.00%
- ------------------------------------------------------------------------------------------------------------------------
Other expenses 0.24% 0.30% 0.32% 0.33% 0.26% 0.29% 0.38% 0.41% 0.29% 0.25% 0.34% 0.37% 0.45% 0.50%
- ------------------------------------------------------------------------------------------------------------------------
Total Annual
Fund Operating
Expenses 1.29% 2.10% 1.37% 2.13% 1.11% 1.89% 1.43% 2.21% 1.34% 2.05% 1.39% 2.17% 1.70% 2.50%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Because some of the fund's expenses have been reduced
through expense waivers and reimbursements, actual
total operating expenses for the prior year would have
been as shown below.
Net Total Annual
Fund Operating
Expenses 1.21% 1.80% 1.27% 1.83% 1.04% 1.65% 1.41% 1.95% 1.28% 1.76% 1.28% 1.85% 1.52% 2.25%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ Certain Service Organizations may receive fees from a Fund in amounts up to
an annual rate of 0.25% of the daily net asset value of the Fund shares owned
by the shareholders with whom the Service Organization has a servicing
relationship.
28
<PAGE>
Shareholder Fees and Fund Expenses
<TABLE>
<CAPTION>
Bond Funds--Fee Table
---------------------
Fifth
Fifth Third Third Fifth Third Fifth Third Fifth Third
Bond Fund for Quality U.S. Government Municipal Bond Ohio Tax Free
Income Bond Fund Securities Fund Fund Bond Fund
A C A C A C A C/1/ A C
Shareholder Fees
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed on
Purchases 4.50% None 4.50% None 4.50% None 4.50% None 4.50% None
- ---------------------------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) Imposed on
ReinvestedDividends None None None None None None None None None None
- ---------------------------------------------------------------------------------------------------------
Maximum Deferred Sales
Load None 1.00% None 1.00% None 1.00% None 1.00% None 1.00%
- ---------------------------------------------------------------------------------------------------------
Annual Fund Operating
Expenses (as a
percentage of average
net assets)
Management fees 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
- ---------------------------------------------------------------------------------------------------------
Distribution/Service
(12b-1) fees/2/ 0.25% 1.00% 0.25% 1.00% 0.25% 1.00% 0.25% 1.00% 0.25% 1.00%
- ---------------------------------------------------------------------------------------------------------
Other expenses 0.22% 0.27% 0.29% 0.24% 0.48% 0.39% 0.32% 0.33% 0.41% 0.38%
- ---------------------------------------------------------------------------------------------------------
Total Annual Fund
Operating Expenses 1.02% 1.82% 1.09% 1.79% 1.28% 1.94% 1.12% 1.88% 1.21% 1.93%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Because some of the fund's expenses have been reduced
through expense waivers and reimbursements, actual
total operating expenses for the prior year would have
been as shown below.
Net Total Annual Fund
Operating Expenses 0.97% 1.54% 0.92% 1.43% 0.95% 1.40% 0.81% 1.50% 1.00% 1.55%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
/1/ Other Expenses and Total Fund Operating Expenses of the Funds are estimated
for the current fiscal year. As of July 31, 1999, no shares or assets existed
in the Investment C shares of Fifth Third Municipal Bond Fund. Fifth Third
Municipal Bond Fund Investment C shares continue to be open for investment with
an offering price equal to Fifth Third Municipal Bond Fund Investment A shares.
/2/ Certain Service Organizations may receive fees from a Fund in amounts up to
an annual rate of 0.25% of the daily net asset value of the Fund shares owned
by the shareholders with whom the Service Organization has a servicing
relationship.
29
<PAGE>
Shareholder Fees and Fund Expenses
Expense Examples
Use the tables below to compare fees and expenses with the fees and expenses of
other mutual funds. The tables illustrate the amount of fees and expenses you
and the Fund would pay, assuming a $10,000 initial investment, 5% annual
return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Amounts are presented assuming redemption at the end of
each period or no redemption in the case of Investment C Shares. Because these
examples are hypothetical and for comparison only, your actual costs may be
different.
<TABLE>
<CAPTION>
Stock Funds
Fifth Third Quality
Growth 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $575 $841 $1,126 $1,936
---------------------------------------------
Investment C Shares
Assuming Redemption $313 $658 $1,129 $2,431
Assuming no Redemption $213 $658 $1,129 $2,431
---------------------------------------------
<CAPTION>
Fifth Third Equity 1 3 5 10
Income Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $583 $864 $1,166 $2,022
---------------------------------------------
Investment C Shares
Assuming Redemption $316 $667 $1,144 $2,462
Assuming no Redemption $216 $667 $1,144 $2,462
---------------------------------------------
<CAPTION>
Fifth Third Cardinal 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $558 $787 $1,034 $1,741
---------------------------------------------
Investment C Shares
Assuming Redemption $292 $594 $1,021 $2,212
Assuming no Redemption $192 $594 $1,021 $2,212
---------------------------------------------
<CAPTION>
Fifth Third Pinnacle 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $589 $882 $1,196 $2,086
---------------------------------------------
Investment C Shares
Assuming Redemption $324 $691 $1,185 $2,544
Assuming no Redemption $224 $691 $1,185 $2,544
---------------------------------------------
<CAPTION>
Fifth Third Balanced 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $580 $855 $1,151 $1,990
---------------------------------------------
Investment C Shares
Assuming Redemption $308 $643 $1,103 $2,379
Assuming no Redemption $208 $643 $1,103 $2,379
---------------------------------------------
</TABLE>
30
<PAGE>
Shareholder Fees and Fund Expenses
<TABLE>
<CAPTION>
Fifth Third Mid Cap 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $585 $870 $1,176 $2,043
---------------------------------------------
Investment C Shares
Assuming Redemption $320 $679 $1,164 $2,503
Assuming no Redemption $220 $679 $1,164 $2,503
---------------------------------------------
<CAPTION>
Fifth Third
International 1 3 5 10
Equity Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $615 $962 $1,331 $2,368
---------------------------------------------
Investment C Shares
Assuming Redemption $353 $779 $1,331 $2,836
Assuming no Redemption $253 $779 $1,331 $2,836
---------------------------------------------
Bond Funds
<CAPTION>
Fifth Third Bond Fund
For 1 3 5 10
Income Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $549 $760 $ 988 $1,642
---------------------------------------------
Investment C Shares
Assuming Redemption $285 $573 $ 985 $2,137
Assuming no Redemption $185 $573 $ 985 $2,137
---------------------------------------------
<CAPTION>
Fifth Third Quality
Bond 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $556 $781 $1,024 $1,719
---------------------------------------------
Investment C Shares
Assuming Redemption $282 $563 $ 970 $2,105
Assuming no Redemption $182 $563 $ 970 $2,105
---------------------------------------------
<CAPTION>
Fifth Third U.S.
Government Securities 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $575 $838 $1,121 $1,926
---------------------------------------------
Investment C Shares
Assuming Redemption $297 $609 $1,047 $2,264
Assuming no Redemption $197 $609 $1,047 $2,264
---------------------------------------------
<CAPTION>
Fifth Third Municipal 1 3 5 10
Bond Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $559 $790 $1,039 $1,752
---------------------------------------------
Investment C Shares
Assuming Redemption $291 $591 $1,016 $2,201
Assuming no Redemption $191 $591 $1,016 $2,201
---------------------------------------------
</TABLE>
31
<PAGE>
Shareholder Fees and Fund Expenses
<TABLE>
<CAPTION>
Fifth Third Ohio Tax
Free 1 3 5 10
Bond Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $568 $817 $1,085 $1,850
---------------------------------------------
Investment C Shares
Assuming Redemption $296 $606 $1,042 $2,254
Assuming no Redemption $196 $606 $1,042 $2,254
---------------------------------------------
</TABLE>
32
<PAGE>
Additional Information About The Funds' Investments
The primary investments and investment strategies of the Funds are described
above. Below are descriptions of some additional investments and strategies of
the Funds, some of their risks as well as other risks of investing in the
Funds. A list of each Fund's investments is included in the Funds' most recent
annual or semi-annual report to shareholders. Please note, though, that a Fund
may adjust the composition of its portfolio as market and economic conditions
change.
The success of achieving each Fund's investment strategy depends on Fifth Third
Bank's, Heartland's or MSAM's ability to assess the potential of the securities
in which the Fund invests as well as to evaluate and anticipate changing
economic and market conditions.
International Many U.S. companies in which the Funds may invest
Exposure generate significant revenues and earnings from abroad.
(Applies to all As a result, those companies and the prices of their
Equity and Bond securities may be affected by weaknesses in global and
Funds) regional economies and the relative value of foreign
currencies to the U.S. dollar. Taken as a whole, those
factors could adversely affect the price of Fund shares.
Foreign Foreign securities are generally more volatile than their
Securities domestic counterparts, in part because of higher
(Applies to Fifth political and economical risks, the general lack of
Third Quality reliable information and fluctuations in currency
Growth, Fifth exchange rates. Those risks are usually higher in less
Third Equity developed countries.
Income, Fifth
Third Mid Cap, In addition, foreign securities may be more difficult to
Fifth Third resell and the markets for them less efficient than for
International comparable U.S. securities. Even where a foreign security
Equity, Fifth increases in price in its local currency, the
Third Bond Fund appreciation may be diluted by the negative effect of
for Income, and exchange rates when the security's value is converted to
Fifth Third U.S. dollars. Foreign withholding taxes also may apply
Quality Bond and errors and delays may occur in the settlement process
Funds) for foreign securities.
The fund may use foreign currencies and related
instruments to hedge its foreign investments.
Repurchase Each Fund may enter into repurchase agreements. A
Agreements repurchase agreement is an agreement in which a Fund buys
(Applies to all securities from a bank or other financial institution and
Funds) agrees to sell it back at a specified time and place. The
risks of repurchase agreements include the risk that a
counterparty will not buy back the securities as required
and the securities decline in value. To mitigate those
risks, the Funds intend to enter repurchase agreements
only with high quality counterparties and purchase only
high quality, short-term debt securities.
Securities Each Fund may seek additional income or fees by lending
Lending portfolio securities to qualified institutions. By
(Applies to all reinvesting any cash collateral it receives in these
Funds) transactions, a Fund could realize additional gains or
losses. If the borrower fails to return the securities
and the invested collateral has declined in value, a Fund
could lose money.
33
<PAGE>
Additional Information About The Funds' Investments
Restricted and Any securities that are thinly traded or whose resale is
Illiquid Securities restricted can be difficult to sell at a desired time and
(Applies to all price. Some of those securities are new and complex, and
Funds) trade only among institutions; the markets for these
securities are still developing and may not function as
efficiently as established markets. Owning a large
percentage of restricted or illiquid securities could
hamper a Fund's ability to raise cash in order to meet
redemptions. Also, because there may not be an
established market price for these securities, a Fund may
have to estimate their value, which means that their
valuation (and, to a much smaller extent, the valuation
of the Fund) may have a subjective element.
Derivatives Derivatives, a category that includes warrants, options
(Applies to all and futures, are financial instruments whose value
Funds) derives from another security, an index or currency. Each
Fund may use derivatives for hedging (attempting to
offset a potential loss in one position by establishing
an interest in an opposite position). This includes the
use of currency-based derivatives for hedging its
positions in foreign securities. The Funds may also use
derivatives for speculation (investing for potential
income or capital gain).
While hedging can guard against potential risks, it adds
to a Fund's expenses and can eliminate some opportunities
for gains. There is also a risk that a derivative
intended as a hedge may not perform as expected.
The main risk with derivatives is that some types can
amplify a gain or loss, potentially earning or losing
substantially more money than the actual cost of the
derivative.
With some derivatives, whether used for hedging or
speculation, there is also the risk that the counterparty
may fail to honor its contract terms, causing a loss for
a Fund.
When-Issued Each Fund may invest in securities prior to their date of
Securities issue. These securities could fall in value by the time
(Applies to all they are actually issued, which may be any time from a
Funds) few days to over a year.
Bonds The value of any bond held by a Fund is likely to decline
(Applies to all when interest rates rise; this risk is greater for bonds
Funds) with longer maturities. A less significant risk is that a
bond issuer could default on principal or interest
payments, causing a loss for a Fund.
Short-Term Trading While the Funds ordinarily do not trade securities for
(Applies to all short-term profits, they may sell any security at any
Funds) time they believe best, which may result in short-term
trading. Short-term trading can increase a Fund's
transaction costs and may increase your tax liability if
there are capital gains.
Defensive Investing During unusual market conditions, each Fund may place up
(Applies to all to 100% of total assets in cash or high-quality, short-
Funds) term debt securities. To the extent that a Fund does
this, it is not pursuing its goal.
34
<PAGE>
Additional Information About The Funds' Investments
Year 2000 Fifth Third Bank and BISYS Fund Services Limited
(Applies to all Partnership ("BISYS"), the Funds' administrator, do not
Funds) currently anticipate that computer problems related to
the year 2000 will have a material effect on any Fund.
There can be no assurances in this area, however, and
although Fifth Third Funds and BISYS have undertaken
significant projects to minimize the risk of year 2000
computer problems, some factors, including the year 2000
compliance of Fifth Third Fund's and BISYS's suppliers,
are not within their direct control and could negatively
affect communications systems, investment markets or the
economy in general.
35
<PAGE>
Fund Management
INVESTMENT ADVISORS AND SUBADVISOR
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, serves as
investment advisor to all Funds other than Fifth Third Pinnacle Fund. Heartland
Capital Management, Inc., 251 North Illinois Street, Suite 300, Indianapolis,
Indiana 46204, serves as investment advisor to Fifth Third Pinnacle Fund. Each
of those two advisors is a subsidiary of Fifth Third Bancorp. Morgan Stanley
Asset Management, Inc., 1221 Avenue of the Americas, New York, New York 46204,
serves as investment subadvisor to Fifth Third International Equity Fund.
As of September 30, 1999, Fifth Third Bank had approximately $18 billion of
assets under management, including approximately $4.6 billion of assets of
Fifth Third Funds. As of September 30, 1999, Heartland had approximately $1.8
billion of assets under management, including approximately $118 million of
assets held by mutual funds. As of September 30, 1999, MSAM had approximately
$175 billion of assets under management, including approximately $44.98 billion
of assets held by mutual funds.
The management and subadvisory fees paid by the Funds for the fiscal year ended
July 31, 1999 are as follows:
<TABLE>
<CAPTION>
As a percentage of
average net assets
- ---------------------------------------------------------
<S> <C>
Fifth Third Quality Growth Fund 0.80%
- ---------------------------------------------------------
Fifth Third Equity Income Fund 0.80%
- ---------------------------------------------------------
Fifth Third Cardinal Fund 0.60%
- ---------------------------------------------------------
Fifth Third Pinnacle Fund 0.80%
- ---------------------------------------------------------
Fifth Third Balanced Fund 0.80%
- ---------------------------------------------------------
Fifth Third Mid Cap Fund 0.80%
- ---------------------------------------------------------
Fifth Third International Equity Fund 1.00%
(subadvisory fee) (0.45%)*
- ---------------------------------------------------------
Fifth Third Bond Fund For Income 0.55%
- ---------------------------------------------------------
Fifth Third Quality Bond Fund 0.55%
- ---------------------------------------------------------
Fifth Third U.S. Government
Securities Fund 0.55%
- ---------------------------------------------------------
Fifth Third Municipal Bond Fund 0.55%
- ---------------------------------------------------------
Fifth Third Ohio Tax Free Bond Fund 0.55%
- ---------------------------------------------------------
</TABLE>
* Fifth Third Bank was responsible for paying this fee from the fees it
received as investment manager to Fifth Third International Equity Fund.
36
<PAGE>
Fund Management
PORTFOLIO MANAGERS
Fifth Third Bank
Equity Funds
Steven E. Folker has been the portfolio manager for Fifth Third Quality Growth
Fund, Fifth Third Balanced Fund and Fifth Third Mid Cap Fund since 1993 and
Fifth Third Cardinal Fund since 1998. Currently, he is the Chief Equity
Strategist for Fifth Third Investment Advisors and is Vice President and Trust
Officer of Fifth Third Bank. He is also a Chartered Financial Analyst, has over
16 years of investment experience and is a member of the Cincinnati Society of
Financial Analysts. He earned a B.B.A. in Finance & Accounting and an M.S. in
Finance, Investments & Banking from the University of Wisconsin.
John B. Schmitz has managed Fifth Third International Equity Fund since 1994,
and Fifth Third Equity Income Fund since 1997. He is a Vice President and Trust
Officer of Fifth Third Bank, a Chartered Financial Analyst and has over 12
years of experience. He is also a member of the Cincinnati Society of Financial
Analysts. Mr. Schmitz graduated with a B.B.A. in Finance & Real Estate from the
University of Cincinnati.
Bond Funds
Investment decisions for all of the Fifth Third bond funds as well as the bond
portion of Fifth Third Balanced Fund are made by a team of investment
professionals, all of whom are employees of Fifth Third Bank.
Heartland Capital Management, Inc.
Robert D. Markley, President and Chief Executive Officer of Heartland and
Thomas F. Maurath, Executive Vice President of Heartland, have been primarily
responsible for management of Fifth Third Pinnacle Fund and management of its
predecessor fund since 1985. Mr. Markley is a Chartered Financial Analyst and
holds a B.A. in Marketing from Michigan State University and an M.B.A. from
Northwestern University. Mr. Maurath also is a Chartered Financial Analyst who
earned a B.B.A. in Accounting from the University of Notre Dame and a M.B.A.
from Indiana University.
Morgan Stanley Asset Management, Inc.
Barton M. Biggs has served as portfolio manager of the Fifth Third
International Equity Fund since 1994. He has been Chairman and a Director of
MSAM since 1980 and Managing Director of Morgan Stanley & Co. Incorporated
since 1975. He is also a Director of Morgan Stanley Group, Inc. and a Director
and Officer of six registered investment companies to which MSAM and certain of
its affiliates provides investment advisory services. Mr. Biggs holds a B.A.
from Yale University and an M.B.A. from New York University.
37
<PAGE>
Fund Management
FUND ADMINISTRATION
BISYS serves as the administrator of the Funds. The administrator generally
assists in all aspects of the Funds' administration and operation, including
providing the Funds with certain administrative personnel and services
necessary to operate the Funds, such as legal and accounting services. BISYS
provides these at an annual rate as specified below:
<TABLE>
<CAPTION>
Maximum Average Aggregate Daily
Aministrative Feed Net Assets of the Trust
<S> <C>
0.20% of the first $1 billion
0.18% of the next $1 billion
0.17% in excess of $2 billion
</TABLE>
BISYS may periodically waive all or a portion of its administrative fee which
will cause the yield of a Fund to be higher than it would otherwise be in the
absence of such a waiver.
Pursuant to a separate agreement with BISYS, Fifth Third Bank performs sub-
administrative services on behalf of each Fund, including providing certain
administrative personnel and services necessary to operate the Funds, Fifth
Third Bank receives a fee from BISYS for providing sub-administrative services
at an annual rate of 0.025% of the average aggregate daily net assets of all
the Funds.
38
<PAGE>
Shareholder Information
PURCHASING AND SELLING FUND SHARES
Pricing Fund Shares
The price of Fund shares is based on the Fund's Net Asset Value (NAV). The
value of each portfolio instrument held by the Funds is determined by using
market prices. Under special circumstances, such as when an event occurs after
the close of the exchange on which a Fund's portfolio securities are
principally traded, which, in the investment manager's opinion has materially
affected the price of those securities, the Fund may use fair value pricing.
Each Fund's NAV is calculated at 4:00 p.m. Cincinnati time each day the New
York Stock Exchange is open for regular trading and the Federal Reserve Bank of
Cleveland is open for business. Each Fund's NAV may change on days when
shareholders will not be able to purchase or redeem Fund shares. The Funds will
be closed on those days that Fifth Third Bank is closed and on the following
holidays: New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day and Christmas.
PURCHASING AND ADDING TO YOUR SHARES
You may purchase shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your purchase price will be the next NAV after your purchase order, completed
application and full payment have been received by the Funds or its transfer
agent. All orders must be received by the Funds or its transfer agent prior to
4:00 p.m. Cincinnati time in order to receive that day's NAV.
You may purchase Investment A and Investment C shares through Fifth Third
Securities, Inc. as well as broker-dealers and financial institutions which
have a sales agreement with the distributor of Fund shares. (Special rules
apply for former shareholders of the Cardinal Funds and The Pinnacle Fund. See
below.) In order to purchase Investment A shares through Fifth Third
Securities, Inc. or another financial institution, you must open an account
with that institution. That account will be governed by its own rules and
regulations, which may be more stringent than the rules and regulations
governing an investment in the Funds, and you should consult your account
documents for full details. Your shares in the Funds will be held in an omnibus
account in the name of that institution.
The entity through which you are purchasing your shares is responsible for
transmitting orders to the Funds by 4:00 p.m. Cincinnati time and it may have
an earlier cut-off time for purchase requests. Consult that entity for specific
information.
Minimum Investments The minimum initial investment in Investment A shares or
Investment C shares of the Funds offered by this
Prospectus is $1,000. Subsequent investments must be in
amounts of at least $50.
All purchases must be in U.S. dollars. A fee may be
charged for any checks that do not clear. Third-party
checks are not accepted.
For details, contact the Trust toll-free at 1-888-799-5353
or write to: Fifth Third Funds, c/o Fifth Third Bank, 38
Fountain Square Plaza, Cincinnati, Ohio 45263.
The Funds may reject a purchase order for any reason.
Systematic You may make monthly systematic investments in Investment
Investment Program A shares of the Funds from your bank account. There is no
minimum amount required for initial amounts invested into
the Funds. You may elect to make systematic investments on
the 15th of each month, the last business day of each
month, or both. If the 15th or the last business day of a
month is not a day on which the Funds are open for
business, the purchase will be made on the previous day
the Funds are open for business. Please contact Fifth
Third Securities, Inc. or your financial institution for
more information.
39
<PAGE>
Shareholder Information
Avoid 31% Tax Withholding
Each Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) in compliance with IRS rules. To
avoid this withholding, make sure you provide your correct Tax Identification
Number.
Instructions for Purchases by Former Cardinal Funds and The Pinnacle Fund
Shareholders
If you held in your name (rather than through a brokerage account) shares of
any of the Cardinal Funds or the Pinnacle Fund at the time those funds were
merged into one of the Fifth Third Funds, and you continue to hold in your name
the shares of the Fifth Third Fund that you received in the merger or by way of
a subsequent exchange, you may purchase additional shares of that Fifth Third
Fund directly from the Funds rather than through Fifth Third Securities, Inc.
or another financial institution. The Funds reserve the right to change or
eliminate these privileges at any time.
By Mail For Subsequent Investments:
1. Use the investment slip attached to your account statement.
Or, if unavailable, provide the following information:
. Fund name
. Share class
. Amount invested
. Account name and account number
2. Make check, bank draft or money order payable to "Fifth
Third Funds" and include your account number on the check.
3. Mail or deliver investment slip and full payment to the
following address:
By Regular Mail: By Express Mail:
Fifth Third Funds Fifth Third Funds
P.O. Box 5354 312 Walnut Street, 21st Floor
Cincinnati, OH 45201-5354 Cincinnati, OH 45202-3874
By Wire
Transfer For Subsequent Investments:
Instruct your bank to wire transfer your investment to:
Fifth Third Bank
ABA 042000314
Credit Fifth Third Funds 999-41387
FFC: Shareholder name, Fund name, and Account number
Note: Your bank may charge a wire transfer fee.
Systematic To begin making systematic investments or to increase the
Investment amounts you already are investing:
Program
.Write a letter of instruction indicating:
. Your bank name, address, account number, and ABA routing
number
. The amount you wish to invest automatically
.Attach a voided personal check.
.Mail To:
Fifth Third Funds
P. O. Box 5354
Cincinnati, Ohio 45201-5354
40
<PAGE>
Shareholder Information
Selling Your Shares
You may sell your shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your sales price will be the next NAV after your sell order is received by the
Funds, its transfer agent, or your investment representative. All orders must
be received by the Funds or its transfer agent prior to the time the Fund
calculates its NAV in order to receive that day's NAV. If your order has been
received by the Fund prior to the time the Fund calculates its NAV, and your
shares have been sold you will not receive the dividend declared for that day.
Normally you will receive your proceeds within a week after your request is
received.
You may sell Investment A shares through Fifth Third Securities, Inc. or the
financial institution through which you purchased them. (Special rules apply
for certain former shareholders of the Cardinal Funds and the Pinnacle Fund.
See below.)
The entity through which you are selling your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off for
sale requests. Consult that entity for specific information. If your sell order
has been received by the Funds prior to the time designated by the Funds for
receiving orders on a specific day, you will not receive the dividend declared
for that day.
Systematic Withdrawal Plan
You may make automatic withdrawals on a monthly, quarterly or annual basis on
the last day of that period that the Funds are open for business. Please
contact Fifth Third Securities, Inc. or your financial institution for more
information.
Postponement of Redemption Payments
Any Fund may delay sending to you redemption proceeds for up to 7 days, or
longer if permitted by the SEC. If you experience difficulty making a telephone
redemption during periods of drastic economic or market change, you can send to
the Funds your request by regular mail to: Fifth Third Funds, P.O. Box 5354,
Cincinnati, Ohio 45201-5354, or by express mail to: Fifth Third Funds, 312
Walnut Street, 21st Floor, Cincinnati, Ohio 45202-3874.
- --------------------------------------------------------------------------------
Instructions for Sales by Former Cardinal Fund or The Pinnacle Fund
Shareholders
If you held in your name (rather than through a brokerage account)shares of any
of the Cardinal Funds or The Pinnacle Fund at the time those funds were merged
into one of the Funds, and you continue to hold in your name the shares of the
Fifth Third Fund you received in the merger or by way of a subsequent exchange,
you may sell your Fifth Third Fund shares directly by contacting the Funds
rather than through Fifth Third Securities, Inc. or another financial
institution.
By telephone Call 1-800-282-5706 with
Shares may be instructions as to how you wish to
redeemed in any receive your funds (mail, wire).
amount less than The Funds make every effort to
$50,000 by insure that telephone redemptions
telephone. are only made by authorized
traders. All telephone calls are
recorded for your protection and
you will be asked for information
to verify your identity.
By mail 1. Write a letter of instruction indicating:
. your Fund and account number
. amount you wish to redeem
. address where your check should be sent
. account owner(s) signature
2. Mail to:
Fifth Third Funds
P.O. Box 5354
Cincinnati, Ohio 45201-5354
41
<PAGE>
Shareholder Information
By overnight 1. Write a letter of instruction indicating:
service . your fund and account number
. amount you wish to redeem
. address where you want check to be sent
. account owner(s) signature
2. Send to:
Fifth Third Funds
312 Walnut Street, 21st Floor
Cincinnati, OH 45202-3874
By wire transfer Call 1-800-282-5706 to request a
(Option available wire transfer.
only if
previously set up
on account.) If you call by the time designated
by the Funds, your payment will
normally be wired to your bank on
the next business day.
The Fund charges a wire transfer fee of $8.
Note: Your financial institution
may also charge a separate fee.
Systematic To activate this feature call 1-800-282-5706.
Withdrawal Plan
When Written Redemption Requests are Required
You must request redemptions in writing in the following situations:
1. Redemptions from Individual Retirement Accounts ("IRAs").
2. Redemption requests requiring a signature guarantee, which include each of
the following.
. Redemptions over $50,000
. Your account address has changed within the last 30 days
. The check is not being mailed to the address on your account
. The check is not being made payable to the owner of the account
. The redemption proceeds are being transferred to another Fund account with
a different registration
. The redemption proceeds are being wired to instructions currently not on
your account
Signature guarantees may be obtained from a U.S. stock
exchange member, a U.S. commercial bank or trust
company, or any other financial institution that is a
member of the STAMP (Securities Transfer Agents
Medallion Program), MSP (New York Stock Exchange
Medallion Signature Program) or SEMP (Stock Exchanges
Medallion Program). Members are subject to dollar
limitations, which must be considered when requesting
their guarantee. The Transfer Agent may reject any
signature guarantee if it believes the transaction
would otherwise be improper.
The Trust does not accept signatures guaranteed by a
notary public.
Redemptions Within 15 Days of Initial Investment
When you have made your initial investment by check,
you cannot redeem any portion of it until the Transfer
Agent is satisfied that the check has cleared (which
may require up to 15 business days). You can avoid this
delay by purchasing shares with a certified check, or
by wire.
Closing of Small Accounts
If your account falls below $1,000 because of
redemptions, a Fund may ask you to increase your
balance. If it is still below the minimum after 30
days, the Fund may close your account and send you the
proceeds at the current NAV.
- --------------------------------------------------------------------------------
42
<PAGE>
Shareholder Information
Exchanging Your Shares
You may exchange your Fund shares for the same class of shares of any other
Fifth Third Fund. No transaction fees are charged for exchanges. Be sure to
read the Prospectus carefully of any Fund into which you wish to exchange
shares.
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one Fund to another are taxable for investors
subject to federal or state income taxation. These procedures apply only to
exchanges between existing accounts.
Automatic Exchanges
You can use the Funds' Automatic Exchange feature to purchase shares of the
Funds at regular intervals through regular, automatic redemptions from a Fund.
To participate in the Automatic Exchange Program or to change the Automatic
Exchange instructions on an existing account, contact Fifth Third Securities,
Inc. or your financial institution.
If exchanging shares through Fifth Third Securities, Inc. or your financial
institution, ask it for exchange procedures or call 1-888-799-5353. (Special
rules apply for former shareholders of The Cardinal Group. See below.)
Notes on exchanges
To prevent disruption in the management of the Funds, market timing strategies
and frequent exchange activity may be limited by the Funds. Although not
anticipated, the Funds may reject exchanges, or change or terminate rights to
exchange shares at any time.
When exchanging from a Fund that has no sales charge or a lower sales charge to
a Fund with a higher sales charge, you will pay the difference.
Shares of the new Fund must be held in the same account name, with the same
registration and tax identification numbers, as the shares of the old Fund.
The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time.
The exchange privilege is available only in states where shares of the Funds
may be sold.
All exchanges are based on the relative net asset value next determined after
the exchange order is received by the Funds.
- --------------------------------------------------------------------------------
Instructions for Exchanges by Former Cardinal Funds and The Pinnacle Fund
Shareholders
If you held in your name (rather than through a brokerage account) shares of
any of the Cardinal Funds or The Pinnacle Fund at the time those funds were
merged into one of the Funds, and you continue to hold in your name the shares
of the Fifth Third Fund you received in the merger or by way of a subsequent
exchange, you may exchange your Fifth Third Fund shares for Investment A
shares of any other Fifth Third Fund directly by contacting the Funds rather
than going through Fifth Third Securities, Inc. or another financial
institution.
To make an exchange, send a written request to Fifth Third Funds, P.O. Box
5354, Cincinnati, OH 45201-5354, or by call 1-800-282-5706. Please provide the
following information:
. Your name and telephone number
. The exact name on your account and account number
. Taxpayer identification number (usually your Social Security number)
. Dollar value or number of shares to be exchanged
. The name of the Fund from which the exchange is to be made
. The name of the Fund into which the exchange is being made
Automatic Exchanges
To participate in the Automatic Exchange or to change the Automatic Exchange
instructions on an existing account or to discontinue the feature, write to:
Fifth Third Funds, P.O. Box 5354, Cincinnati, Ohio 45201-5354.
If shares of a Fund are purchased by check, those shares cannot be exchanged
until your check has been collected. This could take 15 days or more.
- --------------------------------------------------------------------------------
43
<PAGE>
Shareholder Information
Distribution This section describes the sales charges and fees you
Arrangements/ will pay as an investor in different share classes
Sales Charges offered by the Funds and ways to qualify for reduced
sales charges.
<TABLE>
<CAPTION>
Investment A Investment C
<S> <C> <C>
Sales Charge (Load) Front-end No front-end
sales charge sales charge.
(not A contingent
applicable to deferred sales
money market charge (CDSC)
funds); will be
reduced sales imposed on
charges shares
available. redeemed
within 12
months after
purchase;
Distribution/Service Subject to Subject to
(12b-1) Fee annual annual
distribution distribution
and and
shareholder shareholder
servicing fees servicing fees
of up to 0.25% of up to 1.00%
of the Fund's of the Fund's
assets. assets.
Fund Expenses Lower annual Higher annual
expenses than expenses than
Investment C Investment A
shares. shares.
</TABLE>
Calculation of
Sales Charges
Investment A Investment A shares are sold at their public offering
Shares price. This price includes the initial sales charge.
Therefore, part of the money you send to the Funds will
be used to pay the sales charge. The remainder is
invested in Fund shares. The sales charge decreases with
larger purchases. There is no sales charge on reinvested
dividends and distributions.
The current sales charge rates are as follows:
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Investment
<S> <C> <C>
Less than $50,000 4.50% 4.71%
---------------------------------------------------------------
$ 50,000 but less than
$100,000 4.00% 4.17%
---------------------------------------------------------------
$100,000 but less than
$150,000 3.00% 3.09%
---------------------------------------------------------------
$150,000 but less than
$250,000 2.00% 2.04%
---------------------------------------------------------------
$250,000 but less than
$500,000 1.00% 1.01%
---------------------------------------------------------------
$500,000 or more 0.00% 0.00%
---------------------------------------------------------------
</TABLE>
44
<PAGE>
Shareholder Information
If you have a Club 53 Account, One Account Advantage or
Platinum One Account through Fifth Third Bank, you are
eligible for the following reduced sales charges:
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Investment
<S> <C> <C>
Less than $50,000 3.97% 4.13%
---------------------------------------------------------------
$ 50,000 but less than
$100,000 3.47% 3.59%
---------------------------------------------------------------
$100,000 but less than
$150,000 2.47% 2.53%
---------------------------------------------------------------
$150,000 but less than
$250,000 1.47% 1.49%
---------------------------------------------------------------
$250,000 but less than
$500,000 0.47% 0.47%
---------------------------------------------------------------
$500,000 and above 0.00% 0.00%
---------------------------------------------------------------
</TABLE>
If you purchase $500,000 or more of Investment A shares
and do not pay a sales charge, and you sell any of those
shares before the first anniversary of purchase, you will
pay a 1% contingent deferred sales charge, or CDSC, in
the portion redeemed at the time of redemption. The CDSC
will be based upon the lowest of the NAV at the time of
purchase and the NAV at the time of redemption. In any
sales, certain shares not subject to the CDSC (i.e.,
shares purchased with reinvested dividends or
distributions) will be redeemed first followed by shares
subject to the lowest CDSC (typically shares held for the
longest time).
Sales Charge You may qualify for reduced sales charges under the
Reductions following circumstances.
. Letter of Intent. You inform the Fund in writing that
you intend to purchase at least $50,000 of Investment A
Shares over a 13-month period to qualify for a reduced
sales charge. You must include up to 4.5% of the total
amount you intend to purchase with your letter of
intent. Shares purchased under the non-binding Letter
of Intent will be held in escrow until the total
investment has been completed. In the event the Letter
of Intent is not completed, sufficient escrowed shares
will be redeemed to pay any applicable front-end sales
charges.
. Rights of Accumulation. When the value of shares you
already own plus the amount you intend to invest
reaches the amount needed to qualify for reduced sales
charges, your added investment will qualify for the
reduced sales charge.
. Combination Privilege. Combine accounts of multiple
Funds (excluding the Money Market Fund) or accounts of
immediate family household members (spouse and children
under 21) to achieve reduced sales charges.
Sales Charge The following transactions qualify for waivers of sales
Waivers charges that apply to Investment A shares:
. Shares purchased by investment representatives through
fee-based investment products or accounts.
. Reinvestment of distributions from a deferred
compensation plan, agency, trust, or custody account
that was maintained by the Advisor or its affiliates or
invested in any Fifth Third Fund.
45
<PAGE>
Shareholder Information
. Shares purchased for trust or other advisory accounts
established with the Advisor or its affiliates.
. Shares purchased by directors, trustees, employees, and
family members of the Advisor and its affiliates and
any organization that provides services to the Funds;
retired Fund trustees; dealers who have an agreement
with the Distributor; and any trade organization to
which the Advisor or the Administrator belongs.
. Shares purchased in connection with 401(k) plans,
403(b) plans and other employer-sponsored qualified
retirement plans, "wrap" type programs non-
transactional fee fund programs, and programs offered
by fee-based financial planners and other types of
financial institutions (including omnibus service
providers).
. Distributions from Qualified Retirement Plans. There
also is no sales charge for Fund shares purchased with
distributions from qualified retirement plans or other
trusts administered by Fifth Third Bank.
Class C shares are offered at NAV, without any up-front
Investment C sales charge. Therefore, all the money you send to the
Shares Funds is used to purchase Fund shares. If you sell your
Investment C shares before the first anniversary of
purchase, however, you will pay a 1% contingent deferred
sales charge or CDSC, at the time of redemption. The CDSC
will be based upon the lower of the NAV at the time of
purchase and the NAV at the time of redemption. In any
sale, certain shares not subject to the CDSC (i.e.,
shares purchased with reinvested dividends or
distributions) will be redeemed first, followed by shares
subject to the lowest CDSC (typically shares held for the
longest time).
Reinstatement If you have sold Investment A or C shares and decide to
Privilege reinvest in the Fund within a 90 day period, you will not
be charged the applicable sales load on amounts up to the
value of the shares you sold. You must provide a written
reinstatement request and payment within 90 days of the
date your instructions to sell were processed.
Distribution/Service 12b-1 fees compensate the Distributor and other dealers
(12b-1) Fees and investment representatives for services and expenses
related to the sale and distribution of the Fund's shares
and/or for providing shareholder services. 12b-1 fees are
paid from Fund assets on an ongoing basis, and will
increase the cost of your investment. 12b-1 fees may cost
you more than paying other types of sales charges.
The 12b-1 fees vary by share class as follows:
. Investment A shares may pay a 12b-1 fee of up to 0.25%
of the average daily net assets of a Fund.
. Investment C shares pay a 12b-1 fee of up to 1.00% of
the average daily net assets of the applicable Fund.
The Distributor may use up to 0.25% of the 12b-1 fee
for shareholder servicing and up to 0.75% for
distribution. This will cause expenses for Investment C
shares to be higher and dividends to be lower than for
Investment A shares. The higher 12b-1 fee on Investment
C shares, together with the CDSC, help the Distributor
sell Investment C shares without an "up-front" sales
charge. In particular, these fees help to defray the
Distributor's costs of advancing brokerage commissions
to investment representatives.
46
<PAGE>
Shareholder Information
Over time shareholders will pay more than the equivalent
of the maximum permitted front-end sales charge because
12b-1 distribution and service fees are paid out of the
Fund's assets on an on-going basis.
Dealers BISYS, the distributor of Fund shares, in its discretion,
Incentives may pay all dealers selling Investment A shares all or a
portion of the sales charges it normally retains.
All dividends and capital gains will be automatically
reinvested unless you request otherwise. You can receive
them in cash or by electronic funds transfer to your bank
account if you are not a participant in an IRA account or
in a tax qualified plan. There are no sales charges for
reinvested distributions. Dividends are higher for
Investment A shares than for Investment C shares, because
Investment A shares have lower operating expenses.
DIVIDENDS AND Distributions are made on a per share basis regardless of
CAPITAL GAINS how long you've owned your shares. Therefore, if you
invest shortly before the distribution date, some of your
investment will be returned to you in the form of a
taxable distribution.
Dividends, if any, are declared and paid monthly by the
following funds: Fifth Third Quality Growth Fund, Fifth
Third Equity Income Fund, Fifth Third Bond Fund for
Income, Fifth Third Quality Bond
Fund, Fifth Third Government Securities Fund, Fifth Third
Municipal Bond Fund and Fifth Third Ohio Tax Free Bond
Fund. Dividends, if any, are declared and paid quarterly
by the following funds: Fifth Third Cardinal Fund, Fifth
Third Pinnacle Fund, Fifth Third Balanced Fund and Fifth
Third Mid Cap Fund. Dividends, if any, are declared and
paid annually by the following Fund: Fifth Third
International Equity Fund. Capital gains, if any, are
distributed at least annually.
TAXATION
Federal Income Tax
Each Fund expects to distribute substantially all of its investment income
(including net capital gains and tax-exempt interest income, if any) to its
shareholders. Unless otherwise exempt or as discussed below, shareholders are
required to pay federal income tax on any dividends and other distributions,
including capital gains distributions received. This applies whether dividends
and other distributions are received in cash or as additional shares.
Distributions representing long-term capital gains, if any, will be taxable to
shareholders as long-term capital gains no matter how long the shareholders
have held the shares. No federal income tax is due on any dividend earned in an
IRA or qualified retirement plan until distributed.
This is a brief summary of certain federal income tax consequences relating to
an investment in the Funds, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under federal, state and
local laws.
47
<PAGE>
Shareholder Information
Additional Tax Information for Fifth Third Ohio Tax Free Bond Fund
Dividends from Fifth Third Ohio Tax Free Bond Fund representing interest from
obligations held by that Fund which are issued by the State of Ohio or its
subdivisions, which interest is exempt from federal income tax when received by
a shareholder, should also be exempt from Ohio individual income tax as well as
any Ohio municipal income tax even if the municipality is permitted under
current Ohio Law to levy a tax on intangible income. Income from the Fund is not
necessarily free from state income taxes in states other than Ohio or from
personal property taxes.
Additional Tax Information for Fifth Third Municipal Bond Fund
Dividends from Fifth Third Municipal Bond Fund representing net interest income
earned on some temporary investments and any realized net short-term gains are
taxed as ordinary income. Distributions representing net long-term capital
gains realized by Fifth Third Municipal Bond Fund, if any, will be taxable as
long-term capital gains regardless of the length of time shareholders have held
their Shares.
Additional Tax Information for Fifth Third Municipal Bond Fund and Fifth Third
Ohio Tax Free Bond Fund
If a shareholder receives an exempt-interest dividend with respect to any share
and such share is held by the shareholder for six months or less, any loss on
the sale or exchange of such share will be disallowed to the extent of the
amount of such exempt-interest dividend. In certain limited instances, the
portion of social security benefits that may be subject to federal income
taxation may be affected by the amount of tax-exempt interest income, include
exempt-interest dividends, received by a shareholder.
Under state or local law, distributions of investment income may be taxable to
shareholders as dividend income even though a substantial portion of such
distribution may be derived from interest excluded from gross income for
federal income tax purposes that, if received directly, would be exempt from
such income taxes. State laws
differ on this issue, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under state and local tax
laws.
Interest income from certain types of municipal securities may be subject to
federal alternative minimum tax. To the extent either Fund invests in those
securities, individual shareholders, depending on their own tax status, may be
subject to alternative minimum tax on that part of the Fund's distributions
derived from those securities.
Additional Tax Information for Fifth Third International Equity Fund
Fifth Third International Equity Fund may invest in the stock of certain
foreign corporations that would constitute a passive foreign investment company
(PFIC). Federal income taxes at ordinary net income rates may be imposed on the
Fund upon disposition of PFIC investments.
Investment income received by the Fund from sources within foreign countries
may be subject to foreign taxes withheld at the source. The United States has
entered into tax treaties with many foreign countries that entitle the Fund to
reduced tax rates or exemption on this income. The effective rate of foreign
tax cannot be predicted since the amount of the Fund assets to be invested
within various countries is unknown. However, the Fund intends to operate so as
to qualify for treaty-reduced tax rates where applicable.
The Fund intends to qualify so as to allow shareholders to claim a foreign tax
credit or deduction on their federal income tax returns. Shareholders, however,
may be limited in their ability to claim a foreign tax credit. Shareholders who
elect to deduct their portion of the Fund's foreign taxes rather than take the
foreign tax credit must itemize deductions on their federal income tax returns.
48
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Ernst & Young LLP, whose report, along with the Funds' financial
statements, are included in the annual report, which is available upon request.
Fifth Third Quality Growth Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------------
1999 1998 1997 1996 1995
Per Share Data -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 20.26 $ 19.23 $ 13.16 $ 11.79 $ 9.70
- --------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income/(loss) (0.06) 0.03 0.08 0.12 0.14
Net realized and unrealized
gains/(losses) from
investments 5.06 2.49 6.75 1.37 2.09
- --------------------------------------------------------------------------------
Total from Investment
Operations 5.00 2.52 6.83 1.49 2.23
- --------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income -- (0.03) (0.09) (0.12) (0.14)
Net realized gains on
vestments (1.95) (1.46) (0.67) -- --
Total Distributions (1.95) (1.49) (0.76) (0.12) (0.14)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 23.31 $ 20.26 $ 19.23 $ 13.16 $ 11.79
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Return (excludes sales
charge) 26.48% 14.12% 54.02% 12.69% 23.21%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.21% 1.00% 1.00% 0.99% 1.00%
Net investment income/(loss) (0.29%) 0.10% 0.45% 0.98% 1.44%
Expense
waiver/reimbursement(b) 0.08% 0.37% 0.36% 0.03% 0.05%
- --------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period
(000s) $116,963 $520,068 $399,683 $134,469 $82,594
Portfolio turnover(c) 34% 45% 37% 37% 34%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
Financial Highlights
Fifth Third Quality Growth Fund
Investment C Shares
<TABLE>
<CAPTION>
Year Ended July 31, Period Ended
------------------------ July 31,
1999 1998 1997 1996*
Per Share Data ------ ------ ------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $20.10 $19.18 $13.16 $13.37
- ------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (0.18) (0.07) (0.03) --
Net realized and unrealized
gains/(losses) from investments 5.00 2.45 6.72 (0.21)
Total from Investment Operations 4.82 2.38 6.69 (0.21)
- ------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -- -- -- --
Net realized gain on investment (1.95) (1.46) (0.67) --
Total Distributions (1.95) (1.46) (0.67) --
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $22.97 $20.10 $19.18 $13.16
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Return (excludes sales charge) 25.76 % 13.41 % 52.79 % 12.50%(d)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.80 % 1.63 % 1.75 % 1.77%(a)
Net investment income/(loss) (0.89)% (0.54)% (0.32)% 0.26%(a)
Expense waiver/reimbursement(b) 0.30 % 0.39 % 0.26 % 0.06%(a)
- ------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $9,775 $8,357 $3,146 $ 420
Portfolio turnover(c) 34 % 45 % 37 % 37%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Annualized.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for the Investment C shares
for the period from April 25, 1996 to July 31, 1996.
50
<PAGE>
Financial Highlights
Fifth Third Equity Income Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July
31, Period ended
----------------- July 31,
1999 1998 1997*
Per Share Data ------- -------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.38 $ 14.44 $ 12.00
- -------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) 0.29 0.26 0.15
Net realized and unrealized gains from
investments 1.19 2.43 2.43
- -------------------------------------------------------------------------
Total from Investment Operations 1.48 2.69 2.58
- -------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.23) (0.27) (0.14)
In excess of net investment income -- -- --
Net realized gain on investments (1.45) (1.48) --
- -------------------------------------------------------------------------
Total Distributions (1.68) (1.75) (0.14)
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.18 $ 15.38 $ 14.44
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Total Return (excludes sales charge) 9.90% 19.57% 21.64%(a)
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.27% 1.01% 1.06%(b)
Net investment income 1.58% 1.73% 2.32%(b)
Expense waiver/reimbursement(c) 0.10% 0.43% 0.42%(b)
- -------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $20,268 $150,404 $120,324
Portfolio turnover(d) 69% 41% 28%
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
</TABLE>
51
<PAGE>
Financial Highlights
Fifth Third Equity Income Fund
Investment C Shares
<TABLE>
<CAPTION>
Year Ended
July 31, Period ended
-------------- July 31,
1999 1998 1997*
Per Share Data ------ ------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $15.39 $14.45 $12.00
- ------------------------------------------------------------------------------
Income from Investment Operations
Net investment income 0.14 0.17 0.10
Net realized and unrealized gains/(losses) from
investments 1.26 2.41 2.45
Total from Investment Operations 1.40 2.58 2.55
- ------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.15) (0.16) (0.10)
In excess of net investment income -- -- --
Net realized gain on investments (1.45) (1.48) --
- ------------------------------------------------------------------------------
Total Distributions (1.60) (1.64) (0.10)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $15.19 $15.39 $14.45
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Return (excludes sales charge) 9.34% 18.72% 21.30%(a)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.83% 1.57% 1.81%(b)
Net investment income 0.88% 1.21% 1.56%(b)
Expense waiver/reimbursement(c) 0.30% 0.52% 0.26%(b)
- ------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $1,433 $ 968 $ 92
Portfolio turnover(d) 69% 41% 28%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
52
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund***
Investment A Shares
<TABLE>
<CAPTION>
Period ended Year Ended September 30,
July 31, --------------------------------------
1999* 1998 1997 1996 1995
Per Share Data ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 14.87 $ 16.65 $ 13.13 $ 13.23 $ 12.73
- ---------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income (0.01) 0.14 0.14 0.25 0.36
Net realized and
unrealized
gains/(losses) from
investments 5.08 0.27 4.64 1.95 1.32
Total from Investment
Operations 5.07 0.41 4.78 2.20 1.68
- ---------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income (0.01) (0.14) (0.13) (0.26) (0.35)
In excess of net
investment income -- (0.04) -- -- --
Net realized gains (0.55) (2.01) (1.13) (2.04) (0.83)
- ---------------------------------------------------------------------------------
Total Distributions (0.56) (2.19) (1.26) (2.30) (1.18)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 19.38 $ 14.87 $ 16.65 $ 13.13 $ 13.23
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Total Return (excludes
sales charge) 34.60% (a) 2.50% 39.17% 17.96% 14.84%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net
Assets:
Expenses 1.04% (b) 0.92% 1.06% 0.75% 0.70%
Net investment
income/(loss) (0.07%)(b) 0.76% 0.97% 1.90% 2.89%
Expense
waiver/reimbursement(c) 0.07% (b) 0.09% 0.06% 0.10% 0.00%
- ---------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of
period (000s) $243,790 $232,903 $267,908 $229,042 $226,181
Portfolio turnover(d) 15% 15% 13% 58% 20%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund***
Investment C Shares
<TABLE>
<CAPTION>
Period ended
July 31,
1999**
Per Share Data ------------
<S> <C>
Net Asset Value, Beginning of Period $15.63
- ---------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (0.05)
Net realized and unrealized gains/(losses) from investments 4.19
Total from Investment Operations 4.14
- ---------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income --
In excess of net investment income --
Net realized gains (0.55)
- ---------------------------------------------------------------------------
Total Distributions (0.55)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Net Asset Value, End of Period $19.22
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Total Return (excludes sales charge) 26.99% (a)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.65% (b)
Net investment income/(loss) (0.66%)(b)
Expense waiver/reimbursement(c) 0.24% (b)
- ---------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 839
Portfolio turnover(d) 15%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Reflects operations for the period from October 22, 1998 (date of
commencement of operations) to July 31, 1999.
*** Information prior to September 21, 1998 is for the Cardinal Fund, the
predecessor of the Fifth Third Cardinal Fund.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
54
<PAGE>
Financial Highlights
Fifth Third Pinnacle Fund*
Investment A Shares
<TABLE>
<CAPTION>
Year ended Period ended Year Ended December 31,
July 31, July 31, ----------------------------------
1999 1998** 1997 1996 1995 1994
Per Share Data ---------- ------------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 32.35 $ 27.71 $ 23.96 $ 22.47 $ 18.83 $ 21.15
- ------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment
income/(loss) (0.09) (0.02) 0.13 0.05 0.11 0.09
Net realized and
unrealized gain from
investments 5.57 5.13 8.25 5.04 6.54 (0.34)
- ------------------------------------------------------------------------------------------
Total from Investment
Operations 5.48 5.11 8.38 5.09 6.65 (0.25)
- ------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income -- -- (0.13) (0.05) (0.11) (0.09)
Net realized gain on
investments (0.63) (0.47) (4.50) (3.55) (2.90) (1.98)
Total Distributions (0.63) (0.47) (4.63) (3.60) (3.01) (2.07)
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 37.20 $ 32.35 $ 27.71 $ 23.96 $ 22.47 $ 18.83
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
Total Return (excludes
sales charge) 17.18% 18.58% (a) 35.40% 22.50% 35.40% (1.10%)
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C> <C>
Ratios to Average Net
Assets:
Expenses 1.41% 1.28% (b) 1.12% 1.16% 1.14% 1.15%
Net investment
income/(loss) (0.47%) (0.12%)(b) 0.46% 0.18% 0.44% 0.41%
Expense
waiver/reimbursement(c) 0.02% 0.30% (b) 0.00% 0.00% 0.00% 0.00%
- ------------------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of
period (000s) $49,936 $35,549 $22,272 $16,461 $14,673 $13,014
Portfolio turnover(d) 51% 38% 50% 44% 68% 91%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
Financial Highlights
Fifth Third Pinnacle Fund*
Investment C Shares
<TABLE>
<CAPTION>
Year ended Period ended
July 31, July 31,
1999 1998***
Per Share Data ---------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period $32.28 $30.16
- ----------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (0.23) (0.04)
Net realized and unrealized gain from investments 5.50 2.16
- ----------------------------------------------------------------------------
Total from Investment Operations 5.27 2.12
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -- --
Net realized gain on investments (0.63) --
- ----------------------------------------------------------------------------
Total Distributions (0.63) --
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net Asset Value, End of Period $36.92 $32.28
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Return (excludes sales charge) 16.56% 7.07% (a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C>
Ratios to Average Net Assets:
Expenses 1.95% 2.17% (b)
Net investment income/(loss) (1.00%) (0.84%)(b)
Expense waiver/reimbursement(c) 0.26% 0.42% (b)
- ----------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $6,653 $ 922
Portfolio turnover(d) 51% 38%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Information prior to the period March 9, 1998 is for the Pinnacle Fund, the
predecessor Fund of the Fifth Third Pinnacle Fund.
** Reflects the period of operations from January 1, 1998 to July 31, 1998.
*** Reflects the period of operations for the period March 9, 1998 (date of
commencement of operations) to July 31, 1998.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
56
<PAGE>
Financial Highlights
Fifth Third Balanced Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
---------------------------------------------
1999 1998 1997 1996 1995
Per Share Data ------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 14.99 $ 15.33 $ 11.75 $ 11.28 $ 9.70
- --------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income 0.20 0.27 0.27 0.27 0.28
Net realized and unrealized
from investments 1.86 0.92 4.06 0.47 1.57
- --------------------------------------------------------------------------------
Total from Investment Operations 2.06 1.19 4.33 0.74 1.85
- --------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income (0.19) (0.28) (0.26) (0.27) (0.27)
Net realized gain on
investments (0.74) (1.25) (0.49) -- --
- --------------------------------------------------------------------------------
Total Distributions (0.93) (1.53) (0.75) (0.27) (0.27)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 16.12 $ 14.99 $ 15.33 $ 11.75 $ 11.28
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Return (excludes sales
charge) 14.30% 8.41% 38.45% 6.52% 19.37%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.28% 1.00% 1.00% 1.00% 1.00%
Net investment income/(loss) 1.22% 1.84% 2.05% 2.31% 2.73%
Expense waiver/reimbursement(b) 0.06% 0.43% 0.40% 0.06% 0.06%
- --------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period
(000s) $79,686 $173,177 $122,765 $92,808 $58,075
Portfolio turnover(c) 128% 135% 101% 61% 58%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
Financial Highlights
Fifth Third Balanced Fund
Investment C Shares
<TABLE>
<CAPTION>
Year ended July 31, Period ended
---------------------- July 31,
1999 1998 1997 1996*
Per Share Data ------ ------ ------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.01 $15.34 $11.75 $12.13
- ---------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.11 0.17 0.16 0.05
Net realized and unrealized from
investments 1.88 0.92 4.08 (0.39)
- ---------------------------------------------------------------------------
Total from Investment Operations 1.99 1.09 4.24 (0.34)
- ---------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.13) (0.17) (0.16) (0.04)
Net realized gain on investments (0.74) (1.25) (0.49) --
- ---------------------------------------------------------------------------
Total Distributions (0.87) (1.42) (0.65) (0.04)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Net Asset Value, End of Period $16.13 $15.01 $15.34 $11.75
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Total Return (excludes sales charge) 13.78% 7.67% 37.52% 6.32%(d)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.76% 1.58% 1.75% 1.78%(a)
Net investment income/(loss) 0.78% 1.24% 1.30% 1.60%(a)
Expense waiver/reimbursement(b) 0.29% 0.49% 0.30% 0.07%(a)
- ---------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $6,692 $4,796 $1,155 $ 264
Portfolio turnover(c) 128% 135% 101% 61%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Annualized.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for Investment C shares for
the period from April 25, 1996 to July 31, 1996.
58
<PAGE>
Financial Highlights
Fifth Third Mid Cap Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
-----------------------------------------------
1999 1998 1997 1996 1995
Per Share Data ------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 16.19 $ 16.98 $ 12.60 $ 12.59 $ 10.10
- -------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income/(loss) (0.10) (0.03) 0.02 0.06 0.08
Net realized and unrealized
gains/(losses) from
investments 1.17 0.98 5.55 0.11 2.48
- -------------------------------------------------------------------------------
Total from Investment
Operations 1.07 0.95 5.57 0.17 2.56
- -------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income -- -- (0.02) (0.07) (0.07)
In excess of net investment
income -- -- (0.02) -- --
Net realized gains (1.44) (1.74) (1.15) (0.09) --
- -------------------------------------------------------------------------------
Total Distributions (1.44) (1.74) (1.19) (0.16) (0.07)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 15.82 $ 16.19 $ 16.98 $ 12.60 $ 12.59
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Return (excludes sales
charge) 7.29% 5.69% 47.17% 1.27% 25.45%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.28% 1.01% 1.00% 1.00% 1.00%
Net investment income/(loss) (0.59%) (0.19%) 0.10% 0.42% 0.77%
Expense
waiver/reimbursement(b) 0.11% 0.40% 0.37% 0.06% 0.18%
- -------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period
(000s) $27,966 $217,547 $186,066 $72,663 $47,184
Portfolio turnover(c) 49% 44% 52% 54% 23%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
Financial Highlights
Fifth Third Mid Cap Fund
Investment C Shares
<TABLE>
<CAPTION>
Year ended July 31, Period ended
------------------------ July 31,
1999 1998 1997 1996*
Per Share Data ------ ------ ------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.98 $16.88 $12.59 $13.72
- -------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (0.18) (0.05) (0.07) (0.01)
Net realized and unrealized
gains/(losses) from investments 1.16 0.89 5.51 (1.12)
- -------------------------------------------------------------------------------
Total from Investment Operations 0.98 0.84 5.44 (1.13)
- -------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -- -- -- --
In excess of net investment income -- -- -- --
Net realized gain on investment (1.44) (1.74) (1.15) --
- -------------------------------------------------------------------------------
Total Distributions (1.44) (1.74) (1.15) --
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net Asset Value, End of Period $15.52 $15.98 $16.88 $12.59
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Return (excludes sales charge) 6.79% 5.03% 46.05% 1.11% (d)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.85% 1.61% 1.75% 1.78% (a)
Net investment income/(loss) (1.07%) (0.81%) (0.62%) (0.51%)(a)
Expense waiver/reimbursement(b) 0.32% 0.44% 0.27% 0.06% (a)
- -------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 794 $1,049 $ 439 $ 229
Portfolio turnover(c) 49% 44% 52% 54%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 24, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Annualized.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents total return for Investment A shares for the period from August
1, 1995 to April 23, 1996 plus the total return for Investment C shares for
the period from April 24, 1996 to July 31, 1996.
60
<PAGE>
Financial Highlights
Fifth Third International Equity Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31, Period ended
------------------------------------ July 31,
1999 1998 1997 1996 1995*
Per Share Data ------ -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.56 $ 12.05 $ 10.74 $ 9.83 $ 10.00
- ------------------------------------------------------------------------------
Income from Investment
Operations
Net investment
income/(loss) 0.03 0.09 0.04 0.01 0.05
Net realized and
unrealized
gains/(losses) from
investments 0.49 1.31 2.15 0.90 (0.22)
- ------------------------------------------------------------------------------
Total from Investment
Operations 0.52 1.40 2.19 0.91 (0.17)
- ------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income (0.08) (0.59) (0.66) -- --
In excess of net
investment income (0.09) -- (0.16) -- --
Net realized gains (0.07) (0.30) (0.06) -- --
- ------------------------------------------------------------------------------
Total Distributions (0.24) (0.89) (0.88) -- --
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Asset Value, End of
Period $12.84 $ 12.56 $ 12.05 $ 10.74 $ 9.83
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Return (excludes
sales charge) 4.23% 13.29% 21.78% 9.26% (1.70%)(a)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net
Assets:
Expenses 1.52% 1.47% 1.38% 1.61% 1.65% (b)
Net investment
income/(loss) 0.03% 0.66% 0.39% 0.32% 0.62% (b)
Expense
waiver/reimbursement(c) 0.18% 0.35% 0.35% 0.05% 0.07% (b)
- ------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of
period (000s) $5,821 $163,297 $151,728 $120,349 $86,442
Portfolio turnover(d) 42% 39% 60% 41% 54%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
61
<PAGE>
Financial Highlights
Fifth Third International Equity Fund
Investment C Shares
<TABLE>
<CAPTION>
Year ended July 31, Period ended
------------------------ July 31,
1999 1998 1997 1996**
Per Share Data ------ ------ ------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.51 $12.01 $10.71 $11.21
- ------------------------------------------------------------------------------
Income from Investment Operations
Net investment income/(loss) -- (0.06) (0.02) 0.01
Net realized and unrealized gains/
(losses) from investments 0.46 1.39 2.16 (0.51)
- ------------------------------------------------------------------------------
Total from Investment Operations 0.46 1.33 2.14 (0.50)
- ------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.14) (0.53) (0.46) --
In excess of net investment income -- -- (0.32) --
Net realized gains (0.07) (0.30) (0.06) --
- ------------------------------------------------------------------------------
Total Distributions (0.21) (0.83) (0.84) --
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $12.76 $12.51 $12.01 $10.71
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Return (excludes sales charge) 3.79% 12.57% 21.25% 8.95%(a)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 2.25% 2.22% 2.13% 2.34%(b)
Net investment income/(loss) (0.08%) (0.09%) (0.28%) 0.76%(b)
Expense waiver/reimbursement(c) 0.25% 0.25% 0.25% 0.00%(b)
- ------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 235 $ 291 $ 210 $ 57
Portfolio turnover(d) 42% 39% 60% 41%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 19, 1994 (date of
commencement of operations) to July 31, 1995.
** Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
62
<PAGE>
Financial Highlights
Fifth Third Bond Fund For Income
Investment A Shares
<TABLE>
<CAPTION>
Year ended July
31, Period ended
----------------- July 31,
1999 1998 1997*
Per Share Data ------- -------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.19 $ 12.19 $ 12.00
- -----------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) 0.71 0.68 0.37
Net realized and unrealized gains/(losses)
from investments (0.41) 0.06 0.18
- -----------------------------------------------------------------------------
Total from Investment Operations 0.30 0.74 0.55
- -----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.59) (0.69) (0.36)
In excess from net investments -- -- --
Net realized gains (0.21) (0.05) --
- -----------------------------------------------------------------------------
Total Distributions (0.80) (0.74) (0.36)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.69 $ 12.19 $ 12.19
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Total Return (excludes sales charge) 2.42% 6.23% 4.64%(a)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 0.97% 0.75% 0.79%(b)
Net investment income/(loss) 4.80% 5.54% 6.08%(b)
Expense waiver/reimbursement(c) 0.05% 0.42% 0.42%(b)
- -----------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $40,508 $188,071 $157,108
Portfolio turnover(d) 104% 127% 157%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
63
<PAGE>
Financial Highlights
Fifth Third Bond Fund For Income
Investment C Shares
<TABLE>
<CAPTION>
Year ended
July 31, Period ended
-------------- July 31,
1999 1998** 1997*
Per Share Data ------ ------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $12.19 $12.18 $12.00
- ------------------------------------------------------------------------------
Income from Investment Operations
Net investment income/(loss) 0.53 0.60 (0.01)
Net realized and unrealized gains/(losses) from
investments (0.29) 0.05 0.50
- ------------------------------------------------------------------------------
Total from Investment Operations 0.24 0.65 0.49
- ------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.53) (0.59) (0.22)
In excess of net investment income -- -- (0.09)
Net realized gains (0.21) (0.05) --
- ------------------------------------------------------------------------------
Total Distributions (0.74) (0.64) (0.31)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $11.69 $12.19 $12.18
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Return (excludes sales charge) 1.92% 5.50% 4.18%(a)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.54% 1.34% 1.54%(b)
Net investment income/(loss) 3.40% 4.89% 4.20%(b)
Expense waiver/reimbursement(c) 0.28% 0.32% 0.26%(b)
- ------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 567 $ 230 $ 6
Portfolio turnover(d) 104% 127% 157%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
** Per share information is calculated using the average share method.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
64
<PAGE>
Financial Highlights
Fifth Third Quality Bond Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
-------------------------------------------
1999 1998 1997 1996 1995
Per Share Data ------ -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 9.96 $ 9.85 $ 9.52 $ 9.72 $ 9.55
- ------------------------------------------------------------------------------
Investment Operations
Net investment income/(loss) 0.65 0.54 0.55 0.56 0.64
Net realized and unrealized
gains/(losses) from investments (0.51) 0.12 0.32 (0.19) 0.17
- ------------------------------------------------------------------------------
Total from Investment Operations 0.14 0.66 0.87 0.37 0.81
- ------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income (0.47) (0.55) (0.54) (0.57) (0.64)
In excess of net investment
income -- -- -- -- --
Net realized gains (0.11) -- -- -- --
- ------------------------------------------------------------------------------
Total Distributions (0.58) (0.55) (0.54) (0.57) (0.64)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.52 $ 9.96 $ 9.85 $ 9.52 $ 9.72
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Total Return (excludes sales
charge) 1.26% 6.91% 9.43% 3.86% 8.89%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 0.92% 0.75% 0.75% 0.75% 0.75%
Net investment income/(loss) 4.85% 5.50% 5.71% 5.80% 6.72%
Expense waiver/reimbursement(b) 0.17% 0.45% 0.41% 0.06% 0.09%
- ------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period
(000s) $9,826 $107,794 $91,789 $83,422 $55,767
Portfolio turnover(c) 349% 279% 181% 117% 138%
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
65
<PAGE>
Financial Highlights
Fifth Third Quality Bond Fund
Investment C Shares
<TABLE>
<CAPTION>
Year ended July
31, Period ended
------------------- July 31,
1999 1998 1997 1996*
Per Share Data ----- ----- ----- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.95 $9.86 $9.53 $9.62
- -----------------------------------------------------------------------------
Income from Investment Operations
Net investment income/(loss) 0.43 0.48 0.49 0.14
Net realized and unrealized gains/(losses)
from investments (0.33) 0.09 0.32 (0.08)
- -----------------------------------------------------------------------------
Total from Investment Operations 0.10 0.57 0.81 0.06
- -----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.43) (0.48) (0.48) (0.15)
In excess of net investment income -- -- -- --
Net realized gains (0.11) -- -- --
- -----------------------------------------------------------------------------
Total Distributions (0.54) (0.48) (0.48) (0.15)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Net Asset Value, End of Period $9.51 $9.95 $9.86 $9.53
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Total Return (excludes sales charge) 0.75% 5.92% 8.68% 3.71%(d)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.43% 1.50% 1.50% 1.52%(a)
Net investment income/(loss) 4.23% 4.76% 4.97% 5.03%(a)
Expense waiver/reimbursement(b) 0.36% 0.35% 0.31% 0.09%(a)
- -----------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 811 $ 399 $ 204 $ 162
Portfolio turnover(c) 349% 279% 181% 117%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Annualized.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for the Investment C shares
for the period from April 25, 1996 to July 31, 1996.
66
<PAGE>
Financial Highlights
Fifth Third U.S. Government Securities Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------
1999 1998 1997 1996 1995
Per Share Data ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 9.82 $ 9.75 $ 9.55 $ 9.77 $ 9.64
- --------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) 0.55 0.52 0.54 0.55 0.58
Net realized and unrealized
gains/(losses) from investments (0.26) 0.07 0.19 (0.20) 0.13
- --------------------------------------------------------------------------------
Total from Investment Operations 0.29 0.59 0.73 0.35 0.71
- --------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.47) (0.52) (0.53) (0.57) (0.58)
- --------------------------------------------------------------------------------
Total Distributions (0.47) (0.52) (0.53) (0.57) (0.58)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.64 $ 9.82 $ 9.75 $ 9.55 $ 9.77
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Return (excludes sales
charge) 2.89% 6.17% 7.83% 3.63% 7.66%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 0.95% 0.75% 0.75% 0.75% 0.75%
Net investment income/(loss) 4.62% 5.30% 5.56% 5.67% 5.98%
Expense waiver/reimbursement(b) 0.33% 0.53% 0.50% 0.29% 0.39%
- --------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $5,192 $41,550 $42,414 $30,754 $25,054
Portfolio turnover(c) 93% 155% 169% 103% 115%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
67
<PAGE>
Financial Highlights
Fifth Third U.S. Government Securities Fund
Investment C Shares
<TABLE>
<CAPTION>
Year Ended July
31, Period ended
------------------- July 31,
1999 1998 1997 1996*
Per Share Data ----- ----- ----- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.80 $9.75 $9.56 $9.65
- -----------------------------------------------------------------------------
Income from Investment Operations
Net investment income/(loss) 0.41 0.46 0.46 0.16
Net realized and unrealized gains/(losses)
from investments (0.18) 0.04 0.19 (0.10)
- -----------------------------------------------------------------------------
Total from Investment Operations 0.23 0.50 0.65 0.06
- -----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.42) (0.45) (0.46) (0.15)
- -----------------------------------------------------------------------------
Total Distributions (0.42) (0.45) (0.46) (0.15)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Net Asset Value, End of Period $9.61 $9.80 $9.75 $9.56
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Total Return (excludes sales charge) 2.31% 5.19% 6.92% 3.48%(d)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.40% 1.50% 1.50% 1.52%(a)
Net investment income/(loss) 4.20% 4.56% 4.82% 4.80%(a)
Expense waiver/reimbursement(b) 0.54% 0.43% 0.40% 0.37%(a)
- -----------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 431 $ 118 $ 75 $ 49
Portfolio turnover(c) 93% 155% 169% 103%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 24, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Annualized.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents total return for Investment A shares for the period from August
1, 1995 to April 23, 1996 plus the total return for Investment C shares for
the period from April 24, 1996 to July 31, 1996.
68
<PAGE>
Financial Highlights
Fifth Third Municipal Bond Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31, Period ended
-------------------- July 31,
1999 1998 1997*
Per Share Data --------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.24 $ 12.33 $ 12.00
- -------------------------------------------------------------------------------
Income from Investment Operations
Net investment income/(loss) 0.45 0.50 0.28
Net realized and unrealized
gains/(losses) from investments (0.25) 0.01 0.32
- -------------------------------------------------------------------------------
Total from Investment Operations 0.20 0.51 0.60
- -------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.44) (0.51) (0.27)
In excess of net investment income/(loss) -- -- --
Net realized gains (0.21) (0.09) --
- -------------------------------------------------------------------------------
Total Distributions (0.65) (0.60) (0.27)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.79 $ 12.24 $ 12.33
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Return (excludes sales charge) 1.56% 4.28% 5.04%(a)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 0.81% 0.76% 0.81%(b)
Net investment income/(loss) 3.99% 4.09% 4.44%(b)
Expense waiver/reimbursement(c) 0.31% 0.45% 0.42%(b)
- -------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 386 $ 117,333 $101,616
Portfolio turnover(d) 110% 121% 63%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
69
<PAGE>
Financial Highlights
Fifth Third Municipal Bond Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
Year ended July 31,
July 31, -----------------
1999*** 1998** 1997*
Per Share Data ---------- ------ ------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $-- $12.33 $12.00
- ----------------------------------------------------------------------------
Investment Operations
Net investment income/(loss) 0.18 (0.20)
Net realized and unrealized gains/(losses)
from investments -- 0.07 0.75
- ----------------------------------------------------------------------------
Total from Investment Operations -- 0.25 0.55
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.18) (0.16)
In excess of net investment income -- -- (0.06)
Net realized gains (0.09) --
- ----------------------------------------------------------------------------
Total Distributions -- (0.27) (0.22)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net Asset Value, End of Period -- $12.31 $12.33
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Return (excludes sales charge) N/A 2.03%(a) 4.65%(a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses N/A 1.51%(b) 1.56%(b)
Net investment income/(loss) N/A 3.41%(b) 3.09%(b)
Expense waiver/reimbursement(c) N/A 0.37%(b) 0.26%(b)
- ----------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $-- $ -- $ 11
Portfolio turnover(d) 110% 121% 63%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
** Reflects operations for the period from August 1, 1997 (date of
commencement of operations) to January 8, 1998. As of July 31, 1998, no
shares or assets existed in the Investment C Shares. The ending net asset
value is the last NAV for a share redeemed on January 8, 1998. Per share
information information is calculated using the average share method for
Investment C Shares.
*** As of July 31, 1999, no shares or assets existed in the Investment C
Shares. The Municipal Bond Investment C Shares continue to be open for
investment with an offering price equal to the Municpal Bond Fund
Investment A Shares.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
70
<PAGE>
Financial Highlights
Fifth Third Ohio Tax Free Bond Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
---------------------------------------------
1999 1998 1997 1996 1995
Per Share Data ------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 10.29 $ 10.31 $ 10.01 $ 9.99 $ 9.75
- -------------------------------------------------------------------------------
Income from Investment
Operations
Net investment income 0.46 0.42 0.43 0.40 0.42
Net realized and unrealized
gains/(losses) from
investments (0.29) 0.02 0.30 0.03 0.24
- -------------------------------------------------------------------------------
Total from Investment
Operations 0.17 0.44 0.73 0.43 0.66
- -------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income (0.38) (0.42) (0.43) (0.41) (0.42)
In excess of net investment
income -- -- -- -- --
Net realized gains (0.06) (0.04) -- -- --
- -------------------------------------------------------------------------------
Total Distributions (0.44) (0.46) (0.43) (0.41) (0.42)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.02 $ 10.29 $ 10.31 $ 10.01 $ 9.99
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Return (excludes sales
charge) 1.63% 4.38% 7.49% 4.33% 7.02%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.00% 0.74% 0.75% 0.74% 0.35%
Net investment income/(loss) 3.68% 4.09% 4.27% 4.01% 4.36%
Expense waiver/reimbursement(b) 0.21% 0.43% 0.37% 0.32% 0.77%
- -------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period
(000s) $22,008 $188,966 $168,800 $35,463 $28,315
Portfolio turnover(c) 47% 42% 49% 30% 27%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
71
<PAGE>
Financial Highlights
Fifth Third Ohio Tax Free Bond Fund
Investment C Shares
<TABLE>
<CAPTION>
Year Ended July 31, Period ended
---------------------- July 31,
1999 1998 1997 1996*
Per Share Data ------ ------ ------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.28 $10.31 $10.00 $10.02
- ---------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.33 0.35 0.36 0.10
Net realized and unrealized
gains/(losses) from investments (0.21) 0.01 0.31 (0.01)
- ---------------------------------------------------------------------------
Total from Investment Operations 0.12 0.36 0.67 0.09
- ---------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.33) (0.35) (0.35) (0.11)
In excess of net investment income -- -- (0.01) --
Net realized gains (0.06) (0.04) -- --
- ---------------------------------------------------------------------------
Total Distributions (0.39) (0.39) (0.36) (0.11)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Net Asset Value, End of Period $10.01 $10.28 $10.31 $10.00
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Total Return (excludes sales charge) 1.13% 3.56% 6.84% 3.98%(d)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.55% 1.49% 1.50% 1.52%(a)
Net investment income/(loss) 3.05% 3.33% 3.51% 3.41%(a)
Expense waiver/reimbursement(b) 0.38% 0.33% 0.27% 0.28%(a)
- ---------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $1,071 $ 584 $ 248 $ 38
Portfolio turnover(c) 47% 42% 49% 30%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 24, 1996 (date of commencement
of operations) to July 31, 1999.
(a) Annualized.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for Investment C shares for
the period from April 24, 1996 to July 31, 1996.
72
<PAGE>
Addresses
- --------------------------------------------------------------------------------
Fifth Third Quality Growth Fund Fifth Third Funds
Fifth Third Equity Income Fund c/o Fifth Third Bank
Fifth Third Cardinal Fund 38 Fountain Square Plaza
Fifth Third Pinnacle Fund Cincinnati, Ohio 45263
Fifth Third Balanced Fund
Fifth Third Mid Cap Fund
Fifth Third International Equity Fund
Fifth Third Bond Fund For Income
Fifth Third Quality Bond Fund
Fifth Third U.S. Government Securities Fund
Fifth Third Municipal Bond Fund
Fifth Third Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
Investment Advisor Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Investment Advisor (Pinnacle Fund only) Heartland Capital Management,
Inc.
251 North Illinois Street,
Suite 300
Indianapolis, Indiana 46204
- --------------------------------------------------------------------------------
Sub-Advisor (International Equity Fund only) Morgan Stanley Asset
Management, Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------------------------------
Custodian, Transfer Agent, Dividend
Disbursing Agent, and Sub-Administrator Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Distributor and Administrator BISYS Fund Services, L.P.
3435 Stelzer Road
Columbus, Ohio 43219
- --------------------------------------------------------------------------------
Independent Auditors Ernst & Young LLP
1300 Chiquita Center
250 East Fifth Street
Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
<PAGE>
The following additional information is available to you upon request and
without charge.
Annual/Semiannual Reports (Reports):
The Funds' annual and semi-annual reports to shareholders contain additional
information on the Funds' investments.
Statement of Additional Information (SAI): The SAI provides more detailed
information about the Funds, including their operations and investment policies.
It is incorporated by reference and is legally considered a part of this
prospectus.
- --------------------------------------------------------------------------------
You can get free copies of Annual and Semi-Annual Reports, the SAI, prospectus
of other Fifth Third Funds, or request other information and discuss your
questions about the Funds by contacting a broker or other financial institution
that sells the Funds. In addition, you may contact the Funds at:
Fifth Third Funds
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Telephone: 1-888-799-5353
Internet: http://www.53.com*
-----------------
- --------------------------------------------------------------------------------
*The Funds' website is not part of this Prospectus.
You can review the Annual and Semi-Annual Reports and the SAI at the Public
Reference Room of the Securities and Exchange Commission. You can get copies:
. For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
. At no charge from the Commission's Website at http://www.sec.gov.
[LOGO]Fifth Third Funds
Investment Company file no. 811-5669
<PAGE>
[LOGO]
Fifth Third Funds
[PICTURE]
Fifth Third Funds
Stock and Bond Mutual Funds
Institutional Shares
Working hard to build your wealth
QUALITY GROWTH FUND
EQUITY INCOME FUND
CARDINAL FUND
PINNACLE FUND
BALANCED FUND
MID CAP FUND
INTERNATIONAL EQUITY FUND
BOND FUND FOR INCOME
QUALITY BOND FUND
U.S. GOVERNMENT SECURITIES FUNDS
MUNICIPAL BOND FUND
OHIO TAX FREE BOND FUND
=================
Prospectus
November 30, 1999
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
<PAGE>
Fifth Third Funds Table of Contents
Objectives, Strategies and Risks
- --------------------------------------------------------------------------------
3 Overview
4 Stock Funds
18 Bond Funds
Shareholder Fees and Fund Expenses
- --------------------------------------------------------------------------------
28 Fee Tables
30 Expense Examples
Additional Information About the Funds'
Investments
- --------------------------------------------------------------------------------
31
Fund Management
- --------------------------------------------------------------------------------
33 Investment Advisors and Subadvisor
33 Portfolio Managers
34 Fund Administration
Shareholder Information
- --------------------------------------------------------------------------------
35 Purchasing and Selling Fund Shares
35 Purchasing and Adding to Your Shares
36 Selling Your Shares
37 Exchanging Your Shares
37 Dividends and Capital Gains
38 Taxation
Financial Highlights
- --------------------------------------------------------------------------------
40
Back Cover
- --------------------------------------------------------------------------------
Where to learn more about Fifth Third Funds
2
<PAGE>
Objectives, Strategies and Risks
Overview
This section provides important information about each of the stock and bond
funds (the "Funds"), each a separate series of Fifth Third Funds, including:
. the investment objective
. principal investment strategies
. principal risks, and
. volatility and performance information
All Funds except Fifth Third Pinnacle Fund are managed by Fifth Third Bank.
Fifth Third Pinnacle Fund is managed by Heartland Capital Management, Inc.
("Heartland"). Morgan Stanley Asset Management, Inc. ("MSAM") acts as
investment subadvisor to Fifth Third International Fund.
Like all mutual funds (other than money market funds and stable value funds),
share prices of the Funds may rise and fall in value and you could lose money.
There is no guarantee that any Fund will achieve its objective.
3
<PAGE>
Fifth Third Quality Growth Fund
[LOGO]
Fundamental Growth of capital. Income is a secondary objective.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks of high quality
Strategies growth companies.
High quality growth companies are companies, in the
opinion of Fifth Third Bank, that offer excellent
prospects for consistent, above-average revenue and
earnings growth. To determine whether a company is of high
quality, the Fund generally looks for a strong record of
earnings growth, as well as its current ratio of debt to
capital and the quality of its management. Most of the
companies in which the Fund invests are U.S. companies
with a market capitalization greater than $100 million.
To achieve its secondary objective of income, the Fund may
rely on dividend income that it receives from common
stocks and interest income it receives from other
investments, including convertible securities. The Fund
reserves the right to invest up to 35% of total assets in
those securities. At the time of investment, those
securities are rated investment grade, that is, in the BBB
major rating category or higher by Standard & Poor's(R) or
in the Baa major rating category or higher by Moody's, or
their unrated equivalents.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value and the
An investment in potential for extended periods of lackluster performance.
the Fund is not
a deposit of Stocks that pay regular dividends tend to be less volatile
Fifth Third Bank than stocks that do not. A regular dividend provides
or any other investors some return of their investment, to an extent,
bank and is not supporting the stock's price, even during periods when the
insured or prices of equity securities generally are falling.
guaranteed by However, dividend-paying stocks, especially those that pay
the FDIC or any significant dividends, also tend to appreciate less
other government quickly than stocks of companies in emerging markets,
agency. which tend to reinvest most profits into research,
development, plant and equipment to accommodate expansion.
Generally, growth oriented stocks may be sensitive to
market movements. The prices of growth stocks tend to
reflect future expectations, and when those expectations
change or are not met, share prices generally fall. Stocks
of smaller companies tend to be volatile and more
sensitive to long-term market declines than stocks of
larger companies, in part because they generally do not
have the financial resources that larger companies have.
Prices of convertible securities, which include bonds and
preferred stocks, may be affected by the prices of the
underlying security, which generally is common stock.
4
<PAGE>
Fifth Third Quality Growth Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 29.69
1990 5.12
1991 34.38
1992 8.03
1993 -1.06
1994 0.07
1995 31.59
1996 23.68
1997 32.70
1998 30.05
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 28.18%
Worst quarter: Q3 1990 -11.19%
Year to Date Return (12/31/98 to 9/30/99) 6.44%
</TABLE>
----------
Average
Annual
Total
Returns
(for the
periods
ended
December
31,
1998)
<TABLE>
<CAPTION>
Past 5
Inception Date Past Year Years Past 10 Years Since Inception
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/83 24.22% 21.84% 18.05% 17.22%
-------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.18%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
5
<PAGE>
Fifth Third Equity Income Fund
[LOGO]
Fundamental High level of current income consistent with capital
Objective appreciation.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks of large-
Strategies capitalization companies, many of which are expected to
pay regular dividends, and convertible debt securities
that at the time of investment, have above-average current
yields. Large-capitalization companies have market
capitalizations no smaller than 90% of the market
capitalizations of the Companies in the S&P 500 Index.
The Fund's investment approach generally is to purchase
stocks of companies, which demonstrate industry
leadership, sound management and long-term earnings
growth, and which have attractive dividend yields or the
prospects of increasing dividend rates. At the time of
investment, those convertible debt securities in which the
Fund invests are rated investment grade (that is, in the
BBB major rating category or higher by Standard & Poor's
or the Baa major rating category or higher by Moody's, or
their unrated equivalents).
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as government and non-
convertible corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equities and in debt. The risks of
investing in equity securities include the risk of sudden
An investment in and unpredictable drops in value or periods of lackluster
the Fund is not performance. The risks of investing in debt securities
a deposit of include the tendency of bond prices to fall as interest
Fifth Third Bank rates rise.
or any other
bank and is not Significant investment in large companies also creates
insured or various risks for the Fund. For instance, larger, more
guaranteed by established companies tend to operate in mature markets,
the FDIC or any which often are very competitive. Larger companies also do
other government not tend to respond quickly to competitive challenges,
agency. especially to challenges caused by technology and consumer
preferences.
Stocks that pay regular dividends tend to be less volatile
than stocks that do not. A regular dividend provides
investors some return of their investment, to an extent,
supporting the stock's price, even during periods when the
prices of equity securities generally are falling.
However, dividend-paying stocks, especially those that pay
significant dividends, also tend to appreciate less
quickly than stocks of companies in emerging markets,
which tend to reinvest profits into research, development,
plant and equipment to accommodate expansion.
The tendency of bond prices to fall when interest rates
rise becomes more significant as the average maturity of
the Fund's bond portfolio increases. A less significant
risk of bond investing is that an issuer could default on
principal or interest payments. Prices of convertible
securities, which include bonds and preferred stocks, may
be affected by the prices of the underlying security,
which generally is common stock.
6
<PAGE>
Fifth Third Equity Income Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock
Exchange.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 24.57
1990 -1.21
1991 29.07
1992 4.61
1993 0.26
1994 -0.65
1995 30.73
1996 16.83
1997 38.15
1998 17.82
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
-------------------------
<TABLE>
<S> <C> <C>
Best quarter: Q2 1997 15.29%
Worst quarter: Q3 1990 -9.86%
Year to Date Return (12/31/98 to
9/30/99) -8.80%
</TABLE>
------------------
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
-----------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/83 12.52% 18.74% 14.66% 15.33%
------------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.18%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
7
<PAGE>
Fifth Third Cardinal Fund
[LOGO]
Fundamental Long-term growth of capital and income. Current income is
Objective a secondary objective.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks that have the
Strategies potential for long-term growth. Those stocks primarily are
issued by large-capitalization, U.S. companies which the
Fund believes are in a strong financial condition, have a
significant market presence and have healthy growth
prospects. Large-cap companies have, at the time of
investment, market capitalizations no smaller than 90% of
the market capitalizations of the companies in the S&P
500.
With income as a secondary objective, the Fund attaches
some significance to a company's dividend payment history
as well as prospects for future dividend growth.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as government and
corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value or periods of
An investment in lackluster performance.
the Fund is not
a deposit of Generally, growth oriented stocks may be sensitive to
Fifth Third Bank market movements. The prices of growth stocks tend to
or any other reflect future expectations, and when those expectations
bank and is not change or are not met, share prices generally fall.
insured or
guaranteed by Significant investment in large companies also creates
the FDIC or any various risks for the Fund. For instance, larger, more
other government established companies tend to operate in mature markets,
agency. which often are very competitive. Larger companies also do
not tend to respond quickly to competitive challenges,
especially to challenges caused by technology or consumer
preferences.
Stocks that pay regular dividends tend to be less volatile
than stocks that do not. A regular dividend provides
investors some return of their investment, to an extent,
supporting a stock's price, even during periods when the
prices of equity securities generally are falling.
However, dividend-paying stocks, especially those that pay
significant dividends, also tend to appreciate less
quickly than stocks of companies in emerging markets,
which tend to reinvest profits into research, development,
plant and equipment to accommodate expansion.
8
<PAGE>
Fifth Third Cardinal Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock
Exchange.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Institutional Shares*
1998 24.12
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 24.12%
Worst quarter: Q3 1998 -12.13%
Year to Date Return (12/31/98 to 9/30/99) 7.20%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/2/97 24.12% N/A N/A 27.77%
-------------------------------------------------------------------
(Since 1/2/97)
S&P 500(R) Index 28.58% N/A N/A 31.46%
</TABLE>
- --------------------------------------------------------------------------------
- ------
* For periods prior to September 21, 1998, reflects performance of
Institutional Shares of The Cardinal Fund. On September 21, 1998, The Cardinal
Fund, a registered open-end investment company managed by The Ohio Company, was
merged into Fifth Third Cardinal Fund.
9
<PAGE>
Fifth Third Pinnacle Fund
[LOGO]
Fundamental Long-term capital appreciation.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in common stocks and convertible
Strategies securities that have the potential for long-term growth.
In selecting stocks, the Fund looks primarily at companies
that have historically reported better corporate earnings
than the earnings that market analysts have predicted.
Generally, those companies are expected to grow faster
than the economy as a whole. Those companies also tend to
be established companies that appear to be capable of
sustained growth. Although most of those companies are
large, the Fund may invest in stocks of companies of any
size. Current income is not a factor in stock selection.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as government and
corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value or periods of
An investment in lackluster performance.
the Fund is not
a deposit of Generally, growth oriented stocks may be sensitive to
Fifth Third Bank market movements. The prices of growth stocks tend to
or any other reflect future expectations, and when those expectations
bank and is not are not met, prices generally fall.
insured or
guaranteed by Significant investment in large companies also creates
the FDIC or any various risks for the Fund. For instance, larger, more
other government established companies tend to operate in mature markets,
agency. which often are very competitive. Larger companies also do
not tend to respond quickly to competitive challenges,
especially to changes caused by technology or consumer
preferences.
10
<PAGE>
Fifth Third Pinnacle Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock
Exchange.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 30.97
1990 -3.14
1991 39.87
1992 -0.73
1993 3.31
1994 -1.12
1995 35.40
1996 22.44
1997 35.43
1998 32.83
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 24.87%
Worst quarter: Q3 1990 -15.34%
Year to Date Return (12/31/98 to 9/30/99) 0.87%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 3/4/85 26.83% 23.01% 17.76% 16.79%
---------------------------------------------------------------------
(Since 2/28/85)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.26%
- -------------------------------------------------------------------------------------------
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
11
<PAGE>
Fifth Third Balanced Fund
[LOGO]
Fundamental Capital appreciation and income.
Objective
Principal Under normal market conditions, the Fund uses an asset
Investment allocation strategy, investing in three primary categories
Strategies of securities: stocks, bonds and money market instruments.
The Fund intends to invest between 50% to 75% of total
assets in Common and preferred stocks and convertible
convertible preferred stocks and convertible corporate
bonds, 25% to 40% of total assets in non-convertible
corporate bonds and U.S. government securities and 0% to
25% in money market instruments. By analyzing financial
trends and market conditions, the Fund may adjust its
allocations from time to time. However, the Fund takes a
moderate to long-term view of changing market conditions,
and tends to avoid large, sudden shifts in the composition
of its portfolio.
The equity position of the Fund tends to be invested in
high quality growth companies that are either large or
mid-sized. While greater emphasis will be placed on larger
companies, that is, companies with market capitalizations
comparable to the market capitalization of those companies
in the S&P 500 Index, the Fund may favor smaller
companies, that is, companies with market capitalization
comparable to the market capitalizations of those
companies in the S&P 400 Index, when Fifth Third Bank
believes that market conditions favor securities of
smaller companies.
The fixed income portion of the Fund tends to be invested
in high quality bonds with maturities ranging from
overnight to thirty years in length. The Fund will attempt
to maintain the average maturity of the bond portion of
the Fund from between 5 and 9 years. At the time of
investment, the corporate bonds and convertible securities
in which the Fund invests are rated investment grade, that
is, in the BBB major rating category or higher by Standard
& Poor's or in the Baa major rating category or higher by
Moody's, or their unrated equivalents.
Principal The principal risks of investing in the Fund include the
Investment Risks risks associated with following an asset allocation
strategy, such as the risk that the Fund will not
An investment in correctly anticipate the relative performance of the
the Fund is not different asset classes in which it may invest.
a deposit of
Fifth Third Bank To the extent the Fund invests in stocks and convertible
or any other securities, it assumes the risks of equity investing,
bank and is not including sudden and unpredictable drops in value and
insured or periods of lackluster performance.
guaranteed by
the FDIC or any Significant investments in large companies also creates
other government various risks for the Fund. For instance, larger, more
agency. established companies tend to operate in mature markets,
which often are very competitive. Larger companies also do
not tend to respond quickly to competitive challenges,
especially to changes caused by technology or consumer
preferences.
To the extent the Fund invests in bonds, it assumes the
risks of bond investing, including the tendency of prices
to fall as interest rates rise. That risk is greater for
bonds with longer maturities. Less significant is the risk
that a bond issuer will default on principal or interest
payments. Prices of convertible securities, which include
bonds and preferred stocks, may be affected by the prices
of the underlying security, which generally is common
stock.
12
<PAGE>
Fifth Third Balanced Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to two broad-based securities indices. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock
Exchange. The Lehman Brothers Aggregate Bond Index (the "LBAB Index") is an
unmanaged index generally representative of the performance of the bond market
as a whole.
The returns assume that Fund distributions have been reinvested.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 26.57
1990 9.95
1991 30.13
1992 9.88
1993 1.74
1994 -1.03
1995 26.53
1996 14.23
1997 24.08
1998 17.87
Past performance does not indicate how the Fund will perform in the future.
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
-------------------------
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 17.81%
Worst quarter: Q3 1998 -6.36%
Year to Date Return (12/31/98 to
9/30/99) 0.90%
</TABLE>
-------------------
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
-------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/83 12.58% 14.85% 15.00% 16.01%
------------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 28.58% 24.06% 19.19% 18.18%
------------------------------------------------------------------
(Since 1/1/83)
LBAB Index 8.67% 7.27% 9.26% 10.18%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Returns information
is for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
13
<PAGE>
Fifth Third Mid Cap Fund
[LOGO]
Fundamental Growth of Capital. Income is a secondary objective.
Objective
Principal Under normal market conditions, the Fund expects to invest
Investment at least 65% of total assets in common stocks of mid cap
Strategies companies. Mid cap companies are companies with market
capitalizations no larger than 110%, and no smaller than
90%, of the market capitalizations of the companies in the
Standard & Poor's MidCap 400 Index (generally, between
$500 million and $10 billion).
The Fund intends to invest in companies that have the
potential for long-term revenue and earnings growth, solid
balance sheets and which may have the potential to pay
dividends. The Fund generally selects its investments
using traditional research techniques, which include
projections of earnings and dividend growth and the
expected volatility of the markets in which the companies
do business.
To achieve its secondary objective of income, the Fund
relies on dividend and interest income. The Fund may
invest up to 35% of total assets in common stocks of large
cap companies, many of which pay dividends, as well as
convertible securities which pay interest. At the time of
investment, those convertible securities are rated
investment grade, that is, in the BBB major rating
category or higher by Standard & Poor's, or in the Baa
major rating category or higher by Moody's, or their
unrated equivalents. The Fund also may invest in small cap
stocks.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as the risk
of sudden and unpredictable drops in value or periods of
An investment in lackluster performance.
the Fund is not
a deposit of Stocks of medium-sized companies can be more sensitive to
Fifth Third Bank long market declines than larger companies, in part
or any other because they generally do not have the financial resources
bank and is not that larger companies have. Generally, growth oriented
insured or stocks are sensitive to market movements. The prices of
guaranteed by growth stocks tend to reflect future expectations, and
the FDIC or any when those expectations change or are not met, share
other government prices generally fall.
agency.
Stocks that pay regular dividends tend to be less volatile
than stocks that do not. A regular dividend provides
investors some return on their investment, to an extent,
supporting a stock's price, even during periods when
prices of equity securities are falling. However, dividend
paying stocks, especially those that pay significant
dividends, also tend to appreciate less quickly than
stocks of companies in emerging markets, which tend to
reinvest profits into research, development, plant and
equipment to accommodate expansion.
To the extent the Fund invests in bonds, it assumes the
risks of bond investing, including the tendency of prices
to fall as interest rates rise. That risk is greater for
bonds with longer maturities. Less significant is the risk
that a bond issuer will default on principal or interest
payments, which may cause a loss for the Fund. Prices of
convertible securities, which include bonds and preferred
stocks, may be affected by the prices of the underlying
security, which generally is common stock.
14
<PAGE>
Fifth Third Mid Cap Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's MidCap 400
Index (the "S&P 400") is an unmanaged index generally representative of the mid-
cap sector of the U.S. stock market.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 29.05
1990 1.84
1991 46.01
1992 5.05
1993 1.38
1994 1.54
1995 26.03
1996 17.59
1997 32.64
1998 3.29
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
-------------------------
<TABLE>
<S> <C> <C>
Best quarter: Q4 1998 18.88%
Worst quarter: Q3 1990 -16.52%
Year to Date Return (12/31/98 to
9/30/99) -5.20%
</TABLE>
--------------------
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
--------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/85 -1.36% 14.52% 14.93% 15.12%
----------------------------------------------------------------------
(Since 12/31/84)
S&P Mid Cap 400(R) Index 19.12% 18.85% 19.29% 18.60%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Returns information
is for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
15
<PAGE>
Fifth Third International Equity Fund
[LOGO]
Fundamental Long-term capital appreciation.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in equity securities of non-U.S.
Strategies companies. The companies whose securities are represented
in the Fund's portfolio are located in at least three
countries other than the U.S.
The Fund uses a top-down, bottom-up strategy of selecting
its portfolio. It allocates assets among geographic
regions and individual countries, investing primarily in
those areas that it believes have the greatest potential
for growth as well as stable exchange rates. Although the
Fund invests primarily in established foreign securities
markets, from time to time, it may also invest in emerging
markets. In selecting stocks in a specific country, the
Fund generally attempts to replicate a broad market index,
which usually is the Morgan Stanley Capital International
Index for that country. From time to time, however, the
Fund may overweight or underweight industries represented
in that index.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as equity securities of
U.S. companies, U.S. and non-U.S. government bonds and
U.S. and non-U.S. corporate bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in equity securities, such as, the risk
of sudden and unpredictable drops in value or periods of
An investment in lackluster performance.
the Fund is not
a deposit of Stocks of foreign companies present additional risks for
Fifth Third Bank U.S. investors. Stocks of international companies tend to
or any other be less liquid and more volatile than their U.S.
bank and is not counterparts, in part because accounting standards and
insured or market regulations tend to be less standardized and
guaranteed by economic and political climates less stable. Fluctuations
the FDIC or any in exchange rates also may reduce or eliminate gains or
other government create losses. These risks usually are higher in emerging
agency. markets, such as most countries in Africa, Asia, Latin
America and the Middle East. To the extent that the Fund
invests in those kinds of stocks or in those areas, it
will be exposed to the risks associated with those kinds
of investments.
16
<PAGE>
Fifth Third International Equity Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Morgan Stanley Capital
International EAFE Index (the "EAFE Index") is an unmanaged index generally
representative of the foreign stock market.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1995 11.29
1996 8.54
1997 7.96
1998 19.34
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q1 1998 15.70%
Worst quarter: Q3 1998 -11.88%
Year to Date Return (12/31/98 to 9/30/99) 6.83%
</TABLE>
----------
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 8/18/94 13.96% N/A N/A 7.93%
-------------------------------------------------------------------
<CAPTION>
(Since 8/31/94)
<S> <C> <C> <C> <C> <C>
EAFE Index 20.33% N/A N/A 7.74%
- -----------------------------------------------------------------------------------------
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
17
<PAGE>
Fifth Third Bond Fund For Income
[LOGO]
Fundamental High level of current income.
Objective
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in debt securities and mortgage-backed
Strategies securities. At the time of investment, each of those
securities has a remaining maturity or average life of 10
years or less and is rated as investment grade. Investment
grade securities are securities rated in the BBB major
rating category or higher by Standard & Poor's, or in the
Baa major rating category or higher by Moody's, or their
unrated equivalents.
From time to time, the Fund will invest in mortgage-backed
securities, which generally offer higher interest rates
than many types of debt securities. Mortgage-backed
securities represent interests in the revenue generated
from pools of mortgages.
The Fund strives to manage its portfolio so that it
receives a fairly consistent level of income regardless of
fluctuations in interest rates. Additionally, the Fund may
seek some capital appreciation, especially when bond
prices are rising, if Fifth Third Bank believes that the
Fund can realize such appreciation without foregoing its
objective of high current income.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
An investment in and the risk of an issuer defaulting on its obligations of
the Fund is not paying principal and interest.
a deposit of
Fifth Third Bank Generally, the price of a bond moves in the opposite
or any other direction from interest rates. New bonds issued after a
bank and is not rise in rates offer higher yields to investors. An
insured or existing bond with a lower yield can appear attractive to
guaranteed by investors by selling it at a lower price. This process
the FDIC or any works in reverse as well; as interest rates fall, the
other government price of a bond tends to increase.
agency.
The prices of mortgage-backed securities also are affected
by changes in interest rates. Although mortgage-backed
securities tend to pay higher interest rates, they also
carry additional risk. For instance, their prices and
yields typically assume that the securities will be
redeemed at a given time before maturity. When interest
rates fall substantially, they usually are redeemed early
because the underlying mortgages often are prepaid. The
Fund would then have to reinvest the proceeds it receives
because of those redemptions at a lower rate. The price or
yield of mortgage-backed securities also may fall if they
are redeemed after that date.
18
<PAGE>
Fifth Third Bond Fund For Income
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Intermediate
Government/Corporate Index ("LBIGC") is an unmanaged index generally
representative of the performance of the bond market as a whole.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 12.24
1990 8.24
1991 14.62
1992 6.32
1993 8.67
1994 -6.40
1995 16.95
1996 1.86
1997 7.27
1998 7.40
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1989 6.49%
Worst quarter: Q2 1994 -3.55%
Year to Date Return (12/31/98 to 9/30/99) -0.40%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/83 2.59% 4.17% 7.03% 8.28%
-------------------------------------------------------------------
(Since 1/1/83)
LBIGC 8.42% 6.59% 8.50% 9.30%
- -----------------------------------------------------------------------------------------
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
19
<PAGE>
Fifth Third Quality Bond Fund
[LOGO]
Fundamental High current income. Capital growth is a secondary
Objective objective.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in U.S. Treasury bills, notes and
Strategies bonds, securities of U.S. Government agencies and
instrumentalities and corporate debt securities, including
mortgage-backed securities. Mortgage-backed securities
generally offer higher interest rates than many types of
debt securities. At the time of investment, each of those
securities has a remaining maturity or average life of 30
years or less; and each corporate bond is rated as
investment grade. Investment grade securities are
securities rated in the BBB major rating category or
higher by Standard & Poor's, or in the Baa major rating
category by Moody's, or their unrated equivalents.
The Fund is managed for growth of capital but with less
volatility than the volatility generally associated with a
portfolio composed solely of stocks. In selecting
portfolio securities, the Fund generally considers, among
other things, remaining maturity, stated interest rates,
the price of the security, as well as the financial
condition of the issuer and its prospects for long-term
growth of earnings and revenues.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
An investment in and the risk of an issuer defaulting on its obligations of
the Fund is not paying principal and interest. The prices of long-term
a deposit of bonds (bonds with a remaining maturity of at least 10
Fifth Third Bank years) tend to be more volatile then the prices of bonds
or any other with a shorter remaining maturity.
bank and is not
insured or Generally, the price of a bond moves in the opposite
guaranteed by direction from interest rates. New bonds issued after a
the FDIC or any rise in rates offer higher yields to investors. An
other government existing bond with a lower yield can appear attractive to
agency. investors by selling it at a lower price. This process
works in reverse as well; as interest rates fall, the
price of a bond tends to increase.
The prices of mortgage-backed securities also are affected
by changes in interest rates. Although mortgage-backed
securities tend to pay higher interest rates, they also
carry additional risk. For instance, their prices and
yields typically assume that the securities will be
redeemed at a given time before maturity. When interest
rates fall substantially, they usually are redeemed early
because the underlying mortgages often are prepaid. The
Fund would then have to reinvest the proceeds it receives
because of those redemptions at a lower rate. The price or
yield of mortgage-backed securities also may fall if they
are redeemed after that date.
From time to time, the Fund's portfolio could be
significantly invested in some of the highest quality debt
securities, which tend not to provide the same opportunity
for current income or capital growth as lower grade
securities, or in BBB/Baa rated debt securities, which
generally have more speculative investment characteristics
than higher grade debt securities.
20
<PAGE>
Fifth Third Quality Bond Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Aggregate Bond
Index ("LBAB") is an unmanaged index generally representative of the
performance of the bond market as a whole.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 11.74
1990 8.04
1991 14.65
1992 6.00
1993 7.52
1994 -3.90
1995 17.18
1996 1.85
1997 8.20
1998 8.45
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1989 6.60%
Worst quarter: Q1 1994 -3.16%
Year to Date Return (12/31/98 to 9/30/99) -1.98%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/83 3.54% 5.15% 7.32% 8.20%
-------------------------------------------------------------------
(Since 1/1/83)
LBAB 8.67% 7.27% 9.26% 10.18%
- -----------------------------------------------------------------------------------------
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
21
<PAGE>
Fifth Third U.S. Government Securities Fund
[LOGO]
Fundamental High level of current income. Capital growth is a
Objective secondary objective.
Principal Under normal market conditions, the Fund invests at least
Investment 65% of total assets in U.S. government securities. At the
Strategies time of investment each of those securities has a
remaining maturity or average life of 7 years or less,
although the Fund attempts to minimize fluctuations in the
value of its shares.
U.S. government securities are debt securities issued or
guaranteed as to principal or interest by the U.S.
Treasury, various government agencies or certain
organizations, which have been formed by an Act of
Congress. They may include securities issued or sponsored
by Government National Mortgage Association (Ginnie Mae),
Federal National Mortgage Association (Fannie Mae) and
Federal Home Loan Mortgage Corporation (Freddie Mac).
U.S. Treasury securities are direct obligations of the
U.S. Government, and are backed by the U.S. Government's
full faith and credit. The principal and interest to be
paid on securities issued by some U.S. government agencies
also may be backed by the U.S. Government's full faith and
credit, by other obligations of the Treasury or by the
agency itself. While there are different degrees of credit
quality, all U.S. government securities generally are
considered highly credit worthy.
In selecting portfolio securities, the Fund generally
considers, among other things, stated interest rates and
the price of a security. The Fund attempts to limit
volatility of Fund share prices by managing the average
life of the Fund's investment portfolio.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as corporate bonds and
high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
An investment in and the risk of an issuer defaulting on its obligations of
the Fund is not paying principal and interest.
a deposit of
Fifth Third Bank Generally, the price of a bond moves in the opposite
or any other direction from interest rates. New bonds issued after a
bank and is not rise in rates offer higher yields to investors. An
insured or existing bond with a lower yield can appear attractive to
guaranteed by investors by selling it at a lower price. This process
the FDIC or any works in reverse as well; as interest rates fall, the
other government price of a bond tends to increase.
agency.
22
<PAGE>
Fifth Third U.S. Government Securities Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Intermediate
Government Bond Index ("LBIGBI") is an unmanaged index generally representative
of intermediate-term government bonds.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 8.78
1990 8.45
1991 9.51
1992 5.27
1993 6.19
1994 -2.18
1995 13.01
1996 2.45
1997 7.14
1998 7.38
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
-------------------------
<TABLE>
<S> <C> <C>
Best quarter: Q2 1995 4.49%
Worst quarter: Q1 1994 -1.99%
Year to Date Return (12/31/98 to
9/30/99) 0.07%
</TABLE>
-------------------
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
-------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/86 2.56% 4.46% 6.03% 5.90%
---------------------------------------------------------------------
(Since 1/1/86)
LBIGBI 8.47% 6.45% 8.34% 8.17%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Returns information
is for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
23
<PAGE>
Fifth Third Municipal Bond Fund
[LOGO]
Fundamental High level of current income that is exempt from federal
Objective regular income taxes.
Principal Under normal market conditions, the Fund invests at least
Investment 80% of total assets in municipal securities, which pay
Strategies interest that is exempt from federal income tax. The
securities generally are issued by U.S. states, counties,
cities, towns, territories and public authorities. At the
time of investment, they are rated as investment grade.
Investment grade securities are securities rated in the
BBB major rating category or higher by Standard & Poor's
or in the Baa major rating category by Moody's, or their
unrated equivalents.
Among the securities in which the Fund may invest are
participation agreements, that is, interests in loans made
to municipalities, and general obligation and revenue
bonds of tax-exempt municipalities. The Fund also may
invest in limited obligation securities, from which
interest and principal payments are dependent on payments
from specific sources rather than the general obligations
of the government issuer. Limited obligation securities
include: lease obligations and installment contracts
(issued by government entities to obtain funds to lease or
acquire equipment and other property), project finance
obligations (issued in connection with the financing of
infrastructure projects) and industrial revenue bonds
(issued in the name of a public authority to finance
infrastructure used by a private entity).
In selecting portfolio securities the Fund generally
considers, among other things, remaining maturity or
average life, stated interest rates and the price of a
security. The Fund attempts to manage volatility by
maintaining a portfolio with an intermediate average life.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as U.S. government
securities, corporate bonds and high yield bonds.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
An investment in and the risk of an issuer defaulting on its obligations of
the Fund is not paying principal and interest.
a deposit of
Fifth Third Bank Generally, the price of a bond moves in the opposite
or any other direction from interest rates. New bonds issued after a
bank and is not rise in rates offer higher yields to investors. An
insured or existing bond with a lower yield can appear attractive to
guaranteed by investors by selling it at a lower price. This process
the FDIC or any works in reverse as well; as interest rates fall, the
other government price of a bond tends to increase.
agency.
The Fund's performance may be affected by political and
economic factors at the state, regional or national level.
Those factors may include budgetary problems and declining
tax bases. Actual or proposed changes in tax rates also
may affect your net return. Limited obligation securities
are not general obligations of the issuers. As a result,
in the event of a default or termination, the security
holders may have limited recourse.
24
<PAGE>
Fifth Third Municipal Bond Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Municipal Bond
Index ("LBMBI") is an unmanaged index that generally is representative of
municipal bonds with intermediate maturities.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 8.10
1990 6.89
1991 8.60
1992 6.25
1993 6.76
1994 -2.30
1995 9.68
1996 3.26
1997 6.88
1998 5.57
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
-------------------------
<TABLE>
<S> <C> <C>
Best quarter: Q4 1989 4.29%
Worst quarter: Q1 1994 -3.12%
Year to Date Return (12/31/98 to
9/30/99) -2.81%
</TABLE>
--------------------
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
--------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/83 0.81% 3.59% 5.43% 6.85%
------------------------------------------------------------------
(Since 12/31/82)
LBMBI 6.48% 6.23% 8.22% 9.52%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
25
<PAGE>
Fifth Third Ohio Tax Free Bond Fund
[LOGO]
Fundamental Current income exempt from federal income tax and the
Objective personal income taxes imposed by the State of Ohio and
Ohio municipalities.
Principal Under normal market conditions, the Fund invests at least
Investment 80% of net assets in municipal securities which pay
Strategies interest that is exempt from personal income taxes imposed
by Ohio and its municipalities. The securities generally
are issued by the State of Ohio, as well as counties,
cities, towns, territories and public authorities in Ohio.
At the time of investment, they are rated as investment
grade. Investment grade securities are securities rated in
the BBB major rating category or higher by Standard &
Poor's or in the Baa major rating category by Moody's, or
their unrated equivalents.
Among the securities in which the Fund may invest are
participation agreements, that is, interests in loans made
to municipalities, and general obligation and revenue
bonds of tax-exempt municipalities. The Fund also may
invest in limited obligation securities, from which
interest and principal payments are dependent on payments
from specific sources rather than the general obligations
of the government issuer. Limited obligation securities
include: lease obligations and installment contracts
(issued by government entities to obtain funds to lease or
acquire equipment and other property), project finance
obligations (issued in connection with the financing of
infrastructure projects) and industrial revenue bonds
(issued in the name of a public authority to finance
infrastructure used by a private entity).
In selecting portfolio securities, the Fund considers,
among other things, remaining maturity or average life,
stated interest rates and the price of a security. The
Fund attempts to manage volatility by maintaining a
portfolio with an intermediate average life.
Principal The principal risks of investing in the Fund include the
Investment Risks risks of investing in debt securities, such as, the
tendency of bond prices to fall when interest rates rise
An investment in and the risk of an issuer defaulting on its obligations of
the Fund is not paying principal and interest.
a deposit of
Fifth Third Bank Generally, the price of a bond moves in the opposite
or any other direction from interest rates. New bonds issued after a
bank and is not rise in rates offer higher yields to investors. An
insured or existing bond with a lower yield can appear attractive to
guaranteed by investors by selling it at a lower price. This process
the FDIC or any works in reverse as well; as interest rates fall, the
other government price of a bond tends to increase.
agency.
The Fund's performance may be affected by political and
economic factors at the state or regional level. Those
factors may include budgetary problems and declining tax
bases. Actual or proposed changes in tax rates also may
affect your net return. Limited obligation securities are
not general obligations of the issuers. As a result, in
the event of a default or termination, the security
holders may have limited recourse. Economic activity in
Ohio, as in many other states with a significant
industrial base, tends to be more cyclical than in other
states and in the nation as a whole.
This Fund is a non-diversified fund with regard to issuers
of securities. As a result, it does not have to invest in
as many issuers as a diversified fund and thus, could be
significantly affected by the performance of one or a
small number of issuers.
26
<PAGE>
Fifth Third Ohio Tax Free Bond Fund [LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Lehman Brothers Municipal Bond
Index ("LBMBI") is an unmanaged index that generally is representative of
municipal bonds with intermediate maturities.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 8.52
1990 5.70
1991 9.46
1992 6.24
1993 6.71
1994 -4.01
1995 13.72
1996 3.48
1997 6.92
1998 5.50
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q1 1995 5.53%
Worst quarter: Q1 1994 -3.78%
Year to Date Return (12/31/98 to 9/30/99) -2.49%
-------------------------------------------------
</TABLE>
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
-------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 1/1/87 0.72% 4.00% 5.65% 4.94%
------------------------------------------------------------------
(Since 12/31/86)
LBMBI 6.48% 6.23% 8.22% 7.80%
</TABLE>
- --------------------------------------------------------------------------------
* The Fund first offered Institutional shares on 8/11/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
27
<PAGE>
Shareholder Fees and Fund Expenses
Fee Tables
These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Funds.
Shareholder fees are paid by you at the time you purchase or sell your shares.
Annual Fund operating expenses are paid out of Fund assets, and are reflected
in the share price. Each Fund's fees and expenses are based upon the Fund's
operating expenses for the fiscal year ended July 31, 1999.
Shareholder Fees
<TABLE>
<CAPTION>
Stock Funds--Fee Table
----------------------
Fifth Third
Fifth Third Fifth Third Fifth Third Fifth Third Fifth Third Fifth Third International
Quality Growth Equity Income Cardinal Pinnacle Balanced Mid Cap Equity
Fund Fund Fund/1/ Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed on
Purchases None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales
Load None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------
Annual Fund Operating
Expenses
(as a percentage of
average
net assets)
Management fees 0.80% 0.80% 0.60% 0.80% 0.80% 0.80% 1.00%
- ------------------------------------------------------------------------------------------------------------------------
Distribution
(12b-1) fees None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------
Other expenses 0.25% 0.32% 0.29% 0.42% 0.24% 0.24% 0.50%
- ------------------------------------------------------------------------------------------------------------------------
Total Annual Fund
Operating Expenses 1.05% 1.12% 0.89% 1.22% 1.04% 1.04% 1.50%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Because some of the fund's expenses have been reduced
through expense waivers and reimbursements, actual
total operating expenses for the prior year would have
been as shown below.
Net Total Annual Fund
Operating Expenses 1.00% 1.07% 0.82% 1.21% 1.00% 0.97% 1.50%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
Shareholder Fees and Fund Expenses
Shareholder Fees
<TABLE>
<CAPTION>
Bond Funds--Fee Table
---------------------
Fifth Third Fifth Third Fifth Third Fifth Third
Bond Fund for Fifth Third U.S. Government Municipal Bond Ohio Tax Free
Income Quality Bond Fund Securities Fund Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed
on Purchases None None None None None
- -----------------------------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) Imposed
on Reinvested Dividends None None None None None
- -----------------------------------------------------------------------------------------------------------
Maximum Deferred Sales
Load None None None None None
- -----------------------------------------------------------------------------------------------------------
Annual Fund Operating
Expenses
(as a percentage of
average net assets)
Management fees 0.55% 0.55% 0.55% 0.55% 0.55%
- -----------------------------------------------------------------------------------------------------------
Distribution (12b-1)
fees None None None None None
- -----------------------------------------------------------------------------------------------------------
Other expenses 0.23% 0.31% 0.48% 0.31% 0.32%
- -----------------------------------------------------------------------------------------------------------
Total Annual Fund
Operating Expenses 0.78% 0.86% 1.03% 0.86% 0.87%
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Because some of the fund's expenses have been reduced
through expense waivers and reimbursements, actual
total operating expenses for the prior year would have
been as shown below.
Net Total Annual Fund
Operating Expenses 0.75% 0.75% 0.75% 0.75% 0.82%
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
Shareholder Fees and Fund Expenses
Expense Examples
Use the tables below to compare fees and expenses with the fees and expenses of
other mutual funds. The tables illustrate the amount of fees and expenses you
and the Fund would pay, assuming a $10,000 initial investment, 5% annual
return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
Stock Funds
<TABLE>
<CAPTION>
Fifth Third Quality 1 3 5 10
Growth Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $107 $334 $579 $1,283
---------------------------------------------
<CAPTION>
Fifth Third Equity 1 3 5 10
Income Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $114 $356 $617 $1,363
---------------------------------------------
<CAPTION>
Fifth Third Cardinal 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $ 91 $284 $493 $1,096
---------------------------------------------
<CAPTION>
Fifth Third Pinnacle 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $124 $387 $670 $1,477
---------------------------------------------
<CAPTION>
Fifth Third Balanced 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $106 $331 $574 $1,271
---------------------------------------------
<CAPTION>
Fifth Third Mid Cap 1 3 5 10
Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $106 $331 $574 $1,271
---------------------------------------------
<CAPTION>
Fifth Third
International 1 3 5 10
Equity Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $153 $474 $818 $1,791
---------------------------------------------
Bond Funds
<CAPTION>
Fifth Third Bond 1 3 5 10
Fund For Income Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $ 80 $249 $433 $ 966
---------------------------------------------
<CAPTION>
Fifth Third Quality 1 3 5 10
Bond Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $ 88 $274 $477 $1,061
---------------------------------------------
<CAPTION>
Fifth Third U.S.
Government 1 3 5 10
Securities Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $105 $328 $569 $1,259
---------------------------------------------
<CAPTION>
Fifth Third 1 3 5 10
Municipal Bond Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $ 88 $274 $477 $1,061
---------------------------------------------
<CAPTION>
Fifth Third Ohio Tax 1 3 5 10
Free Bond Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $ 89 $278 $482 $1,073
---------------------------------------------
</TABLE>
30
<PAGE>
Additional Information About the Funds' Investments
The primary investments and investment strategies of the Funds are described
above. Below are descriptions of some additional investments and strategies of
the Funds, some of their risks as well as other risks of investing in the
Funds. A list of each Fund's investments is included in the Funds' most recent
annual or semi-annual report to shareholders. Please note, though, that a Fund
may adjust the composition of its portfolio as market and economic conditions
change.
The success of achieving each Fund's investment strategy depends on the skill
of FifthThird Bank's, Heartland's or MSAM's ability to assess the potential of
the securities in which the Fund invests as well as to evaluate and anticipate
changing economic and market conditions.
International Many U.S. companies in which the Funds may invest generate
Exposure significant revenues and earnings from abroad. As a
(Applies to all result, those companies and the prices of their securities
Equity and Bond may be affected by weaknesses in global and regional
Funds) economies and the relative value of foreign currencies to
the U.S. dollar. Taken as a whole, those factors could
adversely affect the price of Fund shares.
Foreign Foreign securities are generally more volatile than their
Securities domestic counterparts, in part because of higher political
(Applies to Fifth and economical risks, the general lack of reliable
Third Quality information and fluctuations in currency exchange rates.
Growth, Fifth Those risks are usually higher in less developed
Third Equity countries.
Income, Fifth
Third Mid Cap, In addition, foreign securities may be more difficult to
Fifth Third resell and the markets for them less efficient than for
International comparable U.S. securities. Even where a foreign security
Equity, Fifth increases in price in its local currency, the appreciation
Third Bond Fund may be diluted by the negative effect of exchange rates
for Income, and when the security's value is converted to U.S. dollars.
Fifth Third Foreign withholding taxes also may apply and errors and
Quality Bond delays may occur in the settlement process for foreign
Funds) securities.
The fund may use foreign currencies and related
instruments to hedge its foreign investments.
Repurchase Each Fund may enter into repurchase agreements. A
Agreements repurchase agreement is an agreement in which a Fund buys
(Applies to all securities from a bank or other financial institution and
Funds) agrees to sell it back at a specified time and place. The
risks of repurchase agreements include the risk that a
counterparty will not buy back the securities as required
and the securities decline in value. To mitigate those
risks, the Funds intend to enter repurchase agreements
only with high quality counterparties and purchase only
high quality, short-term debt securities.
Securities Each Fund may seek additional income or fees by lending
Lending portfolio securities to qualified institutions. By
(Applies to all reinvesting any cash collateral it receives in these
Funds) transactions, a Fund could realize additional gains or
losses. If the borrower fails to return the securities and
the invested collateral has declined in value, a Fund
could lose money.
Restricted and Any securities that are thinly traded or whose resale is
Illiquid restricted can be difficult to sell at a desired time and
Securities price. Some of those securities are new and complex, and
(Applies to all trade only among institutions; the markets for these
Funds) securities are still developing and may not function as
efficiently as established markets. Owning a large
percentage of restricted or illiquid securities could
hamper a Fund's ability to raise cash in order to meet
redemptions. Also, because there may not be an established
market price for these securities, a Fund may have to
estimate their value, which means that their valuation
(and, to a much smaller extent, the valuation of the Fund)
may have a subjective element.
31
<PAGE>
Additional Information About the Funds' Investments
Derivatives Derivatives, a category that includes warrants, options
(Applies to all and futures, are financial instruments whose value derives
Funds) from another security, an index or currency. Each Fund may
use derivatives for hedging (attempting to offset a
potential loss in one position by establishing an interest
in an opposite position). This includes the use of
currency-based derivatives for hedging its positions in
foreign securities. The Funds may also use derivatives for
speculation (investing for potential income or capital
gain).
While hedging can guard against potential risks, it adds
to a Fund's expenses and can eliminate some opportunities
for gains. There is also a risk that a derivative intended
as a hedge may not perform as expected.
The main risk with derivatives is that some types can
amplify a gain or loss, potentially earning or losing
substantially more money than the actual cost of the
derivative.
With some derivatives, whether used for hedging or
speculation, there is also the risk that the counterparty
may fail to honor its contract terms, causing a loss for a
Fund.
When-Issued Each Fund may invest in securities prior to their date of
Securities issue. These securities could fall in value by the time
(Applies to all they are actually issued, which may be any time from a few
Funds) days to over a year.
Bonds The value of any bond held by a Fund is likely to decline
(Applies to all when interest rates rise; this risk is greater for bonds
Funds) with longer maturities. A less significant risk is that a
bond issuer could default on principal or interest
payments, causing a loss for a Fund.
Short-Term While the Funds ordinarily do not trade securities for
Trading short-term profits, they may sell any security at any time
(Applies to all they believe best, which may result in short-term trading.
Funds) Short-term trading can increase a Fund's transaction costs
and may increase your tax liability if there are capital
gains.
Defensive During unusual market conditions, each Fund may place up
Investing to 100% of total assets in cash or high-quality, short-
(Applies to all term debt securities. To the extent that a Fund does this,
Funds) it is not pursuing its goal.
Year 2000 Fifth Third Bank and BISYS Fund Services Limited
(Applies to all Partnership ("BISYS"), the Funds' administrator, do not
Funds) currently anticipate that computer problems related to the
year 2000 will have a material effect on any Fund. There
can be no assurances in this area, however, and although
Fifth Third Funds and BISYS have undertaken significant
projects to minimize the risk of year 2000 computer
problems, some factors, including the year 2000 compliance
of Fifth Third Fund's and BISYS's suppliers, are not
within their direct control and could negatively affect
communications systems, investment markets or the economy
in general.
32
<PAGE>
Fund Management
Investment Advisors and Subadvisor
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, serves as
investment advisor to all Funds other than Fifth Third Pinnacle Fund. Heartland
Capital Management, Inc., 251 North Illinois Street, Suite 300, Indianapolis,
Indiana 46204, serves as investment advisor to Fifth Third Pinnacle Fund. Each
of those two advisors is a subsidiary of Fifth Third Bancorp. Morgan Stanley
Asset Management, Inc., 1221 Avenue of the Americas, New York, New York 46204,
serves as investment subadvisor to Fifth Third International Equity Fund.
As of September 30, 1999, Fifth Third Bank had approximately $18 billion of
assets under management, including approximately $4.6 billion of assets of
Fifth Third Funds. As of September 30, 1999, Heartland had approximately $1.8
billion of assets under management, including approximately $118 million of
assets held by mutual funds. As of September 30, 1999, MSAM had approximately
$175 billion of assets under management, including approximately $44.98 billion
of assets held by mutual funds.
The management and subadvisory fees paid by the Funds for the fiscal year ended
July 31, 1999 are as follows:
<TABLE>
<CAPTION>
As a percentage of
average net assets
- ---------------------------------------------------------------
<S> <C>
Fifth Third Quality Growth Fund 0.80%
- ---------------------------------------------------------------
Fifth Third Equity Income Fund 0.80%
- ---------------------------------------------------------------
Fifth Third Cardinal Fund 0.60%
- ---------------------------------------------------------------
Fifth Third Pinnacle Fund 0.80%
- ---------------------------------------------------------------
Fifth Third Balanced Fund 0.80%
- ---------------------------------------------------------------
Fifth Third Mid Cap Fund 0.80%
- ---------------------------------------------------------------
Fifth Third International Equity Fund 1.00%
(subadvisory fee) (0.45%)*
- ---------------------------------------------------------------
Fifth Third Bond Fund For Income 0.55%
- ---------------------------------------------------------------
Fifth Third Quality Bond Fund 0.55%
- ---------------------------------------------------------------
Fifth Third U.S. Government Securities Fund 0.55%
- ---------------------------------------------------------------
Fifth Third Municipal Bond Fund 0.55%
- ---------------------------------------------------------------
Fifth Third Ohio Tax Free Bond Fund 0.55%
- ---------------------------------------------------------------
</TABLE>
* Fifth Third Bank was responsible for paying this fee from the fees it
received as investment manager to Fifth Third International Equity Fund.
Portfolio Managers
Fifth Third Bank
Equity Funds
Steven E. Folker has been the portfolio manager for Fifth Third Quality Growth
Fund, Fifth Third Balanced Fund and Fifth Third Mid Cap Fund since 1993 and
Fifth Third Cardinal Fund since 1998. Currently, he is the Chief Equity
Strategist for Fifth Third Investment Advisors and is Vice President and Trust
Officer of Fifth Third Bank. He is also a Chartered Financial Analyst, has over
16 years of investment experience and is a
33
<PAGE>
Fund Management
member of the Cincinnati Society of Financial Analysts. He earned a B.B.A. in
Finance & Accounting and an M.S. in Finance, Investments & Banking from the
University of Wisconsin.
John B. Schmitz has managed Fifth Third International Equity Fund since 1994,
and Fifth Third Equity Income Fund since 1997. He is a Vice President and Trust
Officer of Fifth Third Bank, a Chartered Financial Analyst and has over 12
years of experience. He is also a member of the Cincinnati Society of Financial
Analysts. Mr. Schmitz graduated with a B.B.A. in Finance & Real Estate from the
University of Cincinnati.
Bond Funds
Investment decisions for all of the Fifth Third bond funds as well as the bond
portion of Fifth Third Balanced Fund are made by a team of investment
professionals, all of whom are employees of Fifth Third Bank.
Heartland Capital Management, Inc.
Robert D. Markley, President and Chief Executive Officer of Heartland and
Thomas F. Maurath, Executive Vice President of Heartland, have been primarily
responsible for management of Fifth Third Pinnacle Fund and management of its
predecessor fund since 1985. Mr. Markley is a Chartered Financial Analyst and
holds a B.A. in Marketing form Michigan State University and an M.B.A. from
Northwestern University. Mr. Maurath also is a Chartered Financial Analyst who
earned a B.B.A. in Accounting from the University of Notre Dame and a M.B.A.
from Indiana University.
Morgan Stanley Asset Management, Inc.
Barton M. Biggs has served as portfolio manager of the Fifth Third
International Equity Fund since 1994. He has been Chairman and a Director of
MSAM since 1980 and Managing Director of Morgan Stanley & Co. Incorporated
since 1975. He is also a Director of Morgan Stanley Group, Inc. and a Director
and Officer of six registered investment companies to which MSAM and certain of
its affiliates provides investment advisory services. Mr. Biggs holds a B.A.
from Yale University and an M.B.A. from New York University.
Fund Administration
BISYS serves as the administrator of the Funds. The administrator generally
assists in all aspects of the Funds' administration and operation, including
providing the Funds with certain administrative personnel and services
necessary to operate the Funds, such as legal and accounting services. BISYS
provides these at an annual rate as specified below:
<TABLE>
<CAPTION>
Maximum Average Aggregate Daily
Administrative Fee Net Assets of the Trust
------------------ -----------------------
<S> <C>
0.20% of the first $1 billion
0.18% of the next $1 billion
0.17% in excess of $2 billion
</TABLE>
BISYS may periodically waive all or a portion of its administrative fee which
will cause the yield of a Fund to be higher than it would otherwise be in the
absence of such a waiver.
Pursuant to a separate agreement with BISYS, Fifth Third Bank performs sub-
administrative services on behalf of each Fund, including providing certain
administrative personnel and services necessary to operate the Funds. Fifth
Third Bank receives a fee from BISYS for providing sub-administrative services,
at an annual rate of 0.025% of the average aggregate daily net assets of all
the Funds.
34
<PAGE>
Shareholder Information
Purchasing and Selling Fund Shares
Pricing Fund Shares
The price of Fund shares is based on the Fund's Net Asset Value (NAV). The
value of each portfolio instrument held by the Funds usually is determined
using market prices. Under special circumstances, such as when an event occurs
after the close of the exchange on which a Fund's portfolio securities are
principally traded, which, in the investment manager's opinion has materially
affected the price of those securities, the Fund may use fair value pricing.
Each Fund's NAV is calculated at 4:00 p.m. Cincinnati time each day the New
York Stock Exchange is open for regular trading and the Federal Reserve Bank of
Cleveland is open for business. Each Fund's NAV may change on days when
shareholders will not be able to purchase or redeem Fund shares. The Funds will
be closed on those days that Fifth Third Bank is closed and on the following
holidays: New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day and Christmas.
Purchasing and Adding to Your Shares
You may purchase shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your purchase price will be the next NAV after your purchase order, completed
application and full payment have been received by the Funds or its transfer
agent. All orders must be received by the Funds or its transfer agent prior to
4:00 p.m. Cincinnati time in order to receive that day's NAV.
Institutional Shares only may be purchased through the Trust and Investment
Department of Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, qualified employee retirement plans subject to minimum
requirements that may be established by the distributor of Fund shares, or
broker-dealers, investment advisers, financial planners or other financial
institutions which have an agreement with Fifth Third Bank to place trades for
themselves or their clients for a fee. In order to purchase Institutional
shares through one of those entities, you must have an account with it. That
account will be governed by its own rules and regulations, which may be more
stringent than the rules and regulations governing an investment in the Funds,
and you should consult your account documents for full details. Your shares in
the Funds may be held in an omnibus account in the name of that institution.
The entity through which you are purchasing your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off time
for purchase requests. Consult that entity for specific information. If your
purchase order has been received by the Funds prior to the time designated by
the Funds for receiving orders, you will receive the dividend declared for that
day.
Minimum
Investments
The minimum initial investment in Institutional shares of
the Funds offered by this Prospectus is $1,000. Subsequent
investments must be in amounts of at least $50. An
institutional investor's minimum investment will be
calculated by combining all accounts it maintains with the
Fifth Third Funds.
All purchases must be in U.S. dollars. A fee may be
charged for any checks that do not clear. Third-party
checks are not accepted.
For details, call 1-888-799-5353 or write to: Fifth Third
Funds, c/o Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263.
The Funds may reject a purchase order for any reason.
35
<PAGE>
Shareholder Information
Avoid 31% Tax Withholding
Each Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) in compliance with IRS rules. To
avoid this withholding, make sure you provide your correct Tax Identification
Number .
Selling Your Shares
You may sell your shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your sales price will be the next NAV after your sell order is received by the
Funds, its transfer agent, or your investment representative. All orders must
be received by the Fund or its transfer agent prior to the time the Fund
calculates its NAV in order to receive that day's NAV. If your order has been
received by the Fund prior to the time the Fund calculates its NAV, and your
shares have been sold you will not receive the dividend declared for that day.
Normally you will receive your proceeds within a week after your request is
received.
In order to sell your shares, call the Trust and Investment Department at Fifth
Third Bank, Fifth Third Securities, Inc.--Institutional Investment Division,
the sponsor of your qualified employee retirement plan or the broker-dealer,
investment adviser, financial planner or other institution through which you
purchased your shares.
Postponement of Redemption Payments
Any Fund may delay sending to you redemption proceeds for up to 7 days, or
longer if permitted by the SEC. If you experience difficulty making a telephone
redemption during periods of drastic economic or market change, you can send to
the Funds your request by regular mail to: Fifth Third Funds, P.O. Box 5354,
Cincinnati, Ohio 45201-5354, or by express mail to: Fifth Third Funds, 38
Fountain Square Plaza, Cincinnati, Ohio 45263.
Closing of Small Accounts
If your account falls below $1,000 because of redemptions, a Fund may ask you
to increase your balance. If it is still below the minimum after 30 days, the
Fund may close your account and send you the proceeds at the current NAV.
36
<PAGE>
Shareholder Information
Exchanging Your Shares
You may exchange Instructions for Exchanging Shares
your Fund shares
for Institutional To exchange your shares, call the Trust and Investment
shares of any Department at Fifth Third Bank, Fifth Third Securities,
other Fifth Third Inc.--Institutional Investment Division, the sponsor of
Fund. No your qualified employee retirement plan or the broker-
transaction fees dealer, investment adviser, financial planner or other
are charged for institution through which you purchased your shares for
exchanges. Be exchange procedures or call 1-888-799-5353.
sure to read the
Prospectus Notes on Exchanges
carefully of any
Fund into which To prevent disruption in the management of the Funds,
you wish to market timing strategies and frequent exchange activity
exchange shares. may be limited by the Funds. Although not anticipated,
the Funds may reject exchanges, or change or terminate
You must meet the rights to exchange shares at any time.
minimum
investment Shares of the new Fund must be held under the same
requirements for account name, with the same registration and tax
the Fund into identification numbers, as shares of the old Fund.
which you are
exchanging. The Exchange Privilege (including automatic exchanges)
Exchanges from may be changed or eliminated at any time.
one Fund to
another are The exchange privilege is available only in states where
taxable for shares of the Funds may be sold.
investors subject
to federal or All exchanges are based on the relative net asset value
state income next determined after the exchange order is received by
taxation. the Funds.
Dividends and Capital Gains
All dividends and capital gains will be automatically reinvested unless you
request otherwise. You can receive them in cash or by electronic funds transfer
to your bank account if you are not a participant in an IRA account or in a tax
qualified plan. There are no sales charges for reinvested distributions.
Distributions are made on a per share basis regardless of how long you've owned
your shares. Therefore, if you invest shortly before the distribution date,
some of your investment will be returned to you in the form of a taxable
distribution.
Dividends, if any, are declared and paid monthly by the following funds: Fifth
Third Quality Growth Fund, Fifth Third Equity Income Fund, Fifth Third Bond
Fund for Income, Fifth Third Quality Bond Fund, Fifth Third Government
Securities Fund, Fifth Third Municipal Bond Fund and Fifth Third Ohio Tax Free
Bond Fund. Dividends, if any, are declared and paid quarterly by the following
funds: Fifth Third Cardinal Fund, Fifth Third Pinnacle Fund, Fifth Third
Balanced Fund and Fifth Third Mid Cap Fund. Dividends, if any, are declared and
paid annually by the following Fund: Fifth Third International Equity Fund.
Capital gains, if any, are distributed at least annually.
37
<PAGE>
Shareholder Information
Taxation
Federal Income Tax
Each Fund expects to distribute substantially all of its investment income
(including net capital gains and tax-exempt interest income, if any) to its
shareholders. Unless otherwise exempt or as discussed below, shareholders are
required to pay federal income tax on any dividends and other distributions,
including capital gains distributions received. This applies whether dividends
and other distributions are received in cash or as additional shares.
Distributions representing long-term capital gains, if any, will be taxable to
shareholders as long-term capital gains no matter how long the shareholders
have held the shares. No federal income tax is due on any dividend earned in an
IRA or qualified retirement plan until distributed.
This is a brief summary of certain federal income tax consequences relating to
an investment in the Funds, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under federal, state and
local laws.
Additional Tax Information for Fifth Third Ohio Tax Free Bond Fund
Dividends from Fifth Third Ohio Tax Free Bond Fund representing interest from
obligations held by that Fund which are issued by the State of Ohio or its
subdivisions, which interest is exempt from federal income tax when received by
a shareholder, should also be exempt from Ohio individual income tax as well as
any Ohio municipal income tax even if the municipality is permitted under
current Ohio Law to levy a tax on intangible income. Income from the Fund is
not necessarily free from state income taxes in states other than Ohio or from
personal property taxes.
Additional Tax Information for Fifth Third Municipal Bond Fund
Dividends from Fifth Third Municipal Bond Fund representing net interest income
earned on some temporary investments and any realized net short-term gains are
taxed as ordinary income. Distributions representing net long-term capital
gains realized by Fifth Third Municipal Bond Fund, if any, will be taxable as
long-term capital gains regardless of the length of time shareholders have held
their Shares.
Additional Tax Information for Fifth Third Municipal Bond Fund and Fifth Third
Ohio Tax Free Bond Fund
If a shareholder receives an exempt-interest dividend with respect to any share
and such share is held by the shareholder for six months or less, any loss on
the sale or exchange of such share will be disallowed to the extent of the
amount of such exempt-interest dividend. In certain limited instances, the
portion of social security benefits that may be subject to federal income
taxation may be affected by the amount of tax-exempt interest income, include
exempt-interest dividends, received by a shareholder.
Under state or local law, distributions of investment income may be taxable to
shareholders as dividend income even though a substantial portion of such
distribution may be derived from interest excluded from gross income for
federal income tax purposes that, if received directly, would be exempt from
such income taxes. State laws differ on this issue, and shareholders are urged
to consult their own tax advisors regarding the taxation of their investments
under state and local tax laws.
Interest income from certain types of municipal securities may be subject to
federal alternative minimum tax. To the extent either Fund invests in those
securities, individual shareholders, depending on their own tax status, may be
subject to alternative minimum tax on that part of the Fund's distributions
derived from those securities.
Additional Tax Information for Fifth Third International Equity Fund
Fifth Third International Equity Fund may invest in the stock of certain
foreign corporations that would constitute a passive foreign investment company
(PFIC). Federal income taxes at ordinary net income rates may be imposed on the
Fund upon disposition of PFIC investments.
38
<PAGE>
Shareholder Information
Investment income received by the Fund from sources within foreign countries
may be subject to foreign taxes withheld at the source. The United States has
entered into tax treaties with many foreign countries that entitle the Fund to
reduced tax rates or exemption on this income. The effective rate of foreign
tax cannot be predicted since the amount of the Fund assets to be invested
within various countries is unknown. However, the Fund intends to operate so as
to qualify for treaty-reduced tax rates where applicable.
The Fund intends to qualify so as to allow shareholders to claim a foreign tax
credit or deduction on their federal income tax returns. Shareholders, however,
may be limited in their ability to claim a foreign tax credit. Shareholders who
elect to deduct their portion of the Fund's foreign taxes rather than take the
foreign tax credit must itemize deductions on their federal income tax returns.
39
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Ernst & Young LLP, whose report, along with the Funds' financial
statements, are included in the annual report, which is available upon request.
Fifth Third Quality Growth Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 19.45
- -----------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) (0.02)
Net realized and unrealized gains/(losses) from investments 5.89
- -----------------------------------------------------------------------------
Total from investment operations 5.87
- -----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -
Net realized gain on investments (1.95)
- -----------------------------------------------------------------------------
Total distributions (1.95)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Net asset value, end of period $ 23.37
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Total return (excludes sales charge) 32.08% (a)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.00% (b)
Net investment income/(loss) (0.10%)(b)
Expense waiver/reimbursement(c) 0.05% (b)
- -----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $583,753
Portfolio turnover(d) 34%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
40
<PAGE>
Financial Highlights
Fifth Third Equity Income Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 14.79
- -------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) 0.25
Net realized and unrealized gains from investments 1.86
- -------------------------------------------------------------------
Total from investment operations 2.11
- -------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.26)
In excess of net investment income -
Net realized gain on investments (1.45)
- -------------------------------------------------------------------
Total distributions (1.71)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Net asset value, end of period $ 15.19
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Total return (excludes sales charge) 14.63%(a)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.07%(b)
Net investment income 1.63%(b)
Expense waiver/reimbursement(c) 0.05%(b)
- -------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $148,525
Portfolio turnover(d) 69%
- -------------------------------------------------------------------
- -------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
41
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund***
Institutional Shares
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
July 31, 1999* Sept. 30, 1998 Sept. 30, 1997**
Per share data -------------- -------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of
period $14.86 $ 16.64 $ 12.92
- -------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.04 0.15 0.12
Net realized and unrealized
gains/(losses) from
investments 5.17 0.28 3.70
- -------------------------------------------------------------------------------
Total from investment
operations 5.21 0.43 3.82
- -------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income (0.01) (0.15) (0.10)
In excess of net investment
income - (0.05) -
Net realized gain on
investments (0.55) (2.01) -
- -------------------------------------------------------------------------------
Total distributions (0.56) (2.21) (0.10)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net asset value, end of period $19.51 $ 14.86 $ 16.64
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total return (excludes sales
charge) 35.61%(a) 2.60% 29.77%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 0.82%(b) 0.84% 1.00%
Net investment income/(loss) 0.16%(b) 0.85% 1.04%
Expense waiver/reimbursement(c) 0.07%(b) 0.09% 0.00%
- -------------------------------------------------------------------------------
Supplemental data:
Net assets at end of period
(000s) $6,946 $25,542 $26,881
Portfolio turnover(d) 15% 15% 0.13%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Reflects operations for the period from January 2, 1997 (date of
commencement of operations) to September 30, 1997.
*** Information prior to September 21, 1998 is for the Cardinal Fund, the
predecessor of the Fifth Third Cardinal Fund.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
42
<PAGE>
Financial Highlights
Fifth Third Pinnacle Fund*
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999**
Per share data ---------------
<S> <C>
Net asset value, beginning of period $ 31.26
- --------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) (0.06)
Net realized and unrealized gains from investments 6.71
- --------------------------------------------------------------------
Total from investment operations 6.65
- --------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -
Net realized gain on investments (0.63)
- --------------------------------------------------------------------
Total distributions (0.63)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Net asset value, end of period $ 37.28
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Total return (excludes sales charge) 21.53% (a)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.21% (b)
Net investment income/(loss) (0.24%)(b)
Expense waiver/reimbursement(c) 0.01% (b)
- --------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $61,943
Portfolio turnover(d) 51%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
* Information prior to the period March 9, 1998 is for the Pinnacle Fund, the
predecessor Fund of the Fifth Third Pinnacle Fund.
** Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
43
<PAGE>
Financial Highlights
Fifth Third Balanced Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 14.60
- -------------------------------------------------------------------
Income from investment operations:
Net investment income 0.22
Net realized and unrealized gains from investments 2.27
- -------------------------------------------------------------------
Total from investment operations 2.49
- -------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.22)
Net realized gain on investments (0.74)
- -------------------------------------------------------------------
Total distributions (0.96)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Net asset value, end of period $ 16.13
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Total return (excludes sales charge) 17.63%(a)
- -------------------------------------------------------------------
- -------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.00%(b)
Net investment income/(loss) 1.54%(b)
Expense waiver/reimbursement(c) 0.04%(b)
- -------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $139,616
Portfolio turnover(d) 128%
- -------------------------------------------------------------------
- -------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
44
<PAGE>
Financial Highlights
Fifth Third Mid Cap Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 15.40
- -----------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) (0.04)
Net realized and unrealized gains/(losses) from investments 1.95
- -----------------------------------------------------------------------------
Total from investment operations 1.91
- -----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -
In excess of net investment income -
Net realized gains (1.44)
- -----------------------------------------------------------------------------
Total distributions (1.44)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Net asset value, end of period $ 15.87
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Total return (excludes sales charge) 13.13% (a)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.97% (b)
Net investment income/(loss) (0.26%)(b)
Expense waiver/reimbursement(c) 0.07% (b)
- -----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $191,987
Portfolio turnover(d) 49%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
45
<PAGE>
Financial Highlights
Fifth Third International Equity Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 10.50
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) 0.09
Net realized and unrealized gains/(losses) from investments 2.52
- ----------------------------------------------------------------------------
Total from investment operations 2.61
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.14)
In excess of net investment income (0.10)
Net realized gains (0.07)
- ----------------------------------------------------------------------------
Total distributions (0.31)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net asset value, end of period $ 12.80
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total return (excludes sales charge) 25.02%(a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.50%(b)
Net investment income/(loss) 0.67%(b)
Expense waiver/reimbursement(c) 0.00%(b)
- ----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $172,388
Portfolio turnover(d) 42%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 9, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
46
<PAGE>
Financial Highlights
Fifth Third Bond Fund For Income
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 12.27
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) 0.56
Net realized and unrealized gains/(losses) from investments (0.30)
- ----------------------------------------------------------------------------
Total from investment operations 0.26
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.62)
In excess of net investments -
Net realized gains (0.21)
- ----------------------------------------------------------------------------
Total distributions (0.83)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net asset value, end of period $ 11.70
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total return (excludes sales charge) 2.12%(a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.75%(b)
Net investment income/(loss) 5.12%(b)
Expense waiver/reimbursement(c) 0.03%(b)
- ----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $198,212
Portfolio turnover(d) 104%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
47
<PAGE>
Financial Highlights
Fifth Third Quality Bond Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 10.02
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.48
Net realized and unrealized gains/(losses) from investments (0.38)
- ----------------------------------------------------------------------------
Total from investment operations 0.10
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.49)
In excess of net investments -
Net realized gains (0.11)
- ----------------------------------------------------------------------------
Total distributions (0.60)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net asset value, end of period $ 9.52
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total return (excludes sales charge) 0.88%(a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.75%(b)
Net investment income/(loss) 4.95%(b)
Expense waiver/reimbursement(c) 0.11%(b)
- ----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $133,537
Portfolio turnover(d) 349%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
48
<PAGE>
Financial Highlights
Fifth Third U.S. Government Securities Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 9.89
- ---------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) 0.46
Net realized and unrealized gains/(losses) from investments (0.22)
- ---------------------------------------------------------------------------
Total from investment operations 0.24
- ---------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.49)
- ---------------------------------------------------------------------------
Total distributions (0.49)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Net asset value, end of period $ 9.64
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Total return (excludes sales charge) 2.43%(a)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.75%(b)
Net investment income/(loss) 4.80%(b)
Expense waiver/reimbursement(c) 0.28%(b)
- ---------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $42,239
Portfolio turnover(d) 93%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
49
<PAGE>
Financial Highlights
Fifth Third Municipal Bond Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 12.30
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) 0.47
Net realized and unrealized gains/(losses) from investments (0.32)
- ----------------------------------------------------------------------------
Total from investment operations 0.15
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.47)
In excess of net investment income -
Net realized gains (0.21)
- ----------------------------------------------------------------------------
Total distributions (0.68)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net asset value, end of period $ 11.77
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total return (excludes sales charge) 1.18%(a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.75%(b)
Net investment income/(loss) 3.79%(b)
Expense waiver/reimbursement(c) 0.11%(b)
- ----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $114,923
Portfolio turnover(d) 110%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
50
<PAGE>
Financial Highlights
Fifth Third Ohio Tax Free Bond Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended
July 31, 1999*
Per share data --------------
<S> <C>
Net asset value, beginning of period $ 10.33
- ----------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.40
Net realized and unrealized gains/(losses) from investments (0.24)
- ----------------------------------------------------------------------------
Total from investment operations 0.16
- ----------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (0.40)
In excess on net investment income (0.01)
Net realized gains (0.06)
- ----------------------------------------------------------------------------
Total distributions (0.47)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net asset value, end of period $ 10.02
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total return (excludes sales charge) 1.48%(a)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.82%(b)
Net investment income/(loss) 3.81%(b)
Expense waiver/reimbursement(c) 0.05%(b)
- ----------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $182,679
Portfolio turnover(d) 47%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
51
<PAGE>
Addresses
- --------------------------------------------------------------------------------
Fifth Third Quality Growth Fund Fifth Third Fund
Fifth Third Equity Income Fund c/o Fifth Third Bank
Fifth Third Cardinal Fund 38 Fountain Square Plaza
Fifth Third Pinnacle Fund Cincinnati, Ohio 45263
Fifth Third Balanced Fund
Fifth Third Mid Cap Fund
Fifth Third International Equity Fund
Fifth Third Bond Fund For Income
Fifth Third Quality Bond Fund
Fifth Third U.S. Government Securities Fund
Fifth Third Municipal Bond Fund
Fifth Third Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
Investment Advisor (all Funds Except
Pinnacle Fund) Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Investment Advisor (Pinacle Fund only) Heartland Capital Management, Inc.
251 North Illinois Street Suite 300
Indianapolis, Indiana 46204
- --------------------------------------------------------------------------------
Sub-Advisor(International Equity Fund only) Morgan Stanley Asset Management,
Inc.
1221 Avenue of the America
New York, New York 10020
- --------------------------------------------------------------------------------
Custodian, Transfer Agent, Dividend
Disbursing Agent, and Sub-Administrator Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Distributor and Administrator BISYS Fund Services, L.P.
3435 Stelzer Road
Columbus, Ohio 43219
- --------------------------------------------------------------------------------
Independent Auditors Ernst & Young LLP
1300 Chiquita Center
250 East Fifth Center
Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
<PAGE>
The following additional information is available to you upon request and
without charge.
Annual/Semiannual Reports (Reports):
The Funds' annual and semi-annual reports to shareholders contain additional
information on the Funds' investments.
Statement of Additional Information (SAI): The SAI provides more detailed
information about the Funds, including their operations and investment policies.
It is incorporated by reference and is legally considered a part of this
prospectus.
- --------------------------------------------------------------------------------
You can get free copies of Annual and Semi-Annual Reports, the SAI, prospectus
of other Fifth Third Funds, or request other information and discuss your
questions about the Funds by contacting a broker or other financial institution
that sells the Funds. In addition, you may contact the Funds at:
Fifth Third Funds
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Telephone: 1-888-799-5353
Internet: http://www.53.com*
------------------
- --------------------------------------------------------------------------------
*The Funds' website is not part of this Prospectus.
You can review the Annual and Semi-Annual Reports and the SAI at the Public
Reference Room of the Securities and Exchange Commission. You can get copies:
. For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
. At no charge from the Commission's Website at http://www.sec.gov.
[LOGO]Fifth Third Funds
Investment Company Act file no. 811-5669
<PAGE>
[LOGO OF FIFTH THIRD FUNDS] Fifth Third Funds
[picture]
GOVERNMENT MONEY MARKET FUND
PRIME MONEY MARKET FUND
Fifth Third Funds TAX EXEMPT MONEY MARKET FUND
Money Market Mutual Funds
Investment A Shares
Working Hard to build your wealth!
- --------------------
Prospectus
November 30, 1999
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal
offense.
<PAGE>
Fifth Third Funds Table of Contents
Objectives, Strategies and Risks
- --------------------------------------------------------------------------------
3 Overview
4 The Funds
Shareholder Fees and Fund Expenses
- --------------------------------------------------------------------------------
10 Fee Tables
11 Expense Examples
Additional Information About The Funds'
Investments
- --------------------------------------------------------------------------------
12
Fund Management
- --------------------------------------------------------------------------------
14 Investment Advisor
14 Fund Administration
Shareholder Information
- --------------------------------------------------------------------------------
15 Purchasing and Selling Fund Shares
15 Purchasing and Adding to Your Shares
17 Selling Your Shares
19 Exchanging Your Shares
20 Distribution Arrangements/Sales
Charges
20 Dividends and Capital Gains
20 Taxation
Financial Highlights
- --------------------------------------------------------------------------------
22
Back Cover
- --------------------------------------------------------------------------------
Where to learn more about Fifth Third Funds
2
<PAGE>
Objectives, Strategies And Risks
Overview
This section provides important information about Fifth Third Government Money
Market Fund, Fifth Third Prime Money Market Fund, and Fifth Third Tax Exempt
Money Market Fund (the "Funds"), each a separate series of Fifth Third Funds,
including:
. the investment objective
. principal investment strategies
. principal risks, and
. volatility and performance information
All Funds are managed by Fifth Third Bank.
3
<PAGE>
Fifth Third Government Money Market Fund [LOGO]
Fundamental High current income consistent with stability of principal
Objective and liquidity.
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of total assets in high-
quality securities called "first tier" securities. These
generally will be securities issued or guaranteed as to
principal or interest by the U.S. Treasury or another U.S.
government agency or instrumentality.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment Risks affect the overall yield of the Fund and thus, the return
on your investment. They include factors that cause short-
An investment in term interest rates to decline, such as a weak economy,
the Fund is not strong equity markets and changes by the Federal Reserve
a deposit of in its monetary policies. The Fund's ability to meet
Fifth Third Bank redemption obligations could be burdened by its
or any other investments in securities restricted as to resale.
bank and is not Restricted securities generally trade among institutions
insured or in markets that are not as developed or that do not
guaranteed by function as efficiently as more established markets.
the FDIC or any
other government
agency. Although
the Fund seeks
to preserve the
value of your
investment at
$1.00 per share,
it is possible
to lose money by
investing in
this Fund.
4
<PAGE>
Fifth Third Government Money Market Fund [LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time.
The returns assume that Fund distributions have been reinvested. The table
assumes that Shareholders redeem their Fund shares at the end of the period
indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by Year Total Returns as of 12/31 For Investment A Shares
1992 3.36
1993 2.69
1994 3.84
1995 5.51
1996 4.96
1997 5.10
1998 4.92
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q2 1995 1.38%
Worst quarter: Q4 1993 0.67%
Year to Date Return (1/1/99 to 9/30/99): 3.18%
---------------------------------------------------
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
------------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 11/25/91 4.92% 4.86% N/A 4.34%
</TABLE>
- --------------------------------------------------------------------------------
To obtain current yield information, call 1-888-799-5353.
5
<PAGE>
Fifth Third Prime Money Market Fund [LOGO]
Fundamental Current income consistent with stability of principal.
Objective
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of its total assets in high-
quality securities called "first tier" securities. These
generally will be corporate securities, including
commercial paper, that at the time of purchase are rated
by such firms as Standard & Poor's and Moody's in their
highest short-term major rating categories, or are unrated
securities that are considered equivalent by the Fund's
investment manager. They also may include securities
issued or guaranteed as to principal or interest by the
U.S. Treasury or any U.S. Government agency or
instrumentality.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment Risks affect the overall yield of the Fund and thus, the return
on your investment. They include factors that cause short-
An investment in term interest rates to decline, such as a weak economy,
the Fund is not strong equity markets and changes by the Federal Reserve
a deposit of in its monetary policies. The Fund's ability to meet
Fifth Third Bank redemption obligations could be burdened by its
or any other investments in securities restricted as to resale.
bank and is not Restricted securities generally trade among institutions
insured or in markets that are not as developed or that do not
guaranteed by function as efficiently as more established markets.
the FDIC or any
other government
agency. Although
the Fund seeks
to preserve the
value of your
investment at
$1.00 per share,
it is possible
to lose money by
investing in
this Fund.
6
<PAGE>
Fifth Third Prime Money Market Fund [LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time.
The returns assume that Fund distributions have been reinvested. The table
assumes that Shareholders redeem their Fund shares at the end of the period
indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares
1993 2.69
1994 3.83
1995 5.60
1996 5.04
1997 5.21
1998 5.05
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q2 1995 1.41%
Worst quarter: Q4 1993 0.68%
Year to Date Return (1/1/99 to 9/30/99): 3.26%
--------------------------------------------------
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
-------------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 8/11/92 5.05% 4.94% N/A 4.47%
</TABLE>
- --------------------------------------------------------------------------------
To obtain current yield information, call 1-888-799-5353.
7
<PAGE>
Fifth Third Tax Exempt Money Market Fund [LOGO]
Fundamental Maximize current income, exempt from federal income tax,
Objective while preserving capital and maintaining liquidity.
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of its total assets in high-
quality securities called "first tier" securities. At
least 80% of its total assets are invested in municipal
securities, which include fixed and variable rate debt
obligations issued by various states, their counties,
towns and public authorities. Those securities tend to be:
. general obligation bonds where principal and interest
are paid from general tax revenues received by the
issuer;
. revenue bonds, where principal and interest are paid
only from the revenues received from one or more public
projects or special excise taxes. These bonds tend to
be issued in connection with the financing of
infrastructure projects, such as toll roads and housing
projects, and they are not general obligations of the
issuer;
. industrial development bonds, where principal and
interest are paid only from revenues received from
privately-operated facilities. Generally, these bonds
are issued in the name of a public finance authority to
finance infrastructure to be used by a private entity.
However, they are general obligations of the private
entity, not the issuer.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment affect the overall yield of the Fund and thus, the return
Risks on your investment. They include factors that cause short-
term interest rates to decline, such as a weak economy,
An investment in strong equity markets and changes by the Federal Reserve
the Fund is not in its monetary policies.
a deposit of
Fifth Third Bank Because the Fund's securities are issued by states,
or any other cities, towns and public authorities, the Fund's
bank and is not performance also may be affected by political and economic
insured or conditions at the state or local level. Those conditions
guaranteed by may include state or city budgetary problems, declines in
the FDIC or any the tax base and, generally, any factor that may cause
other government rating agencies to downgrade the credit ratings on state
agency. Although or municipal securities. Actual or proposed changes in tax
the Fund seeks rates, regulations or government-sponsored programs also
to preserve the could affect the yield on your investment.
value of your
investment at The Fund's ability to meet redemption obligations could be
$1.00 per share, burdened by its investments in securities restricted as to
it is possible resale. Restricted securities generally trade among
to lose money by institutions in markets that are not as developed or that
investing in do not function as efficiently as more established
this Fund. markets.
8
<PAGE>
Fifth Third Tax Exempt Money Market Fund [LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time.
The returns assume that Fund distributions have been reinvested. The table
assumes that Shareholders redeem their Fund shares at the end of the period
indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares/1/
1989 5.81
1990 5.14
1991 3.95
1992 2.42
1993 1.81
1994 2.10
1995 2.95
1996 2.72
1997 2.75
1998 2.68
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q2 1989 1.45%
Worst quarter: Q3 1994 0.45%
Year to Date Return (1/1/99 to 9/30/99): 1.99%
-----------------------------------------------------
Average Annual
Total Returns
(for the periods ended
December 31, 1998)
----------------------
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares/1/ 9/7/83 2.68% 2.64% 3.22% 3.72%
</TABLE>
- --------------------------------------------------------------------------------
To obtain current yield information, call 1-888-799-5353.
- ------
/1/For periods prior to September 21, 1998, reflects performance of Investor
Shares of Cardinal Tax Exempt Money Market Fund. On September 21, 1998, that
fund, a registered open-end investment company managed by The Ohio Company,
was merged into Fifth Third Tax Exempt Money Market Fund.
9
<PAGE>
Shareholder Fees and Fund Expenses [LOGO]
Fee Tables
These tables describe the fees and expenses that you may pay if you buy and
hold Investment A Shares of the Funds.
Shareholder fees are paid by you at the time you purchase or sell your shares.
Annual Fund operating expenses are paid out of Fund assets, and are reflected
in the share price. Each Fund's fees and expenses are based upon the Fund's
operating expenses for the fiscal year ended July 31, 1999.
Shareholder Fees
<TABLE>
<CAPTION>
Money Market Funds--Fee Table
-----------------------------
Fifth Third Fifth Third Fifth Third
Government Prime Money Tax Exempt Money
Money Market Market Market
Fund Fund Fund
<S> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed on
Purchases None None None
- --------------------------------------------------------------------------
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends None None None
- --------------------------------------------------------------------------
Maximum Deferred Sales
Load None None None
- --------------------------------------------------------------------------
Annual Fund Operating
Expenses
(as a percentage of
average net assets)
Management fees 0.40% 0.40% 0.50%
- --------------------------------------------------------------------------
Distribution/Service
(12b-1) fees 0.25% 0.25% 0.25%
- --------------------------------------------------------------------------
Other expenses 0.27% 0.23% 0.44%
- --------------------------------------------------------------------------
Total Annual Fund
Operating Expenses 0.92% 0.88% 1.19%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Because some of the fund's expenses have been reduced
through expense waivers and reimbursements, actual
total operating expenses for the prior year would have
been as shown below.
Net Total Annual Fund
Operating Expenses 0.75% 0.75% 0.75%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Shareholder Fees and Fund Expenses [LOGO]
Expense Examples
Use the tables below to compare fees and expenses with the fees and expenses of
other mutual funds. The tables illustrate the amount of fees and expenses you
and the Fund would pay, assuming a $10,000 initial investment, 5% annual
return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Amounts are presented assuming redemption at the end of
each period. Because these examples are hypothetical and for comparison only,
your actual costs may be different.
Money Market Funds
<TABLE>
<CAPTION>
Fifth Third
Government 1 3 5 10
Money Market Fund Year Years Years Years
-----------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $ 94 $293 $509 $1,131
-----------------------------------------
<CAPTION>
Fifth Third Prime 1 3 5 10
Money Market Fund Year Years Years Years
-----------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $ 90 $281 $488 $1,084
-----------------------------------------
<CAPTION>
Fifth Third Tax
Exempt Money Market 1 3 5 10
Fund Year Years Years Years
-----------------------------------------
<S> <C> <C> <C> <C>
Investment A Shares $121 $378 $654 $1,443
------------------------------------------
</TABLE>
11
<PAGE>
Additional Information About the Funds' Investments
The primary investments and investment strategies of the Funds are described
above. Below are descriptions of some additional investments and strategies of
the Funds, some of their risks as well as other risks of investing in the
Funds. A list of each Fund's investments is included in the Funds' most recent
annual or semi-annual report to shareholders. Please note, though, that a Fund
may adjust the composition of its portfolio as market and economic conditions
change.
The success of achieving each Fund's investment strategy depends on Fifth Third
Bank's ability to assess the potential of the securities in which the Fund
invests as well as to evaluate and anticipate changing economic and market
conditions.
Foreign Foreign bonds and instruments of foreign banks generally
Investments have more risk than their domestic counterparts, in part
(Applies to all because of higher political and economic risks and the
Funds) general lack of reliable information. All foreign
securities purchased by a Fund are denominated in U.S.
dollars.
Securities When securities are rated by one or more independent
Ratings rating agencies, each Fund uses these ratings to determine
(Applies to all credit quality. In cases where a security has received a
Funds) rating from only one independent rating agency, it may
rely on that rating. If a security has received ratings
from two or more rating agencies and at least two of the
ratings are equivalent, the Fund may rely on the two
equivalent ratings even if the other ratings are lower. In
cases where a security's two highest ratings are in
conflicting categories, the Fund must follow the lower
rating. If a security is unrated, the Fund may assign it
to a given category based on its own credit research.
Repurchase Each Fund may enter into repurchase agreements. A
Agreements repurchase agreement is an agreement in which a Fund buys
(Applies to all securities from a bank or other financial institution and
Funds) agrees to sell it back at a specified time and place. The
risks of repurchase agreements include the risk that a
counterparty will not buy back the securities as required
and the securities decline in value. To mitigate those
risks, the Funds intend to enter repurchase agreements
only with high quality counterparties and purchase only
high quality, short-term debt securities.
Securities Each Fund may seek additional income or fees by lending
Lending portfolio securities to qualified institutions. By
(Applies to all reinvesting any cash collateral it receives in these
Funds) transactions, a Fund could realize additional gains or
losses. If the borrower fails to return the securities and
the invested collateral has declined in value, a Fund
could lose money.
Restricted and Any securities that are thinly traded or whose resale is
Illiquid restricted can be difficult to sell at a desired time and
Securities price. Some of those securities are new and complex, and
(Applies to all trade only among institutions; the markets for these
Funds) securities are still developing and may not function as
efficiently as established markets. Owning a large
percentage of restricted or illiquid securities could
hamper a Fund's ability to raise cash in order to meet
redemptions. Also, because there may not be an established
market price for these securities, a Fund may have to
estimate their value, which means that their valuation
(and, to a much smaller extent, the valuation of the Fund)
may have a subjective element.
12
<PAGE>
Additional Information About the Funds' Investments
Derivatives Derivatives are financial instruments whose value derives
(Applies to all from one or more securities. Certain instruments that are
Funds) "first" or "second tier" securities also may be
derivatives, such as short-term, high-quality asset-backed
securities. Each Fund uses derivatives to invest for
potential income, and may purchase them to the extent it
can purchase any other type of "first" or "second tier"
security. The values of some derivatives are difficult to
determine because they are based on the values of other
securities and the markets for some derivatives may be
limited. With some derivatives, such as certain option
contracts, there is also the risk that the counterparty
may fail to honor its contract terms, causing a loss for
the Fund.
When-Issued Each Fund may invest in securities prior to their date of
Securities issue. These securities could fall in value by the time
(Applies to all they are actually issued, which may be any time from a few
Funds) days to over a year.
Year 2000 Fifth Third Bank and BISYS Fund Services Limited
(Applies to all Partnership ("BISYS"), the Fund's administrator, do not
Funds) currently anticipate that computer problems related to the
year 2000 will have a material effect on any Fund. There
can be no assurances in this area, however, and although
Fifth Third Funds and BISYS have undertaken significant
projects to minimize the risk of year 2000 computer
problems, some factors, including the year 2000 compliance
of Fifth Third Fund's and BISYS's suppliers, are not
within their direct control and could negatively affect
communications systems, investment markets or the economy
in general.
13
<PAGE>
Money Market Investment A Shares
Investment Advisor
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, serves as
investment advisor to all Funds.
As of September 30, 1999, Fifth Third Bank had approximately $18 billion of
assets under management, including approximately $4.6 billion of assets of
Fifth Third Funds.
The management fees paid by the Funds for the fiscal year ended July 31, 1999
were as follows:
<TABLE>
<CAPTION>
As a percentage of
average net assets
- ------------------------------------------------------------
<S> <C>
Fifth Third Government Money Market Fund 0.40%
- ------------------------------------------------------------
Fifth Third Prime Money Market Fund 0.38%
- ------------------------------------------------------------
Fifth Third Tax Exempt Money Market Fund 0.36%
- ------------------------------------------------------------
</TABLE>
Fund Administration
BISYS serves as the administrator of the Funds. The administrator generally
assists in all aspects of the Funds' administration and operation, including
providing the Funds with certain administrative personnel and services
necessary to operate the Funds, such as legal and accounting services. BISYS
provides these at an annual rate as specified below.
<TABLE>
<CAPTION>
Maximum Average Aggregate Daily
Administrative Fee Net Assets of the Trust
------------------ -----------------------
<S> <C>
0.20% of the first $1 billion
0.18% of the next $1 billion
0.17% in excess of $2 billion
</TABLE>
BISYS may periodically waive all or a portion of its administrative fee which
will cause the yield of a Fund to be higher than it would otherwise be in the
absence of such a waiver.
Pursuant to a separate agreement with BISYS, Fifth Third Bank performs sub-
administrative services on behalf of each Fund, including providing certain
administrative personnel and services necessary to operate the Funds. Fifth
Third Bank receives a fee from BISYS for providing sub-administrative services
at an annual rate of 0.025% of the average aggregate daily net assets of the
Funds.
14
<PAGE>
Shareholder Information
Purchasing and Selling Fund Shares
Pricing Fund Shares
The price of a Fund's shares is based on the Fund's Net Asset Value (NAV). The
value of each portfolio instrument held by the Funds is determined by using
amortized cost.
Fifth Third Tax Exempt Money Market Fund calculates its NAV at 9 a.m. Fifth
Third Government Money Market calculates its NAV at 11 a.m. Fifth Third Prime
Money Market Fund calculates its NAV at 1 p.m. All times are Cincinnati time.
Each Fund's NAV is calculated each day the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
The Funds will be closed on those days that Fifth Third Bank is closed and on
the following holidays: New Year's Day, Martin Luther King Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving Day and Christmas.
Purchasing and Adding to Your Shares
You may purchase shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your purchase price will be the next NAV after your purchase order and full
payment have been received by the Funds or its transfer agent. All orders must
be received by the Funds or its transfer agent on the following schedule
(Cincinnati time) in order to receive that day's NAV: Fifth Third Tax Exempt
Money Market Fund--9 a.m.; Fifth Third Government Money Market--11 a.m.; and
Fifth Third Prime Money Market Fund--1 p.m.
You may purchase Investment A shares through Fifth Third Securities, Inc. as
well as financial institutions which have a sales agreement with the
distributor of Fund shares. In order to purchase Investment A shares through
Fifth Third Securities, Inc. or another financial institution, you must open an
account with that institution. That account will be governed by its own rules
and regulations, which may be more stringent than the rules and regulations
governing an investment in the Funds, and you should consult your account
documents for full details. Your shares in the Funds will be held in an omnibus
account in the name of that institution. (Special rules apply for former
shareholders of the Cardinal Funds and the Pinnacle Fund. See below.)
The entity through which you are purchasing your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off time
for purchase requests. Consult that entity for specific information. If your
purchase order has been received by the Funds prior to the time designated by
the Funds for receiving orders on a specific day, you will receive the dividend
declared for that day.
Minimum
Investments
The minimum initial investment in Investment A Shares of
the Funds offered by this Prospectus is $1,000. Subsequent
investments must be in amounts of at least $50.
All purchases must be in U.S. dollars. A fee may be
charged for any checks that do not clear. Third-party
checks are not accepted.
For details, call 1-888-799-5353 or write to: Fifth Third
Funds, c/o Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263.
The Funds may reject a purchase order for any reason.
Systematic Investment Program
You may make monthly systematic investments in Investment A shares of the Funds
from your bank account. There is no minimum amount required for initial amounts
into the Funds. You may elect to make systematic investments on the 15th of
each month, the last business day of each month, or both. If the 15th or the
last business day of the month is not a day on which the Funds are open for
business, the purchase will be made on the previous day the Funds are open for
business. Please contact Fifth Third Securities, Inc. or your financial
institution for more information.
15
<PAGE>
Shareholder Information
Avoid 31% Tax Withholding
Each Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) in compliance with IRS rules. To
avoid this withholding, make sure you provide your correct Tax Identification
Number.
- -------------------------------------------------------------------------------
Instructions for Purchases by Former Cardinal Funds and Pinnacle Fund
Shareholders
If you held in your name (rather than through a brokerage account) shares of
any of the Cardinal Funds or The Pinnacle Fund at the time those funds were
merged into one of the Fifth Third Funds, and you continue to hold in your name
the shares of the Fifth Third Fund that you received in the merger or by way of
a subsequent exchange, you may purchase additional shares of that Fifth Third
Fund directly from the Funds rather than through Fifth Third Securities, Inc.
or another financial institution. The Funds reserve the right to change or
eliminate these privileges at any time.
By Mail For Subsequent Investments:
1. Use the investment slip attached to your account statement.
Or, if unavailable, provide the following information:
. Fund name
. Share class
. Amount invested
. Account name and account number
2. Make check, bank draft or money order payable to "Fifth
Third Funds" and include your account number on the check.
3. Mail or deliver investment slip and full payment to the
following address:
By Regular Mail: By Express Mail:
Fifth Third Funds Fifth Third Funds
P.O. Box 5354 312 Walnut Street, 21st Floor
Cincinnati, OH 45201-5354 Cincinnati, OH 45202-3874
By Wire
Transfer For Subsequent Investments:
Instruct your bank to wire transfer your investment to:
Money Market
Fifth Third Bank
ABA 042000314
Credit Fifth Third Funds 999-42611
FFC: Shareholder name, Fund name, and Account number
Note: Your bank may charge a wire transfer fee.
Systematic To begin making systematic investments or to increase the
Investment amounts you already are investing:
Program
.Write a letter of instruction indicating:
. Your bank name, address, account number, and ABA routing
number
. The amount you wish to invest automatically
.Attach a voided personal check.
.Mail To:
Fifth Third Funds
P. O. Box 5354
Cincinnati, Ohio 45201-5354
- --------------------------------------------------------------------------------
16
<PAGE>
Shareholder Information
- --------------------------------------------------------------------------------
Selling Your Shares
You may sell your shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your sales price will be the next NAV after your sell order is received by the
Funds, its transfer agent, or your investment representative. All orders must
be received by the Funds or its transfer agent prior to the time the Fund
calculates its NAV in order to receive that day's NAV. If your order has been
received by the Fund prior to the time the Fund calculates its NAV, and your
shares have been sold you will not receive the dividend declared for that day.
Normally you will receive your proceeds within a week after your request is
received.
You may sell Investment A shares through Fifth Third Securities, Inc. or the
financial institution through which you purchased them. (Special rules apply
for certain former shareholders of the Cardinal Funds and the Pinnacle Fund.
See below.)
The entity through which you are selling your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off for
sale requests. Consult that entity for specific information. If your sell order
has been received by the Funds prior to the time designated by the Funds for
receiving orders on a specific day, you will not receive the dividend declared
for that day.
Systematic Withdrawal Plan
You may make automatic withdrawals on a monthly, quarterly or annual basis on
the last day of that period that the Funds are open for business. Please
contact Fifth Third Securities, Inc. or your financial institution for more
information.
Postponement of Redemption Payments
Any Fund may delay sending to you redemption proceeds for up to 7 days, or
longer if permitted by the SEC. If you experience difficulty making a telephone
redemption during periods of drastic economic or market change, you can send to
the Funds your request by regular mail to: Fifth Third Funds, P.O. Box 5354,
Cincinnati, Ohio 45201-5354, or by express mail to: Fifth Third Funds, 312
Walnut Street, 21st Floor, Cincinnati, Ohio 45202-3874.
Instructions for Sales by Former Cardinal Fund or Pinnacle Fund Shareholders
If you held in your name (rather than through a brokerage account)shares of any
of the Cardinal Funds or The Pinnacle Fund at the time those funds were merged
into one of the Funds, and you continue to hold in your name the shares of the
Fifth Third Fund you received in the merger or by way of a subsequent exchange,
you may sell your Fifth Third Fund shares directly by contacting the Funds
rather than through Fifth Third Securities, Inc. or another financial
institution.
By telephone Call 1-800-282-5706 with
Shares may be instructions as to how you wish
redeemed in any to receive your funds (mail,
amount less than wire). The Funds make every
$50,000 by effort to insure that telephone
telephone. redemptions are only made by
authorized traders. All
telephone calls are recorded for
your protection and you will be
asked for information to verify
your identity.
By mail 1. Write a letter of instruction indicating:
. your Fund and account number
. amount you wish to redeem
. address where your check should be sent
. account owner(s) signature
2. Mail to:
Fifth Third Funds
P.O. Box 5354
Cincinnati, Ohio 45201-5354
17
<PAGE>
Shareholder Information
- --------------------------------------------------------------------------------
By overnight 1. Write a letter of instruction indicating:
service . your fund and account number
. amount you wish to redeem
. address where you want check to be sent
. account owner(s) signature
2. Send to:
Fifth Third Funds
312 Walnut Street, 21st Floor
Cincinnati, OH 45202-3874
By wire transfer Call 1-800-282-5706 to request a
(Option available wire transfer.
only if
previously set up
on account.)
If you call by the time
designated by the Funds, your
payment will normally be wired
to your bank on the next
business day.
The Fund charges a wire transfer
fee of $8.
Note: Your financial institution
may also charge a separate fee.
Systematic To activate this feature call 1-800-282-5706.
Withdrawal Plan
When Written Redemption Requests are Required
You must request redemptions in writing in the following situations:
1. Redemptions from Individual Retirement Accounts ("IRAs").
2. Redemption requests requiring a signature guarantee, which include each of
the following.
. Redemptions over $50,000
. Your account address has changed within the last 30 days
. The check is not being mailed to the address on your account
. The check is not being made payable to the owner of the account
. The redemption proceeds are being transferred to another Fund account with
a different registration
. The redemption proceeds are being wired to instructions currently not on
your account
Signature guarantees may be obtained from a U.S. stock exchange member, a U.S.
commercial bank or trust company, or any other financial institution that is a
member of the STAMP (Securities Transfer Agents Medallion Program), MSP (New
York Stock Exchange Medallion Signature Program) or SEMP (Stock Exchanges
Medallion Program). Members are subject to dollar limitations, which must be
considered when requesting their guarantee. The Transfer Agent may reject any
signature guarantee if it believes the transaction would otherwise be
improper.
The Trust does not accept signatures guaranteed by a notary public.
Redemptions Within 15 Days of Initial Investment
When you have made your initial investment by check, you cannot redeem any
portion of it until the Transfer Agent is satisfied that the check has cleared
(which may require up to 15 business days). You can avoid this delay by
purchasing shares with a certified check, or by wire.
Closing of Small Accounts
If your account falls below $1,000 because of redemptions, a Fund may ask you
to increase your balance. If it is still below the minimum after 30 days, the
Fund may close your account and send you the proceeds at the current NAV.
18
<PAGE>
Shareholder Information
Exchanging Your Shares
You may exchange your Fund shares for Investment A shares of any other Fifth
Third Fund. No transaction fees are charged for exchanges. Be sure to read the
Prospectus carefully of any Fund into which you wish to exchange shares.
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one Fund to another are taxable for investors
subject to federal or state income taxation. These procedures apply only to
exchanges between existing accounts.
Automatic Exchanges
You can use the Funds' Automatic Exchange feature to purchase shares of the
Funds at regular intervals through regular, automatic redemptions from a Fund.
To participate in the Automatic Exchange Program or to change the Automatic
Exchange instructions on an existing account, contact Fifth Third Securities,
Inc. or your financial institution.
If exchanging shares through Fifth Third Securities, Inc. or your financial
institution, ask it for exchange procedures or call 1-888-799-5353. (Special
rules apply for former shareholders of The Cardinal Group. See below.)
Notes on exchanges
To prevent disruption in the management of the Funds, market timing strategies
and frequent exchange activity may be limited by the Funds. Although not
anticipated, the Funds may reject exchanges, or change or terminate rights to
exchange shares at any time.
When exchanging from a Fund that has no sales charge or a lower sales charge to
a Fund with a higher sales charge, you will pay the difference.
Shares of the new Fund must be held in the same account names, with the same
registration and tax identification numbers, as the shares of the old Fund.
The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time.
The exchange privilege is available only in states where shares of the Funds
may be sold.
All exchanges are based on the relative net asset value next determined after
the exchange order is received by the Funds.
- --------------------------------------------------------------------------------
Instructions for Exchanges by Former Cardinal Funds and The Pinnacle Fund
Shareholders
If you held in your name (rather than through a brokerage account) shares of
any of the Cardinal Funds or The Pinnacle Fund at the time those funds were
merged into one of the Funds, and you continue to hold in your name the shares
of the Fifth Third Fund you received in the merger or by way of a subsequent
exchange, you may exchange your Fifth Third Fund shares for Investment A shares
of any other Fifth Third Fund directly by contacting the Funds rather than
going through Fifth Third Securities, Inc. or another financial institution.
To make an exchange, send a written request to Fifth Third Funds, P.O. Box
5354, Cincinnati, OH 45201-5354, or by call 1-800-282-5706. Please provide the
following information:
. Your name and telephone number
. The exact name on your account and account number
. Taxpayer identification number (usually your Social Security number)
. Dollar value or number of shares to be exchanged
. The name of the Fund from which the exchange is to be made
. The name of the Fund into which the exchange is being made
Automatic Exchanges
To participate in the Automatic Exchange or to change the Automatic Exchange
instructions on an existing account or to discontinue the feature, write to:
Fifth Third Funds, P.O. Box 5354, Cincinnati, Ohio 45201-5354.
If shares of a Fund are purchased by check, those shares cannot be exchanged
until your check has been collected. This could take 15 days or more.
- --------------------------------------------------------------------------------
19
<PAGE>
Shareholder Information
Distribution
Arrangements/Sales This section describes the sales charges and fees you
Charges will pay as an investor in different share classes
offered by the Funds and ways to qualify for reduced
sales charges.
<TABLE>
<CAPTION>
Investment A
<S> <C>
Sales Charge (Load) None
Distribution/Service Subject to annual distribution and
(12b-1) Fee shareholder servicing fees of up to
0.25% of the Fund's assets.
</TABLE>
Calculation of Investment A Shares are sold at their public offering
Sales Charges price. There is no sales charge associated with the
purchase of those shares. There also is no sales charge
on reinvested dividends and capital gains.
Distribution/Service 12b-1 fees compensate the Distributor and other dealers
(12b-1) Fees and investment representatives for services and expenses
related to the sale and distribution of the Fund's shares
and/or for providing shareholder services.
12b-1 fees are paid from Fund assets on an ongoing basis,
and will increase the cost of your investment.
12b-1 fees may cost you more than paying other types of
sales charges.
Over time shareholders will pay more than the equivalent
of the maximum permitted front-end sales charge because
12b-1 distribution and service fees are paid out of the
Fund's assets on an on-going basis.
Dividends and All dividends and capital gains will be automatically
Capital Gains reinvested unless you request otherwise. You can receive
them in cash or by electronic funds transfer to your bank
account if you are not a participant in an IRA account or
in a tax qualified plan. There are no sales charges for
reinvested distributions.
Dividends, if any, are declared daily and paid monthly.
Capital gains, if any, are distributed at least annually.
No Fund expects to pay any capital gains.
Taxation
Federal Income Tax
Each Fund expects to distribute substantially all of its investment income
(including net capital gains and tax-exempt interest income, if any) to its
shareholders. Unless otherwise exempt or as discussed below in the case of
Fifth Third Tax Exempt Money Market Fund, shareholders are required to pay
federal income tax on any dividends and other distributions, including capital
gains distributions received. This requirement applies whether dividends and
other distributions are received in cash or as additional shares. No federal
income tax is due on any dividend earned in an IRA or qualified retirement plan
until distributed.
This is a brief summary of certain federal income tax consequences relating to
an investment in the Funds, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under federal, state and
local laws.
20
<PAGE>
Shareholder Information
Additional Tax Information for Fifth Third Tax Exempt Money Market Fund
Dividends derived from interest earned on municipal securities, the interest on
which is excluded from gross income for federal income tax purposes, including
insurance proceeds representing maturing interest on defaulted municipal
securities the interest on which would be so excluded, constitute "exempt-
interest dividends" when designated as such by Fifth Third Tax Exempt Money
Market Fund and will be excluded from gross income for federal income tax
purposes. However, interest excluded from gross income for federal income tax
purposes that is received by individuals and corporations on certain municipal
obligations issued on or after August 8, 1986, to finance certain private
activities will be treated as tax preference items in computing the alternative
minimum tax. Exempt interest dividends received by shareholders from Fifth
Third Tax Exempt Money Market Fund will also be treated as tax preference items
in computing the alternative minimum tax to the extent, if any, that
distributions by the Fund are attributable to interest earned it on such
obligations. Also, a portion of all other interest excluded from gross income
for federal income purposes earned by a corporation may be subject to the
alternative minimum tax as a result of the inclusion in alternative minimum
taxable income of 75% of the excess of adjusted current earnings over adjusted
net book income.
Distributions, if any, derived from capital gains will generally be taxable to
shareholders as capital gains for federal income tax purposes to the extent so
designated by Fifth Third Tax Exempt Money Market Fund. Dividends, if any,
derived from sources other than interest excluded from gross income for federal
income tax purposes and capital gains will be taxable to shareholders as
ordinary income for federal income tax purposes whether or not reinvested in
additional shares. Shareholders not subject to federal income tax on their
income will not, of course, be required to pay federal income tax on any
amounts distributed to them. Fifth Third Tax Exempt Money Market Fund
anticipates that substantially all of its dividends will be excluded from gross
income for federal income tax purposes and will not be a preference item for
individuals for the purposes of the federal alternative minimum tax.
If a shareholder receives an exempt-interest dividend with respect to any share
and such share is held by the shareholder for six months or less, any loss on
the sale or exchange of such share will be disallowed to the extent of the
amount of such exempt-interest dividend. In certain limited instances, the
portion of Social Security benefits that may be subject to federal income
taxation may be affected by the amount of tax-exempt interest income, including
exempt-interest dividends, received by a shareholder.
Under state or local law, distributions of investment income may be taxable to
shareholders as dividend income even though a substantial portion of such
distribution may be derived from interest excluded from gross income for
federal income tax purposes that, if received directly, would be exempt from
such income taxes. Fifth Third Tax Exempt Money Market Fund will report to its
shareholders annually after the close of its taxable year the percentage and
source, on a state-by-state basis, of interest income earned on municipal
securities held by the Fund during the preceding year. State laws differ on
this issue, and shareholders are urged to consult their own tax advisors
regarding the taxation of their investments under state and local tax laws.
21
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Ernst & Young LLP, whose report, along with the Funds' financial
statements, are included in the Funds' annual report, which is available upon
request.
Fifth Third Government Money Market Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------------
1999 1998 1997 1996 1995
Per share data -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.04 0.05 0.05 0.05 0.05
- ---------------------------------------------------------------------------------
Total from investment
operations 0.04 0.05 0.05 0.05 0.05
- ---------------------------------------------------------------------------------
Less distributions
Distributions to shareholders
from net investment income (0.04) (0.05) (0.05) (0.05) (0.05)
- ---------------------------------------------------------------------------------
Total distributions (0.04) (0.05) (0.05) (0.05) (0.05)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Total return 4.41% 5.13% 5.00% 5.11% 5.22%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.75% 0.52% 0.51% 0.51% 0.50%
Net investment income 4.26% 5.02% 4.90% 4.97% 5.17%
Expense waiver/reimbursement
(a) 0.17% 0.47% 0.44% 0.42% 0.45%
- ---------------------------------------------------------------------------------
Supplemental data
Net assets, end of period
(000s) $381,105 $150,286 $110,543 $ 68,884 $ 45,726
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
22
<PAGE>
Financial Highlights
Fifth Third Prime Money Market Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------------
1999 1998 1997 1996 1995
Per Share Data -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.04 0.05 0.05 0.05 0.05
- -------------------------------------------------------------------------------
Total from investment
operations 0.04 0.05 0.05 0.05 0.05
- -------------------------------------------------------------------------------
Less distributions
Distributions to
shareholders from net
investment income (0.04) (0.05) (0.05) (0.05) (0.05)
- -------------------------------------------------------------------------------
Total distributions (0.04) (0.05) (0.05) (0.05) (0.05)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total return 4.53% 5.25% 5.11% 5.20% 5.25%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets
Expenses 0.75% 0.52% 0.52% 0.49% 0.49%
Net investment income 4.39% 5.13% 4.99% 5.06% 5.12%
Expense
waiver/reimbursement(a) 0.13% 0.47% 0.44% 0.40% 0.44%
Supplemental data
- -------------------------------------------------------------------------------
Net assets, end of period
(000s) $ 75,024 $ 36,552 $ 33,438 $ 19,341 $ 10,169
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
23
<PAGE>
Financial Highlights
Fifth Third Tax Exempt Money Market Fund
Investment A Shares**
<TABLE>
<CAPTION>
Period
Ended
July Year Ended September 30,
31, -------------------------------------------
1999* 1998 1997 1996 1995 1994
Per Share Data ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.03 0.03 0.03 0.03 0.03 0.02
- ----------------------------------------------------------------------------------
Total from investment
operations 0.03 0.03 0.03 0.03 0.03 0.02
- ----------------------------------------------------------------------------------
Less distributions
Distributions to
shareholders from net
investment income (0.03) (0.03) (0.03) (0.03) (0.03) (0.02)
- ----------------------------------------------------------------------------------
Total distributions (0.03) (0.03) (0.03) (0.03) (0.03) (0.02)
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total return 2.18%(c) 2.74% 2.72% 2.67% 3.02% 1.78%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data
Ratios to Average Net
Assets
Expenses 0.75%(b) 0.71% 0.80% 0.89% 0.81% 0.76%
Net investment income 2.60%(b) 2.88% 2.79% 2.66% 2.99% 1.78%
Expense
waiver/reimbursement(a) 0.44%(b) - - - - -
- ----------------------------------------------------------------------------------
Supplemental data
Net assets, end of
period (000s) $26,715 $44,494 $60,284 $59,915 $64,780 $80,531
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Information for the period prior to September 21, 1998 is for the Tax
Exempt Money Market Fund, the predecessor fund of Fifth Third Tax Exempt
Money Market Fund.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized
(c) Not annualized
24
<PAGE>
Addresses
- --------------------------------------------------------------------------------
Fifth Third Government Money Market Fund Fifth Third Funds
Fifth Third Prime Money Market Fund c/o Fifth Third Bank
Fifth Third Tax Exempt Money Market Fund 38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Investment Advisor Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Custodian, Transfer Agent, Dividend
Disbursing Agent, and Sub-Administrator Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Distributor and Administrator BISYS Fund Services, L.P.
3435 Stelzer Road
Columbus, Ohio 43219
- --------------------------------------------------------------------------------
Independent Auditors Ernst & Young LLP
1300 Chiquita Center
250 East Fifth Street
Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
<PAGE>
The following additional information is available to you upon request and
without charge.
Annual/Semiannual Reports (Reports):
The Funds' annual and semi-annual reports to shareholders contain additional
information on the Funds' investments.
Statement of Additional Information (SAI): The SAI provides more detailed
information about the Funds, including their operations and investment policies.
It is incorporated by reference and is legally considered a part of this
prospectus.
- --------------------------------------------------------------------------------
You can get a free copies of Annual and Semi-Annual Reports, the SAI,
prospectuses of other Fifth Third Funds, or request other information and
discuss your questions about the Funds by contacting a broker or other financial
institution that sells the Funds. In addition, you may contact the Funds at:
Fifth Third Funds
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Telephone: 1-888-799-5353
Internet: http://www.53.com*
------------------
- --------------------------------------------------------------------------------
*The Funds' website is not part of this prospectus.
You can review the Annual and Semi-Annual Reports and the SAI at the Public
Reference Room of the Securities and Exchange Commission. You can get copies:
. For a fee, by writting the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
. At no charge from the Commission's Website at http://wwww.sec.gov.
[LOGO OF FIFTH THIRD FUNDS]
Investment Company Act file no. 811-5669
<PAGE>
[LOGO OF FIFTH THIRD FUNDS]
[PICTURE]
GOVERNMENT MONEY MARKET FUND
PRIME MONEY MARKET FUND
Fifth Third Funds TAX EXEMPT MONEY MARKET FUND
Money Market Mutual Funds U.S. TREASURY MONEY MARKET FUND
Institutional Shares
Working hard to build your wealth!
- ----------------
Prospectus
November 30, 1999
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus
is accurate or complete. Any representation to the contrary is a criminal
offense.
<PAGE>
Fifth Third Funds Table of Contents
<TABLE>
<CAPTION>
Objectives, Strategies and Risks
- --------------------------------------------------
<S> <C>
3 Overview
4 The Funds
<CAPTION>
Shareholder Fees and Fund Expenses
- --------------------------------------------------
<S> <C>
12 Fee Tables
13 Expense Examples
<CAPTION>
Additional Information About the Funds'
Investments
- --------------------------------------------------
<S> <C>
14
<CAPTION>
Fund Management
- --------------------------------------------------
<S> <C>
16 Investment Advisor
16 Fund Administration
<CAPTION>
Shareholder Information
- --------------------------------------------------
<S> <C>
17 Purchasing and Selling Fund Shares
17 Purchasing and Adding to Your Shares
18 Selling Your Shares
19 Exchanging Your Shares
19 Dividends and Capital Gains
20 Taxation
<CAPTION>
Financial Highlights
- --------------------------------------------------
<S> <C>
21
<CAPTION>
Back Cover
- --------------------------------------------------
<S> <C>
Where to learn more about Fifth Third
Funds
</TABLE>
2
<PAGE>
Objectives, Strategies and Risks
Overview
This section provides important information about Fifth Third Government Money
Market Fund, Fifth Third Prime Money Market Fund, Fifth Third Tax Exempt Money
Market Fund and Fifth Third U.S. Treasury Money Market Fund (the "Funds"), each
a separate series of Fifth Third Funds, including:
. the investment objective
. principal investment strategies
. principal risks, and
. volatility and performance information
All Funds are managed by Fifth Third Bank.
3
<PAGE>
Fifth Third Government Money Market Fund
[LOGO]
Fundamental High current income consistent with stability of principal
Objective and liquidity.
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of total assets in high-
quality securities called "first tier" securities. These
generally will be securities issued or guaranteed as to
principal or interest by the U.S. Treasury or another U.S.
government agency or instrumentality.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment Risks affect the overall yield of the Fund and thus, the return
on your investment. They include factors that cause short-
An investment in term interest rates to decline, such as a weak economy,
the Fund is not strong equity markets and changes by the Federal Reserve
a deposit of in its monetary policies. The Fund's ability to meet
Fifth Third Bank redemption obligations could be burdened by its
or any other investments in securities restricted as to resale.
bank and is not Restricted securities generally trade among institutions
insured or in markets that are not as developed or that do not
guaranteed by function as efficiently as more established markets.
the FDIC or any
other government
agency. Although
the Fund seeks
to preserve the
value of your
investment at
$1.00 per share,
it is possible
to lose money by
investing in
this Fund.
4
<PAGE>
Fifth Third Government Money Market Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time.
The returns assume that Fund distributions have been reinvested. The table
assumes that Shareholders redeem their Fund shares at the end of the period
indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Institutional Shares
1992 3.36
1993 2.69
1994 3.84
1995 5.51
1996 4.96
1997 5.10
1998 4.98
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1995 1.38%
Worst quarter: Q2 1993 0.65%
Year to Date Return (1/1/99 to 9/30/99): 3.33%
</TABLE>
-------------------------
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Shares 7/10/91 4.98% 4.88% N/A 4.39%
- --------------------------------------------------------------------------------------------
</TABLE>
To obtain current yield information, call 1-888-799-5353.
5
<PAGE>
Fifth Third Prime Money Market Fund
[LOGO]
Fundamental Current income consistent with stability of principal.
Objective
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of its total assets in high-
quality securities called "first tier" securities. These
generally will be corporate securities, including
commercial paper, that at the time of purchase are rated
by such firms as Standard & Poor's and Moody's in their
highest short-term major rating categories, or are unrated
securities that are considered equivalent by the Fund's
investment manager. They also may include securities
issued or guaranteed as to principal or interest by the
U.S. Treasury or any U.S. Government agency or
instrumentality.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment Risks affect the overall yield of the Fund and thus, the return
on your investment. They include factors that cause short-
An investment in term interest rates to decline, such as a weak economy,
the Fund is not strong equity markets and changes by the Federal Reserve
a deposit of in its monetary policies. The Fund's ability to meet
Fifth Third Bank redemption obligations could be burdened by its
or any other investments in securities restricted as to resale.
bank and is not Restricted securities generally trade among institutions
insured or in markets that are not as developed or that do not
guaranteed by function as efficiently as more established markets.
the FDIC or any
other government
agency. Although
the Fund seeks
to preserve the
value of your
investment at
$1.00 per share,
it is possible
to lose money by
investing in
this Fund.
6
<PAGE>
Fifth Third Prime Money Market Fund
[LOGO]
Volatility and Performance Information
The bar chart and
table provide an
indication of the
risks of an
investment in the
Fund by showing
its performance
from year to year
and over time.
The returns
assume that Fund
distributions
have been
reinvested. The
table assumes
that Shareholders
redeem their Fund
shares at the end
of the period
indicated.
Past performance
does not indicate
how the Fund will
perform in the
future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Institutional Shares
1990 7.92
1991 5.76
1992 3.37
1993 2.69
1994 3.83
1995 5.60
1996 5.04
1997 5.21
1998 5.13
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1990 1.95%
Worst quarter: Q2 1993 0.65%
Year to Date Return (1/1/99 to 9/30/99): 3.45%
</TABLE>
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Shares 6/14/89 5.13% 4.96% N/A 5.16%
</TABLE>
- --------------------------------------------------------------------------------
To obtain current yield information, call 1-888-799-5353.
7
<PAGE>
Fifth Third Tax Exempt Money Market Fund
[LOGO]
Fundamental Maximize current income, exempt from federal income tax,
Objective while preserving capital and maintaining liquidity.
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of its total assets in high-
quality securities called "first tier" securities. At
least 80% of its total assets are invested in municipal
securities, which include fixed and variable rate debt
obligations issued by various states, their counties,
towns and public authorities. Those securities tend to be:
. general obligation bonds where principal and interest
are paid from general tax revenues received by the
issuer;
. revenue bonds, where principal and interest are paid
only from the revenues received from one or more public
projects or special excise taxes. These bonds tend to
be issued in connection with the financing of
infrastructure projects, such as toll roads and housing
projects, and they are not general obligations of the
issuer;
. industrial development bonds, where principal and
interest are paid only from revenues received from
privately-operated facilities. Generally, these bonds
are issued in the name of a public finance authority to
finance infrastructure to be used by a private entity.
However, they are general obligations of the private
entity, not the issuer.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment Risks affect the overall yield of the Fund and thus, the return
on your investment. They include factors that cause short-
An investment in term interest rates to decline, such as a weak economy,
the Fund is not strong equity markets and changes by the Federal Reserve
a deposit of in its monetary policies.
Fifth Third Bank
or any other Because the Fund's securities are issued by states,
bank and is not cities, towns and public authorities, the Fund's
insured or performance also may be affected by political and economic
guaranteed by conditions at the state or local level. Those conditions
the FDIC or any may include state or city budgetary problems, declines in
other government the tax base and, generally, any factor that may cause
agency. Although rating agencies to downgrade the credit ratings on state
the Fund seeks or municipal securities. Actual or proposed changes in tax
to preserve the rates, regulations or government-sponsored programs also
value of your could affect the yield on your investment.
investment at
$1.00 per share, The Fund's ability to meet redemption obligations could be
it is possible burdened by its investments in securities restricted as to
to lose money by resale. Restricted securities generally trade among
investing in institutions in markets that are not as developed or that
this Fund. do not function as efficiently as more established
markets.
8
<PAGE>
Fifth Third Tax Exempt Money Market Fund
[LOGO]
Volatility and Performance Information
The bar chart and
table provide an
indication of the
risks of an
investment in the
Fund by showing
its performance
from year to year
and over time.
The returns
assume that Fund
distributions
have been
reinvested. The
table assumes
that Shareholders
redeem their Fund
shares at the end
of the period
indicated.
Past performance
does not indicate
how the Fund will
perform in the
future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Investment A Shares*
1989 5.81
1990 5.14
1991 3.95
1992 2.42
1993 1.81
1994 2.10
1995 2.95
1996 2.72
1997 2.75
1998 2.68
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1989 1.45%
Worst quarter: Q3 1994 0.45%
Year to Date Return (1/1/99 to 9/30/99): 1.99%
</TABLE>
Average Annual
Total Returns (for
the periods ended
December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares* 9/7/83 2.68% 2.64% 3.22% 3.72%
</TABLE>
- --------------------------------------------------------------------------------
To obtain current yield information, call 1-888-799-5353.
* The Fund first offered Institutional shares on 9/21/98. Return information is
for Investment A shares, a class of shares of the Fund not offered by this
Prospectus. Investment A shares of the Fund would have substantially similar
annual returns as Institutional shares because the shares represent interests
in the same portfolio of investments and the annual returns would differ only
to the extent that the classes do not have the same expenses.
9
<PAGE>
Fifth Third U.S. Treasury Money Market Fund
[LOGO]
Fundamental Stability of principal and current income consistent with
Objective stability of principal.
Principal The Fund manages its portfolio subject to strict SEC
Investment guidelines, which are designed so that the Fund may
Strategies maintain a stable $1.00 per share price, although there is
no guarantee that it will do so. All of the Fund's
investments are expected to mature in the short-term and
the dollar-weighted average portfolio maturity of the Fund
may not exceed 90 days.
The Fund invests at least 95% of its total assets in high-
quality securities called "first tier" securities. These
generally will be short-term obligations issued by the
U.S. Treasury, which are guaranteed as to principal and
interest by the U.S. Government.
The Fund reserves the right to invest up to 5% of its
portfolio in "second tier" securities, which generally are
corporate securities that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's in
their second highest short-term major rating categories,
or unrated securities that are considered equivalent by
the Fund's investment manager. Some corporate securities
purchased by the Fund may be restricted securities, that
is, they may be subject to limited resale rights.
Principal The Fund's principal risks are those risks that could
Investment Risks affect the overall yield of the Fund and thus, the return
on your investment. They include factors that cause short-
An investment in term interest rates to decline, such as a weak economy,
the Fund is not strong equity markets and changes by the Federal Reserve
a deposit of in its monetary policies.
Fifth Third Bank
or any other
bank and is not
insured or
guaranteed by
the FDIC or any
other government
agency. Although
the Fund seeks
to preserve the
value of your
investment at
$1.00 per share,
it is possible
to lose money by
investing in
this Fund.
10
<PAGE>
Fifth Third U.S. Treasury Money Market Fund
[LOGO]
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time.
The returns assume that Fund distributions have been reinvested. The table
assumes that Shareholders redeem their Fund shares at the end of the period
indicated.
Past performance does not indicate how the Fund will perform in the future.
[CHART]
Year-by-Year Total Returns as of 12/31 For Institutional Shares
1990 7.84
1991 5.67
1992 3.39
1993 2.74
1994 3.79
1995 5.57
1996 5.05
1997 5.25
1998 5.12
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
<TABLE>
<S> <C> <C>
Best quarter: Q2 1990 1.93%
Worst quarter: Q4 1993 0.67%
Year to Date Return (1/1/99 to 9/30/99): 3.40%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Shares 12/1/89 5.12% 4.95% N/A 4.96%
</TABLE>
- --------------------------------------------------------------------------------
For current yield information, call 1-888-799-5353.
11
<PAGE>
Shareholder Fees and Fund Expenses
Fee Tables
These tables describe the fees and expenses that you may pay if you buy and
hold Institutional shares of the Funds.
Shareholder fees are paid by you at the time you purchase or sell your shares.
Annual Fund operating expenses are paid out of Fund assets, and are reflected
in the share price. Each Fund's fees and expenses are based upon the Fund's
operating expenses for the fiscal year ended July 31, 1999.
Shareholder Fees
<TABLE>
<CAPTION>
Money Market Funds--Fee Table
Fifth Third Fifth Third Fifth Third Fifth Third
Government Prime Money Tax Exempt U.S. Treasury
Money Market Market Money Market Money Market
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed
on Purchases None None None None
- ----------------------------------------------------------------------------------
Maximum Sales Charge
(Load) Imposed
on Reinvested Dividends None None None None
- ----------------------------------------------------------------------------------
Maximum Deferred Sales
Load None None None None
- ----------------------------------------------------------------------------------
Annual Fund Operating
Expenses
(as a percentage of
average net assets)
Management fees 0.40% 0.40% 0.50% 0.40%
- ----------------------------------------------------------------------------------
Distribution (12b-1)
fees None None None None
- ----------------------------------------------------------------------------------
Other expenses 0.27% 0.23% 0.44% 0.22%
- ----------------------------------------------------------------------------------
Total Annual Fund
Operating Expenses 0.67% 0.63% 0.94% 0.62%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Because some of the fund's expenses have been reduced through expense waivers
and reimbursements, actual total operating expenses for the prior year would
have been as shown below.
Net Total Annual Fund
Operating Expenses 0.56% 0.52% 0.61% 0.38%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Shareholder Fees and Fund Expenses
Expense Examples
Use the tables below to compare fees and expenses with the fees and expenses of
other mutual funds. The tables illustrate the amount of fees and expenses you
and the Fund would pay, assuming a $10,000 initial investment, 5% annual
return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Amounts are presented assuming redemption at the end of
each period. Because these examples are hypothetical and for comparison only,
your actual costs may be different.
Money Market Funds
<TABLE>
<CAPTION>
Fifth Third
Government 1 3 5 10
Money Market Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $68 $214 $373 $835
---------------------------------------------
<CAPTION>
Fifth Third Prime 1 3 5 10
Money Market Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $64 $202 $351 $786
---------------------------------------------
<CAPTION>
Fifth Third Tax
Exempt 1 3 5 10
Money Market Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $96 $300 $520 $1,155
---------------------------------------------
<CAPTION>
Fifth Third U.S.
Treasury 1 3 5 10
Money Market Fund Year Years Years Years
---------------------------------------------
<S> <C> <C> <C> <C>
Institutional Shares $63 $199 $346 $774
---------------------------------------------
</TABLE>
13
<PAGE>
Additional Information About the Funds' Investments
The primary investments and investment strategies of the Funds are described
above. Below are descriptions of some additional investments and strategies of
the Funds, some of their risks as well as other risks of investing in the
Funds. A list of each Fund's investments is included in the Funds' most recent
annual or semi-annual report to shareholders. Please note, though, that a Fund
may adjust the composition of its portfolio as market and economic conditions
change.
The success of achieving each Fund's investment strategy depends on Fifth Third
Bank's ability to assess the potential of the securities in which the Fund
invests as well as to evaluate and anticipate changing economic and market
conditions.
Foreign Foreign bonds and instruments of foreign banks generally
Investments have more risk than their domestic counterparts, in part
(Applies to all because of higher political and economic risks and the
Funds) general lack of reliable information. All foreign
securities purchased by a Fund are denominated in U.S.
dollars.
Securities When securities are rated by one or more independent
Ratings rating agencies, each Fund uses these ratings to determine
(Applies to all credit quality. In cases where a security has received a
Funds) rating from only one independent rating agency, it may
rely on that rating. If a security has received ratings
from two or more rating agencies and at least two of the
ratings are equivalent, the Fund may rely on the two
equivalent ratings even if the other ratings are lower. In
cases where a security's two highest ratings are in
conflicting categories, the Fund must follow the lower
rating. If a security is unrated, the Fund may assign it
to a given category based on its own credit research.
Repurchase Each Fund may enter into repurchase agreements. A
Agreements repurchase agreement is an agreement in which a Fund buys
(Applies to all securities from a bank or other financial institution and
Funds) agrees to sell it back at a specified time and place. The
risks of repurchase agreements include the risk that a
counterparty will not buy back the securities as required
and the securities decline in value. To mitigate those
risks, the Funds intend to enter repurchase agreements
only with high quality counterparties and purchase only
high quality, short-term debt securities.
Securities Each Fund (other than Fifth Third U.S. Treasury Money
Lending Market Fund) may seek additional income or fees by lending
(Applies to all portfolio securities to qualified institutions. By
Funds) reinvesting any cash collateral it receives in these
transactions, a Fund could realize additional gains or
losses. If the borrower fails to return the securities and
the invested collateral has declined in value, a Fund
could lose money.
Restricted and Any securities that are thinly traded or whose resale is
Illiquid restricted can be difficult to sell at a desired time and
Securities price. Some of those securities are new and complex, and
(Applies to all trade only among institutions; the markets for these
Funds) securities are still developing and may not function as
efficiently as established markets. Owning a large
percentage of restricted or illiquid securities could
hamper a Fund's ability to raise cash in order to meet
redemptions. Also, because there may not be an established
market price for these securities, a Fund may have to
estimate their value, which means that their valuation
(and, to a much smaller extent, the valuation of the Fund)
may have a subjective element.
14
<PAGE>
Additional Information About the Funds' Investments
Derivatives Derivatives are financial instruments whose value derives
(Applies to all from one or more securities. Certain instruments that are
Funds) "first" or "second tier" securities also may be
derivatives, such as short-term, high-quality asset-backed
securities. Each Fund uses derivatives to invest for
potential income, and may purchase them to the extent it
can purchase any other type of "first" or "second tier"
security. The values of some derivatives are difficult to
determine because they are based on the values of other
securities and the markets for some derivatives may be
limited. With some derivatives, such as certain option
contracts, there is also the risk that the counterparty
may fail to honor its contract terms, causing a loss for
the Fund.
When-Issued Each Fund may invest in securities prior to their date of
Securities issue. These securities could fall in value by the time
(Applies to all they are actually issued, which may be any time from a few
Funds) days to over a year.
Year 2000 Fifth Third Bank and BISYS Fund Services Limited
(Applies to all Partnership ("BISYS"), the Funds' administrator, do not
Funds) currently anticipate that computer problems related to the
year 2000 will have a material effect on any Fund. There
can be no assurances in this area, however, and although
Fifth Third Funds and BISYS have undertaken significant
projects to minimize the risk of year 2000 computer
problems, some factors, including the year 2000 compliance
of Fifth Third Fund's and BISYS's suppliers, are not
within their direct control and could negatively affect
communications systems, investment markets or the economy
in general.
15
<PAGE>
Fund Management
Investment Advisor
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, serves as
investment advisor to all Funds.
As of September 30, 1999, Fifth Third Bank had approximately $18 billion of
assets under management, including approximately $4.6 billion of assets of
Fifth Third Funds.
The management fees paid by the Funds for the fiscal year ended July 31, 1999
were as follows:
<TABLE>
<CAPTION>
As a percentage of
average net assets
- ---------------------------------------------------------------
<S> <C>
Fifth Third Government Money Market Fund 0.40%
- ---------------------------------------------------------------
Fifth Third Prime Money Market Fund 0.38%
- ---------------------------------------------------------------
Fifth Third Tax Exempt Money Market Fund 0.36%
- ---------------------------------------------------------------
Fifth Third U.S. Treasury Money Market Fund 0.26%
- ---------------------------------------------------------------
</TABLE>
Fund Administration
BISYS serves as the administrator of the Funds. The administrator generally
assists in all aspects of the Funds' administration and operation, including
providing the Funds with certain administrative personnel and services
necessary to operate the Funds, such as legal and accounting services. BISYS
provides these at an annual rate as specified below.
<TABLE>
<CAPTION>
Maximum Average Aggregate Daily
Administrative Fee Net Assets of the Trust
------------------ -----------------------
<S> <C>
0.20% of the first $1 billion
0.18% of the next $1 billion
0.17% in excess of $2 billion
</TABLE>
BISYS may periodically waive all or a portion of its administrative fee which
will cause the yield of a Fund to be higher than it would otherwise be in the
absence of such a waiver.
Pursuant to a separate agreement with BISYS, Fifth Third Bank performs sub-
administrative services on behalf of each Fund, including providing certain
administrative personnel and services necessary to operate the Funds. Fifth
Third Bank receives a fee from BISYS for providing sub-administrative services
at an annual rate of 0.025% of the average aggregate daily net assets of the
Funds.
16
<PAGE>
Shareholder Information
Purchasing and Selling Fund Shares
Pricing Fund Shares
The price of a Fund's shares is based on the Fund's Net Asset Value (NAV). The
value of each portfolio instrument held by the Funds is determined by using
amortized cost.
Fifth Third Tax Exempt Money Market Fund calculates its NAV at 9 a.m. Fifth
Third Government Money Market Fund calculates its NAV at 11:00 a.m. Each of
Fifth Third Prime Money Market Fund and Fifth Third U.S. Treasury Money Market
Fund calculates its NAV at 1 p.m. All times are Cincinnati time. Each Fund's
NAV is calculated each day the New York Stock Exchange is open for regular
trading and the Federal Reserve Bank of Cleveland is open for business. The
Funds will be closed on those days that Fifth Third Bank is closed and on the
following holidays: New Year's Day, Martin Luther King Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans'
Day, Thanksgiving Day and Christmas.
Purchasing and Adding to Your Shares
You may purchase shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your purchase price will be the next NAV after your purchase order, completed
application and full payment have been received by the Funds or its transfer
agent. All orders must be received by the Funds or its transfer agent on the
following schedule (Cincinnati time) in order to receive that day's NAV: Fifth
Third Tax Exempt Money Market Fund--9 a.m.; Fifth Third Government Money Market
Fund--11 a.m.; Fifth Third Prime Money Market Fund and Fifth Third U.S.
Treasury Money Market Fund--1 p.m.
Institutional Shares only may be purchased through the Trust and Investment
Department of Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, qualified employee retirement plans subject to minimum
requirements that may be established by the distributor of Fund shares, or
broker-dealers, investment advisers, financial planners or other financial
institutions which have an agreement with Fifth Third Bank to place trades for
themselves or their clients for a fee. In order to purchase Institutional
shares through one of those entities, you must have an account with it. That
account will be governed by its own rules and regulations, which may be more
stringent than the rules and regulations governing an investment in the Funds,
and you should consult your account documents for full details. Your shares in
the Funds may be held in an omnibus account in the name of that institution.
The entity through which you are purchasing your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off time
for purchase requests. Consult that entity for specific information. If your
purchase order has been received by the Funds prior to the time designated by
the Funds for receiving orders, you will receive the dividend declared for that
day.
Minimum
Investments
The minimum initial investment in Institutional Shares of
the Funds offered by this Prospectus is $1,000. Subsequent
investments must be in amounts of at least $50. An
institutional investor's minimum investment will be
calculated by combining all accounts it maintains with the
Fifth Third Funds.
All purchases must be in U.S. dollars. A fee may be
charged for any checks that do not clear. Third-party
checks are not accepted.
For details, call 1-888-799-5353 or write to: Fifth Third
Funds, c/o Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263.
The Funds may reject a purchase order for any reason.
17
<PAGE>
Shareholder Information
Avoid 31% Tax Withholding
Each Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) in compliance with IRS rules. To
avoid this withholding, make sure you provide your correct Tax Identification
Number .
Selling Your Shares
You may sell your shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your sales price will be the next NAV after your sell order is received by the
Funds, its transfer agent, or your investment representative. All orders must
be received by the Fund or its transfer agent prior to the time the Fund
calculates its NAV in order to receive that day's NAV. If your order has been
received by the Fund prior to the time the Fund calculates its NAV, and your
shares have been sold you will not receive the dividend declared for that day.
Normally you will receive your proceeds within a week after your request is
received.
In order to sell your shares, call the Trust and Investment Department at Fifth
Third Bank, Fifth Third Securities, Inc.--Institutional Investment Division,
the sponsor of your qualified employee retirement plan or the broker-dealer,
investment adviser, financial planner or other institution through which you
purchased your shares.
Postponement of Redemption Payments
Any Fund may delay sending to you redemption proceeds for up to 7 days, or
longer if permitted by the SEC. If you experience difficulty making a telephone
redemption during periods of drastic economic or market change, you can send to
the Funds your request by regular mail to: Fifth Third Funds, P.O. Box 5354,
Cincinnati, Ohio 45201-5354, or by express mail to: Fifth Third Funds, 512
Walnut Street, 21st Floor, Cincinnati, Ohio 45202-3874.
Closing of Small Accounts
If your account falls below $1,000 because of redemptions, a Fund may ask you
to increase your balance. If it is still below the minimum after 30 days, the
Fund may close your account and send you the proceeds at the current NAV.
18
<PAGE>
Shareholder Information
Exchanging Your Shares
You may exchange Instructions for Exchanging Shares
your Fund shares
for Institutional To exchange your shares, call the Trust and Investment
shares of any Department at Fifth Third Bank, Fifth Third Securities,
other Fifth Third Inc.--Institutional Investment Division, the sponsor of
Fund. No your qualified employee retirement plan or the broker-
transaction fees dealer, investment adviser, financial planner or other
are charged for institution through which you purchased your shares for
exchanges. Be exchange procedures or call 1-888-799-5353.
sure to read the
Prospectus Notes on Exchanges
carefully of any
Fund into which To prevent disruption in the management of the Funds,
you wish to market timing strategies and frequent exchange activity
exchange shares. may be limited by the Funds. Although not anticipated,
the Funds may reject exchanges, or change or terminate
You must meet the rights to exchange shares at any time.
minimum
investment Shares of the new Fund must be held under the same
requirements for account names with the same registration and tax
the Fund into identification numbers, as the shares of the old Fund.
which you are
exchanging. The Exchange Privilege (including automatic exchanges)
Exchanges from may be changed or eliminated at any time.
one Fund to
another are The exchange privilege is available only in states where
taxable for shares of the Funds may be sold.
investors subject
to federal or All exchanges are based on the relative net asset value
state income next determined after the exchange order is received by
taxation. the Funds.
Dividends and Capital Gains
All dividends and capital gains will be automatically reinvested unless you
request otherwise. You can receive them in cash or by electronic funds transfer
to your bank account if you are not a participant in an IRA account or in a tax
qualified plan. There are no sales charges for reinvested distributions.
Dividends, if any, are declared daily and paid monthly. Capital gains, if any,
are distributed at least annually. No Fund expects to pay any capital gains.
19
<PAGE>
Shareholder Information
Taxation
Federal Income Tax
Each Fund expects to distribute substantially all of its investment income
(including net capital gains and tax-exempt interest income, if any) to its
shareholders. Unless otherwise exempt or as discussed below in the case of
Fifth Third Tax Exempt Money Market Fund, shareholders are required to pay
federal income tax on any dividends and other distributions, including capital
gains distributions received. This requirement applies whether dividends and
other distributions are received in cash or as additional shares. No federal
income tax is due on any dividend earned in an IRA or qualified retirement plan
until distributed.
This is a brief summary of certain federal income tax consequences relating to
an investment in the Funds, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under federal, state and
local laws.
Additional Tax Information for Fifth Third Tax Exempt Money Market Fund
Dividends derived from interest earned on municipal securities, the interest on
which is excluded from gross income for federal income tax purposes, including
insurance proceeds representing maturing interest on defaulted municipal
securities the interest on which would be so excluded, constitute "exempt-
interest dividends" when designated as such by Fifth Third Tax Exempt Money
Market Fund and will be excluded from gross income for federal income tax
purposes. However, interest excluded from gross income for federal income tax
purposes that is received by individuals and corporations on certain municipal
obligations issued on or after August 8, 1986, to finance certain private
activities will be treated as tax preference items in computing the alternative
minimum tax. Exempt interest dividends received by shareholders from Fifth
Third Tax Exempt Money Market Fund will also be treated as tax preference items
in computing the alternative minimum tax to the extent, if any, that
distributions by the Fund are attributable to interest earned it on such
obligations. Also, a portion of all other interest excluded from gross income
for federal income purposes earned by a corporation may be subject to the
alternative minimum tax as a result of the inclusion in alternative minimum
taxable income of 75% of the excess of adjusted current earnings over adjusted
net book income.
Distributions, if any, derived from capital gains will generally be taxable to
shareholders as capital gains for federal income tax purposes to the extent so
designated by Fifth Third Tax Exempt Money Market Fund. Dividends, if any,
derived from sources other than interest excluded from gross income for federal
income tax purposes and capital gains will be taxable to shareholders as
ordinary income for federal income tax purposes whether or not reinvested in
additional shares. Shareholders not subject to federal income tax on their
income will not, of course, be required to pay federal income tax on any
amounts distributed to them. Fifth Third Tax Exempt Money Market Fund
anticipates that substantially all of its dividends will be excluded from gross
income for federal income tax purposes and will not be a preference item for
individuals for the purposes of the federal alternative minimum tax.
If a shareholder receives an exempt-interest dividend with respect to any share
and such share is held by the shareholder for six months or less, any loss on
the sale or exchange of such share will be disallowed to the extent of the
amount of such exempt-interest dividend. In certain limited instances, the
portion of Social Security benefits that may be subject to federal income
taxation may be affected by the amount of tax-exempt interest income, including
exempt-interest dividends, received by a shareholder.
Under state or local law, distributions of investment income may be taxable to
shareholders as dividend income even though a substantial portion of such
distribution may be derived from interest excluded from gross income for
federal income tax purposes that, if received directly, would be exempt from
such income taxes. Fifth Third Tax Exempt Money Market Fund will report to its
shareholders annually after the close of its taxable year the percentage and
source, on a state-by-state basis, of interest income earned on municipal
securities held by the Fund during the preceding year. State laws differ on
this issue, and shareholders are urged to consult their own tax advisors
regarding the taxation of their investments under state and local tax laws.
20
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Ernst & Young LLP, whose report, along with the Funds' financial
statements, are included in the Funds' annual report, which is available upon
request.
Fifth Third Government Money Market Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------------
1999 1998 1997 1996 1995
Per share data -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.05 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------
Total from investment
operations 0.05 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------
Less distributions
Distributions to shareholders
from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net asset value, end of the
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total return 4.60% 5.13% 5.01% 5.11% 5.22%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.56% 0.52% 0.51% 0.50% 0.50%
Net investment income 4.52% 5.02% 4.90% 4.99% 5.17%
Expense waiver/reimbursement
(a) 0.11% 0.12% 0.09% 0.07% 0.20%
- --------------------------------------------------------------------------------
Supplemental data
Net assets, end of period
(000s) $252,987 $221,034 $162,543 $132,326 $129,603
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
21
<PAGE>
Financial Highlights
Fifth Third Prime Money Market Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------------
1999 1998 1997 1996 1995
Per share data -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.05 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------
Total from investment
operations 0.05 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------
Less distributions
Distributions to shareholders
from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net asset value, end of the
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total return 4.76% 5.25% 5.11% 5.20% 5.25%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.52% 0.52% 0.52% 0.49% 0.49%
Net investment income 4.66% 5.13% 4.99% 5.07% 5.12%
Expense waiver/reimbursement
(a) 0.11% 0.12% 0.09% 0.08% 0.09%
- --------------------------------------------------------------------------------
Supplemental data
Net assets, end of period
(000s) $348,366 $368,348 $341,827 $300,821 $223,640
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
22
<PAGE>
Financial Highlights
Fifth Third Tax Exempt Money Market Fund
Institutional Shares
<TABLE>
<CAPTION>
Period Ended Period Ended
July 31, September 30,
1999* 1998**
Per share data ------------ -------------
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.03 --
- -------------------------------------------------------------------------------
Total from investment operations 0.03 --
- -------------------------------------------------------------------------------
Less distributions
Distributions to shareholders from net investment
income (0.03) --
- -------------------------------------------------------------------------------
Total distributions (0.03) --
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net asset value, end of the period $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total return 2.24%(d) 2.74%(b)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.61%(c) 0.63%(c)
Net investment income 2.66%(c) 3.09%(c)
Expense waiver/reimbursement (a) 0.33%(c) -- (c)
- -------------------------------------------------------------------------------
Supplemental data
Net assets, end of period (000s) $17,682 $7,953
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Reflects operations for the period from September 21, 1998 (commencement of
operations) through September 30, 1998.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Represents total return based on the activity of Investment A Shares for
the period from October 1, 1997 to September 20, 1998 and the activity of
the Institutional Shares for the period of September 21, 1998 to September
30, 1998. Total return for the Institutional Shares for the period from
September 21, 1998 (commencement of operations) to September 30, 1998 was
3.16% annualized.
(c) Annualized
(d) Not annualized
23
<PAGE>
Financial Highlights
Fifth Third U.S. Treasury Money Market Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended July 31,
------------------------------------------------
1999 1998 1997 1996 1995
Per share data -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
Income from investment
operations
Net investment income 0.05 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------
Total from investment
operations 0.05 0.05 0.05 0.05 0.05
- --------------------------------------------------------------------------------
Less distributions
Distributions to shareholders
from net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------
Total distributions (0.05) (0.05) (0.05) (0.05) (0.05)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net asset value, end of the
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total return 4.68% 5.31% 5.11% 5.24% 5.18%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.38% 0.38% 0.42% 0.43% 0.44%
Net investment income 4.57% 5.19% 5.00% 5.10% 5.07%
Expense waiver/reimbursement
(a) 0.24% 0.24% 0.17% 0.12% 0.11%
- --------------------------------------------------------------------------------
Supplemental data
Net assets, end of period
(000s) $856,286 $876,089 $539,087 $489,228 $321,640
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
24
<PAGE>
Addresses
- --------------------------------------------------------------------------------
Fifth Third Government Money Market Fund Fifth Third Funds
Fifth Third Prime Money Market Fund c/o Fifth Third Bank
Fifth Third Tax Exempt Money Market Fund 38 Fountain Square Plaza
Fifth Third U.S. Treasury Money Market Fund Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Investment Advisor Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Custodian, Transfer Agent, Dividend
Disbursing Agent, and Sub-Administrator Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Distributor and Administrator BISYS Fund Services, L.P.
3435 Stelzer Road
Columbus, Ohio 43219
- --------------------------------------------------------------------------------
Independent Auditors Ernst & Young L.L.P.
1300 Chiquita Center
250 East Fifth Street
Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
<PAGE>
The following additional information is available to you upon request and
without charge.
Annual/Semiannual Reports (Reports):
The Funds' annual and semi-annual reports to shareholders contain additional
information on the Funds' investments.
Statement of Additional Information (SAI): The SAI provides more detailed
information about the Funds, including their operations and investment
policies. It is incorporated by reference and is legally considered a part of
this prospectus.
- --------------------------------------------------------------------------------
You can get free copies of Annual and Semi-annual Reports, the SAI, prospectuses
of other Fifth Third Funds, or request other information and discuss your
questions about the Funds by contacting a broker or other financial institution
that sells the Funds. In addition, you may contact the Funds at:
Fifth Third Funds
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Telephone: 1-888-799-5353
Internet: http://www.53.com*
-----------------
- --------------------------------------------------------------------------------
*The Funds' website is not part of this Prospectus.
You can review the Annual and Semi-Annual Reports and the SAI at the Public
Reference Room of the Securities and Exchange Commission. You can get copies:
. For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
. At no charge from the Commission's Website at http://www.sec.gov.
[LOGO OF FIFTH THIRD FUNDS]
Investment Company Act file no. 811-5669
<PAGE>
Part B
Fifth Third Funds
(formerly Fountain Square Funds)
Combined Statement of Additional Information
This Combined Statement of Additional Information (the "SAI") relates to
the following portfolios (the "Funds") of Fifth Third Funds (the "Trust"):
. Fifth Third Quality Growth Fund;
. Fifth Third Cardinal Fund;
. Fifth Third Pinnacle Fund;
. Fifth Third Equity Income Fund;
. Fifth Third Balanced Fund;
. Fifth Third Mid Cap Fund;
. Fifth Third International Equity Fund;
. Fifth Third Bond Fund For Income;
. Fifth Third Quality Bond Fund;
. Fifth Third U.S. Government Securities Fund;
. Fifth Third Municipal Bond Fund;
. Fifth Third Ohio Tax Free Bond Fund;
. Fifth Third Government Money Market Fund;
. Fifth Third Prime Money Market Fund;
. Fifth Third Tax Exempt Money Market Fund;
. Fifth Third U.S. Treasury Money Market Fund;
This SAI should be read with the Prospectuses for the Funds dated November 30,
1999. To receive a copy of any Prospectus, you may write the Trust or call
toll-free (888) 799-5353. This Statement is not a prospectus itself.
Fifth Third Funds
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
November 30, 1999
<PAGE>
Table of Contents
Page
----
GENERAL INFORMATION ABOUT THE TRUST 1
INVESTMENT OBJECTIVE AND POLICIES OF THE FUNDS 1
Types of Investments 2
Portfolio Turnover 14
Investment Limitations 14
Investment Risks (Ohio Tax Free Fund) 18
FIFTH THIRD FUNDS MANAGEMENT 20
Officers and Trustees 20
Trust Ownership 21
Trustees' Compensation 29
Trustee Liability 29
INVESTMENT ADVISORY SERVICES 29
Investment Advisors to the Trust 29
Advisory Fees 30
Sub-advisor 30
Sub-advisory Fees 30
Administrative Services 30
Transfer Agent and Dividend Disbursing Agent 32
BROKERAGE TRANSACTIONS 32
PURCHASING SHARES 34
Distribution Plan and Administrative Services Agreement
(Investment C Shares Only) 34
Conversion to Federal Funds 35
Exchanging Securities for Fund Shares 36
Payments to Dealers 36
DETERMINING NET ASSET VALUE 36
Determining Market Value of Securities 37
Valuing Municipal Bonds 37
Use of Amortized Cost 38
Trading in Foreign Securities 39
REDEEMING SHARES 39
Redemption in Kind 39
TAX STATUS 40
The Funds' Tax Status 40
Shareholders' Tax Status 40
Capital Gains 40
Foreign Taxes 41
TOTAL RETURN 41
YIELD 43
Tax Equivalency Table 44
PERFORMANCE COMPARISONS 45
FINANCIAL STATEMENTS 49
APPENDIX 49
i
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GENERAL INFORMATION ABOUT THE TRUST
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated September 15, 1988.
The Declaration of Trust permits the Trust to offer separate series of
shares of beneficial interest representing interests in separate portfolios of
securities, and it permits the Trust to offer separate classes of each such
series. Currently, the Trust offers the following Funds and the following
classes of each Fund:
. Investment A Shares, Investment C Shares and Institutional Class Shares of
the following Funds: Fifth Third U.S. Government Securities Fund
("Government Securities Fund"), Fifth Third Quality Bond Fund ("Quality
Bond Fund"), Fifth Third Ohio Tax Free Bond Fund ("Ohio Tax Free Fund"),
Fifth Third Quality Growth Fund ("Quality Growth Fund"), Fifth Third
Cardinal Fund ("Cardinal Fund"), Fifth Third Pinnacle Fund ("Pinnacle
Fund"), Fifth Third Mid Cap Fund ("Mid Cap Fund"), Fifth Third Balanced
Fund ("Balanced Fund"), Fifth Third International Equity Fund
("International Equity Fund"), Fifth Third Equity Income Fund ("Equity
Income Fund"), Fifth Third Bond Fund For Income ("Bond Fund For Income"),
and Fifth Third Municipal Bond Fund ("Municipal Bond Fund");
. Investment A Shares and Institutional Class Shares of the following Funds:
Fifth Third Government Money Market Fund ("Government Money Market Fund"),
Fifth Third Prime Money Market Fund ("Prime Money Market Fund") and Fifth
Third Tax Exempt Money Market Fund ("Tax Exempt Fund"); and
. Institutional Class Shares of Fifth Third U.S. Treasury Money Market Fund
("U.S. Treasury Money Market Fund").
All Funds are advised by Fifth Third Bank (the "Advisor"), except Pinnacle
Fund, which is advised by Heartland Capital Management, Inc. ("Heartland"),
Fifth Third Bank and Heartland are owned by Fifth Third Bancorp. Morgan Stanley
Asset Management, Inc. (the "Sub-advisor") serves as investment sub-advisor to
the International Equity Fund.
INVESTMENT OBJECTIVE AND POLICIES OF THE FUNDS
The prospectuses discuss the objective of Funds and certain policies
employed to achieve those objectives. The following discussion supplements the
description of the Funds' investment policies in the prospectus. The Funds'
respective investment objectives cannot be changed without approval of
shareholders. Unless otherwise indicated, the investment policies described
below may be changed by the Board of Trustees (the "Trustees") without
shareholder approval.
1
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Types of Investments
Bank Instruments. The Prime Money Market Fund, the Tax Exempt Money Market
Fund, the Quality Bond Fund, the Quality Growth Fund, the Mid Cap Fund, the
Balanced Fund, the Equity Income Fund, the Bond Fund For Income, and the
Municipal Bond Fund may invest in the instruments of banks and savings and loans
whose deposits are insured by the Bank Insurance Fund or the Savings Association
Insurance Fund, both of which are administered by the Federal Deposit Insurance
Corporation, such as certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances. However, these instruments are not necessarily
guaranteed by those organizations.
In addition to domestic bank obligations such as certificates of deposit;
demand and time deposits, and bankers' acceptances, the Prime Money Market Fund
may invest in:
. Eurodollar Certificates of Deposit issued by foreign branches of U.S.
or foreign banks;
. Eurodollar Time Deposits, which are U.S. dollar-denominated deposits
in foreign branches of U.S. or foreign banks; and
. Yankee Certificates of Deposit, which are U.S. dollar-denominated
certificates of deposit issued by U.S. branches of foreign banks and
held in the United States.
Futures and Options Transactions. All of the Funds except the Money Market
funds may engage in futures and options transactions as described below to the
extent consistent with their investment objectives and policies.
As a means of reducing fluctuations in the net asset value of Shares of the
Funds, the Funds may attempt to hedge all or a portion of their portfolio
through the purchase of put options on portfolio securities and put options on
financial futures contracts for portfolio securities. The Funds may attempt to
hedge all or a portion of their portfolio by buying and selling financial
futures contracts and writing call options on futures contracts. The Funds may
also write covered call options on portfolio securities to attempt to increase
current income.
The Funds will maintain their position in securities, options, and
segregated cash subject to puts and calls until the options are exercised,
closed, or have expired. An option position may be closed out over-the-counter
or on an exchange which provides a secondary market for options of the same
series.
Futures Contracts. The Funds except the Money Market funds may enter into
-----------------
futures contracts. A futures contract is a firm commitment by, the seller who
agrees to make delivery of the specific type of security called for in the
contract ("going short") and the buyer who agrees to take delivery of the
security ("going long") at a certain time in the future. However, a securities
index futures contract is an agreement pursuant to which two parties
2
<PAGE>
agree to take or make delivery of an amount of cash equal to the difference
between the value of the index at the close of the last trading day of the
contract and the price at which the index was originally written. No physical
delivery of the underlying security in the index is made.
Financial futures contracts call for the delivery of particular debt
instruments issued or guaranteed by the U.S. Treasury or by specified agencies
or instrumentalities of the U.S. government at a certain time in the future.
The purpose of the acquisition or sale of a futures contract by a Fund is
to protect it from fluctuations in the value of securities caused by
unanticipated changes in interest rates or stock prices without necessarily
buying or selling securities. For example, in the fixed income securities
market, price moves inversely to interest rates. A rise in rates means a drop in
price. Conversely, a drop in rates means a rise in price. In order to hedge its
holdings of fixed income securities against a rise in market interest rates, a
Fund could enter into contracts to "go short" to protect itself against the
possibility that the prices of its fixed income securities may decline during
the Fund's anticipated holding period. The Fund would "go long" to hedge against
a decline in market interest rates. The International Equity Fund may also
invest in securities index futures contracts when the Sub-advisor believes such
investment is more efficient, liquid or cost-effective than investing directly
in the securities underlying the index.
Stock Index Options. The Funds other than Fifth Third Money Market Funds
-------------------
may purchase put options on stock indices listed on national securities
exchanges or traded in the over-the-counter market. A stock index fluctuates
with changes in the market values of the stocks included in the index.
The effectiveness of purchasing stock index options will depend upon the
extent to which price movements in the Funds' portfolio correlate with price
movements of the stock index selected. Because the value of an index option
depends upon movements in the level of the index rather than the price of a
particular stock, whether the Funds will realize a gain or loss from the
purchase of options on an index depends upon movements in the level of stock
prices in the stock market generally or, in the case of certain indices, in an
industry or market segment, rather than movements in the price of a particular
stock. Accordingly, successful use by the Funds of options on stock indices will
be subject to the ability of the Advisors to predict correctly movements in the
direction of the stock market generally or of a particular industry. This
requires different skills and techniques than predicting changes in the price of
individual stocks.
Put Options on Financial Futures Contracts. The Funds other than Fifth
------------------------------------------
Third Money Market Funds may purchase listed (and, in the case of International
Equity Fund, over-the-counter) put options on financial futures contracts. The
Funds would use these options only to protect portfolio securities against
decreases in value resulting from market factors such as anticipated increase in
interest rates, or in the case of the International Equity Fund when the Sub-
advisor believes such investment is more efficient, liquid or cost-effective
3
<PAGE>
than investing directly in the futures contract or the underlying securities or
when such futures contracts or securities are unavailable for investment upon
favorable terms.
Unlike entering directly into a futures contract, which requires the
purchaser to buy a financial instrument on a set date at a specified price, the
purchase of a put option on a futures contract entitles (but does not obligate)
its purchaser to decide on or before a future date whether to assume a short
position at the specified price. Generally, if the hedged portfolio securities
decrease in value during the term of an option, the related futures contracts
will also decrease in value and the option will increase in value. In such an
event, a Fund will normally close out its option by selling an identical option.
If the hedge is successful, the proceeds received by a Fund upon the sale of the
second option will be large enough to offset both the premium paid by a Fund for
the original option plus the realized decrease in value of the hedged
securities.
Alternatively, a Fund may exercise its put option to close out the
position. To do so, it would simultaneously enter into a futures contract of the
type underlying the option (for a price less than the strike price of the
option) and exercise the option. A Fund would then deliver the futures contract
in return for payment of the strike price. If a Fund neither closes out nor
exercises an option, the option will expire on the date provided in the option
contract, and only the premium paid for the contract will be lost.
The International Equity Fund may write listed put options on financial
futures contracts to hedge its portfolio or when the Sub-advisor believes such
investment is more efficient, liquid or cost-effective than investing directly
in the futures contract or the underlying securities or when such futures
contracts or securities are unavailable for investment upon favorable terms.
When the Fund writes a put option on a futures contract, it receives a premium
for undertaking the obligation to assume a long futures position (buying a
futures contract) at a fixed price at any time during the life of the option.
Call Options on Financial Futures Contracts. The Funds other than the Fifth
-------------------------------------------
Third Money Market Funds may write listed call options or over-the-counter call
options on futures contracts, to hedge their portfolios against an increase in
market interest rates, or in the case of International Equity Fund, when the
Sub-advisor believes such investment is more efficient, liquid or cost-effective
than investing directly in the futures contract or the underlying securities or
when such futures contracts or securities are unavailable for investment upon
favorable terms. When a Fund writes a call option on a futures contract, it is
undertaking the obligation of assuming a short futures position (selling a
futures contract) at the fixed strike price at any time during the life of the
option if the option is exercised. As market interest rates rise and cause the
price of futures to decrease, a Fund's obligation under a call option on a
future (to sell a futures contract) costs less to fulfill, causing the value of
a Fund's call option position to increase.
In other words, as the underlying future's price goes down below the strike
price, the buyer of the option has no reason to exercise the call, so that a
Fund keeps the premium
4
<PAGE>
received for the option. This premium can help substantially offset the drop in
value of a Fund's portfolio securities.
Prior to the expiration of a call written by a Fund, or exercise of it by
the buyer, a Fund may close out the option by buying an identical option. If the
hedge is successful, the cost of the second option will be less than the premium
received by a Fund for the initial option. The net premium income of a Fund will
then substantially offset the realized decrease in value of the hedged
securities.
The International Equity Fund may buy listed call options on financial
futures contracts to hedge its portfolio. When the Fund purchases a call option
on a futures contract, it is purchasing the right (not the obligation) to assume
a long futures position (buy a futures contract) at a fixed price at any time
during the life of the option.
Limitation on Open Futures Positions. A Fund will not maintain open
------------------------------------
positions in futures contracts it has sold or options it has written on futures
contracts if, in the aggregate, the value of the open positions (marked to
market) exceeds the current market value of its securities portfolio plus or
minus the unrealized gain or loss on those open positions, adjusted for the
correlation of volatility between the securities or securities index underlying
the futures contract and the futures contracts. If a Fund exceeds this
limitation at any time, it will take prompt action to close out a sufficient
number of open contracts to bring its open futures and options positions within
this limitation.
"Margin" in Futures Transactions. Unlike the purchase or sale of a
-------------------------------
security, the Funds do not pay or receive money upon the purchase or sale of a
futures contract. Rather, the Funds are required to deposit an amount of
"initial margin" in cash or U.S. Treasury bills with its custodian (or the
broker, if legally permitted). The nature of initial margin in futures
transactions is different from that of margin in securities transactions in that
a futures contract's initial margin does not involve the borrowing by a Fund to
finance the transactions. Initial margin is in the nature of a performance bond
or good faith deposit on the contract which is returned to a Fund upon
termination of the futures contract, assuming all contractual obligations have
been satisfied.
A futures contract held by a Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day a Fund pays or
receives cash, called "variation margin, " equal to the daily change in value of
the futures contract. This process is known as "marking to market." Variation
margin does not represent a borrowing or loan by a Fund but is instead
settlement between a Fund and the broker of the amount one would owe the other
if the futures contract expired. In computing its daily net asset value, a Fund
will mark to market its open futures positions.
The Funds are also required to deposit and maintain margin when they write
call options on futures contracts.
5
<PAGE>
Purchasing Put Options on Portfolio Securities. The Funds other than the
----------------------------------------------
Fifth Third Money Market Funds may purchase put options on portfolio securities
to protect against price movements in particular securities in their respective
portfolios. A put option gives a Fund, in return for a premium, the right to
sell the underlying security to the writer (seller) at a specified price during
the term of the option.
Writing Covered Call Options on Portfolio Securities. The Funds other than
----------------------------------------------------
the Fifth Third Money Market Funds may also write covered call options to
generate income. As the writer of a call option, a Fund has the obligation, upon
exercise of the option during the option period, to deliver the underlying
security upon payment of the exercise price. A Fund may sell call options either
on securities held in its portfolio or on securities which it has the right to
obtain without payment of further consideration (or securities for which it has
segregated cash in the amount of any additional consideration).
Over-the-Counter Options. The Funds other than the Fifth Third Money Market
------------------------
Funds may purchase and write over-the-counter options on portfolio securities in
negotiated transactions with the buyers or writers of the options for those
options on portfolio securities held by a Fund and not traded on an exchange.
Collateralized Mortgage Obligations ("CMOs"). The U.S. Government
Securities Fund, the Quality Bond Fund, the Balanced Fund and the Bond Fund For
Income may invest in CMOs. Privately issued CMOs generally represent an
ownership interest in a pool of federal agency mortgage pass-through securities
such as those issued by the Government National Mortgage Association. The terms
and characteristics of the mortgage instruments may vary among pass-through
mortgage loan pools.
The market for such CMOs has expanded considerably since its inception. The
size of the primary issuance market and the active participation in the
secondary market by securities dealers and other investors make government-
related pools highly liquid.
Convertible Securities. The Quality Growth Fund, the Mid Cap Fund, the
Balanced Fund, the International Equity Fund and the Equity Income Fund may
invest in convertible securities. Convertible securities include fixed-income
securities that may be exchanged or converted into a predetermined number of
shares of the issuer's underlying common stock at the option of the holder
during a specified period. Convertible securities may take the form of
convertible preferred stock, convertible bonds or debentures, units consisting
of "usable" bonds and warrants or a combination of the features of several of
these securities. The investment characteristics of each convertible security
vary widely, which allows convertible securities to be employed for a variety of
investment strategies. Each of these Funds will exchange or convert the
convertible securities held in its portfolio into shares of the underlying
common stock when, in the Advisor's opinion, the investment characteristics of
the underlying common shares will assist the Fund in achieving its investment
objectives. Otherwise the Fund may hold or trade convertible securities. In
selecting convertible securities for the Fund, the Advisor evaluates the
investment characteristics of the convertible security as a fixed income
instrument and the investment potential of the underlying equity security for
capital
6
<PAGE>
appreciation. In evaluating these matters with respect to a particular
convertible security, the Advisor considers numerous factors, including the
economic and political outlook, the value of the security relative to other
investment alternatives, trends in the determinants of the issuer's profits, and
the issuer's management capability and practices.
Warrants. The Quality Growth Fund, the Mid Cap Fund, the Balanced Fund, the
International Equity Fund, and the Equity Income Fund may invest in warrants.
Warrants are basically options to purchase common stock at a specific price
(usually at a premium above the market value of the optioned common stock at
issuance) valid for a specific period of time. Warrants may have a life ranging
from less than a year to twenty years or may be perpetual. However, most
warrants have expiration dates after which they are worthless. In addition, if
the market price of the common stock does not exceed the warrant's exercise
price during the life of the warrant, the warrant will expire as worthless.
Warrants have no voting rights, pay no dividends, and have no rights with
respect to the assets of the corporation issuing them. The percentage increase
or decrease in the market price of the warrant may tend to be greater than the
percentage increase or decrease in the market price of the optioned common
stock.
Municipal Securities. The Ohio Tax Free Fund may invest in Ohio municipal
securities which have the characteristics set forth in their respective
prospectus. The Municipal Bond Fund and the Tax Exempt Money Market Fund may
invest in municipal securities of any state which have the characteristics set
forth in the prospectus.
Examples of Municipal Securities are:
. governmental lease certificates of participation issued by state or
municipal authorities where payment is secured by installment payments
for equipment, buildings, or other facilities being leased by the
state or municipality. Government lease certificates purchased by the
Fund will not contain nonappropriation clauses;
. municipal notes and tax-exempt commercial paper;
. serial bonds;
. tax anticipation notes sold to finance working capital needs of
municipalities in anticipation of receiving taxes at a later date;
. bond anticipation notes sold in anticipation of the issuance of
long-term bonds in the future;
. pre-refunded municipal bonds whose timely payment of interest and
principal is ensured by an escrow of U.S. government obligations; and
. general obligation bonds.
7
<PAGE>
Participation Interests. The Ohio Tax Free Fund, the Municipal Bond Fund
and the Tax Exempt Money Market Fund may invest in participation interests. The
financial institutions from which the Ohio Tax Free Fund, the Municipal Bond
Fund, and the Tax Exempt Money Market Fund may purchase participation interests
frequently provide or secure from another financial institution irrevocable
letters of credit or guarantees and give the Funds the right to demand payment
of the principal amounts of the participation interests plus accrued interest on
short notice (usually within seven days).
Variable Rate Municipal Securities. The Ohio Tax Free Fund, the Municipal
Bond Fund and the Tax Exempt Money Market Fund may invest in variable rate
municipal securities. Variable interest rates generally reduce changes in the
market value of municipal securities from their original purchase prices.
Accordingly, as interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable rate municipal securities than
for fixed income obligations. Many municipal securities with variable interest
rates purchased by the Funds are subject to repayment of principal (usually
within seven days) on the Funds' demand. The terms of these variable-rate demand
instruments require payment of principal and accrued interest from the issuer of
the municipal obligations, the issuer of the participation interests, or a
guarantor of either issuer.
Municipal Leases. The Ohio Tax Free Fund, the Municipal Bond Fund, and the
Tax Exempt Money Market fund may purchase municipal securities in the form of
participation interests which represent undivided proportional interests in
lease payments by a governmental or non-profit entity. The lease payments and
other rights under the lease provide for and secure the payments on the
certificates. Lease obligations may be limited by municipal charter or the
nature of the appropriation for the lease. In particular, lease obligations may
be subject to periodic appropriation. If the entity does not appropriate funds
for future lease payments, the entity cannot be compelled to make such payments.
Furthermore, a lease may provide that the certificate trustee cannot accelerate
lease obligations upon default. The trustee would only be able to enforce lease
payments as they become due. In the event of a default or failure of
appropriation, it is unlikely that the trustee would be able to obtain an
acceptable substitute source of payment. In determining the liquidity of
municipal lease securities, the Advisor, under the authority delegated by the
Trustees, will base its determination on the following factors: (a) whether the
lease can be terminated by the lessee; (b) the potential recovery, if any, from
a sale of the leased property upon termination of the lease; (c) the lessee's
general credit strength (e.g., its debt, administrative, economic and financial
characteristics and, prospects); (d) the likelihood that the lessee will
discontinue appropriating funding for the leased property because the property
is no longer deemed essential to its operations (e.g., the potential for an
"event of nonappropriation"); and (e) any credit enhancement or legal recourse
provided upon an event of nonappropriation or other termination of the lease.
Cash. From time to time, such as when suitable securities are not
available, the Funds may invest a portion of their assets in cash. Any portion
of a Fund's assets maintained in cash will reduce the Fund's return and, in the
case of a bond fund and Money Market fund, the Fund's yield.
8
<PAGE>
Foreign Currency Transactions. The International Equity Fund may engage in
foreign currency transactions.
Currency Risks. The exchange rates between the U.S. dollar and foreign
--------------
currencies are a function of such factors as supply and demand in the currency
exchange markets, international balances of payments, governmental intervention,
speculation and other economic and political conditions. Although the Fund
values its assets daily in U.S. dollars, the Fund may not convert its holdings
of foreign currencies to U.S. dollars daily. The Fund may incur conversion costs
when it converts its holdings to another currency. Foreign exchange dealers may
realize a profit on the difference between the price at which the Fund buys and
sells currencies.
The Fund will engage in foreign currency exchange transactions in
connection with its portfolio investments. The Fund will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market or through forward
contracts to purchase or sell foreign currencies.
Forward Foreign Currency Exchange Contracts. The Fund may enter into
-------------------------------------------
forward foreign currency exchange contracts in order to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and a foreign currency involved in an underlying transaction.
However, forward foreign currency exchange contracts may limit potential gains
which could result from a positive change in such currency relationships. The
Advisors believe that it is important to have the flexibility to enter into
forward foreign currency exchange contracts whenever it determines that it is in
the Fund's best interest to do so. The Fund will not speculate in foreign
currency exchange.
The Fund will not enter into forward foreign currency exchange contracts or
maintain a net exposure in such contracts when it would be obligated to deliver
an amount of foreign currency in excess of the value of its portfolio securities
or other assets denominated in that currency or, in the case of a "cross-hedge"
denominated in a currency or currencies that the Advisors believe will tend to
be closely correlated with that currency with regard to price movements.
Generally, the Fund will not enter into a forward foreign currency exchange
contract with a term longer than one year.
Foreign Currency Options. A foreign currency option provides the option
------------------------
buyer with the right to buy or sell a stated amount of foreign currency at the
exercise price on a specified date or during the option period. The owner of a
call option has the right, but not the obligation, to buy the currency.
Conversely, the owner of a put option has the right, but not the obligation, to
sell the currency.
When the option is exercised, the seller (i.e., writer) of the option is
obligated to fulfill the terms of the sold option. However, either the seller or
the buyer may, in the secondary market, close its position during the option
period at any time prior to expiration.
9
<PAGE>
A call option on foreign currency generally rises in value if the
underlying currency appreciates in value, and a put option on foreign currency
generally rises in value if the underlying currency depreciates in value.
Although purchasing a foreign currency option can protect the Fund against an
adverse movement in the value of a foreign currency, the option will not limit
the movement in the value of such currency. For example, if the Fund was holding
securities denominated in a foreign currency that was appreciating and had
purchased a foreign currency put to hedge against a decline in the value of the
currency, the Fund would not have to exercise their put option. Likewise, if the
Fund were to enter into a contract to purchase a security denominated in foreign
currency and, in conjunction with that purchase, were to purchase a foreign
currency call option to hedge against a rise in value of the currency, and if
the value of the currency instead depreciated between the date of purchase and
the settlement date, the Fund would not have to exercise its call. Instead, the
Fund could acquire in the spot market the amount of foreign currency needed for
settlement.
Special Risks Associated with Foreign Currency Options. Buyers and sellers
------------------------------------------------------
of foreign currency options are subject to the same risks that apply to options
generally. In addition, there are certain additional risks associated with
foreign currency options. The markets in foreign currency options are relatively
new, and the Fund's ability to establish and close out positions on such options
is subject to the maintenance of a liquid secondary market. Although the Fund
will not purchase or write such options unless and until, in the opinion of the
Advisors, the market for them has developed sufficiently to ensure that the
risks in connection with such options are not greater than the risks in
connection with the underlying currency, there can be no assurance that a liquid
secondary market will exist for a particular option at any specific time.
In addition, options on foreign currencies are affected by all of those
factors that influence foreign exchange rates and investments generally.
The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of the
option position may vary with changes in the value of either or both currencies
and may have no relationship to the investment merits of a foreign security.
Because foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having to deal in an
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis. Available
quotation information is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(i.e., less than $1 million) where rates may be less favorable. The interbank
market in foreign currencies is a global, around-the-clock market. To the extent
that the U.S. option markets are closed while the markets for the underlying
currencies remain open,
10
<PAGE>
significant price and rate movements may take place in the underlying markets
that cannot be reflected in the options markets until they reopen.
Foreign Currency Futures Transactions. By using foreign currency futures
-------------------------------------
contracts and options on such contracts, the Fund may be able to achieve many of
the same objectives as it would through the use of forward foreign currency
exchange contracts. The Fund may be able to achieve these objectives possibly
more effectively and at a lower cost by using futures transactions instead of
forward foreign currency exchange contracts.
Special Risks Associated with Foreign Currency Futures Contracts and
--------------------------------------------------------------------
Related Options. Buyers and sellers of foreign currency futures contracts are
- ---------------
subject to the same risks that apply to the use of futures generally. In
addition, there are risks associated with foreign currency futures contracts and
their use as a hedging device similar to those associated with options on
currencies, as described above.
Options on foreign currency futures contracts may involve certain
additional risks. Trading options on foreign currency futures contracts is
relatively new. The ability to establish and close out positions on such options
is subject to the maintenance of a liquid secondary market. To reduce this risk,
the Fund will not purchase or write options on foreign currency futures
contracts unless and until, in the opinion of the Advisors, the market for such
options has developed sufficiently that the risks in connection with such
options are not greater than the risks in connection with transactions in the
underlying foreign currency futures contracts. Compared to the purchase or sale
of foreign currency futures contracts, the purchase of call or put options on
futures contracts involves less potential risk to the Fund because the maximum
amount at risk is the premium paid for the option (plus transaction costs).
However, there may be circumstances when the purchase of a call or put option on
a futures contract would result in a loss, such as when there is no movement in
the price of the underlying currency or futures contract.
U.S. Government Obligations. The types of U.S. government obligations in
which any of the Funds may invest include direct obligations of the U.S.
Treasury, such as U.S. Treasury bills, notes, and bonds, and obligations issued
or guaranteed by U.S. government agencies or instrumentalities. These securities
are backed by:
. the full faith and credit of the U.S. Treasury;
. the issuer's right to borrow from the U.S. Treasury;
. the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentality issuing the obligations.
Variable Rate U.S. Government Securities. Some of the short-term U.S.
----------------------------------------
government securities that the Money Market Fund may purchase carry variable
interest rates. These securities have a rate of interest subject to adjustment
at least annually. This adjusted interest rate is ordinarily tied to some
objective standard, such as the 91-day U.S. Treasury bill rate.
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Variable interest rates will reduce the changes in the market value of such
securities from their original purchase prices. Accordingly, the potential for
capital appreciation or capital depreciation should not be greater than the
potential for capital appreciation or capital depreciation of fixed interest
rate U.S. government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities.
When-Issued and Delayed Delivery Transactions. Each Fund may enter into
when-issued and delayed delivery transactions. These transactions are made to
secure what is considered to be an advantageous price or yield for a Fund. No
fees or other expenses, other than normal transaction costs, are incurred.
However, liquid assets of a Fund sufficient to make payment for the securities
to be purchased are segregated on the Fund's records at the trade date. These
assets are marked-to-market daily and are maintained until the transaction has
been settled. The Funds do not intend to engage in when-issued and delayed
delivery transactions to an extent that would cause the segregation of more than
20% of the total value of their assets.
Repurchase Agreements. Each Fund may enter into repurchase agreements. A
repurchase agreement is an agreement whereby a fund takes possession of
securities from another party in exchange for cash and agrees to sell the
security back to the party at a specified time and price. To the extent that the
original seller does not repurchase the securities from a Fund, a Fund could
receive less than the repurchase price on any sale of such securities. In the
event that such a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by a Fund might be delayed pending court action.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers which are deemed by the
Advisors to be creditworthy pursuant to guidelines established by the Trustees.
Reverse Repurchase Agreements. The Funds may also enter into reverse
repurchase agreements. These transactions are similar to borrowing cash. In a
reverse repurchase agreement, a Fund transfers possession of a portfolio
instrument to another person, such as a financial institution, broker, or
dealer, in return for a percentage of the instrument's market value in cash and
agrees that on a stipulated date in the future it will repurchase the portfolio
instrument by remitting the original consideration plus interest at an agreed
upon rate. The use of reverse repurchase agreements may enable a Fund to avoid
selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous, but the ability to enter into reverse repurchase agreements
does not ensure that a Fund will be able to avoid selling portfolio instruments
at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of a Fund, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated on a Fund's records at the trade date. These securities are
marked to market daily and maintained until the transaction is settled.
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Lending of Portfolio Securities. Each Fund (other than U.S. Treasury Money
Market Fund) may lend portfolio securities. The collateral received when a Fund
lends portfolio securities must be valued daily and, should the market value of
the loaned securities increase, the borrower must furnish additional collateral
to the Fund. During the time portfolio securities are on loan, the borrower pays
the Fund any dividends or interest paid on such securities. Loans are subject to
termination at the option of a Fund or the borrower. A Fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or equivalent collateral
to the borrower or placing broker. A Fund would not have the right to vote
securities on loan, but would terminate the loan and regain the right to vote if
that were considered important with respect to the investment.
Restricted And Illiquid Securities. Each Fund may invest in securities
issued in reliance on the exemption from registration afforded by Section 4(2)
of the Securities Act of 1933. Section 4(2) securities are restricted as to
disposition under the federal securities laws and are generally sold to
institutional investors, such as the Funds, who agree that they are purchasing
such securities for investment purposes and not with a view to public
distributions. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) securities are normally resold to other institutional investors
like the Funds through or with the assistance of the issuer or investment
dealers who make a market in such securities, thus providing liquidity. The
Funds believe that Section 4(2) securities and possibly certain other restricted
securities which meet the criteria for liquidity established by the Trustees are
quite liquid. The Funds intend, therefore, to treat the restricted securities
which meet the criteria for liquidity established by the Trustees, including
Section 4(2) securities, as determined by the Advisors, as liquid and not
subject to the investment limitation applicable to illiquid securities.
The ability of the Trustees to determine the liquidity of certain
restricted securities is permitted under the Securities and Exchange commission
("SEC") staff position set forth in the adopting release for Rule 144A under the
Securities Act of 1933 (the "Rule"). The Rule is a non-exclusive safe harbor for
certain secondary market transactions involving securities subject to
restrictions on resale under federal securities laws. The Rule provides an
exemption from registration for resales of otherwise restricted securities to
qualified institutional buyers. The Rule was expected to further enhance the
liquidity of the secondary market for securities eligible for resale under Rule
144A. The Fund believes that the Staff of the SEC has left the question of
determining the liquidity of all restricted securities to the Trustees. The
Trustees consider the following criteria in determining the liquidity of certain
restricted securities: the frequency of trades and quotes for the security; the
number of dealers willing to purchase or sell the security and the number of
other potential buyers; dealer undertakings to make a market in the security;
and the nature of the security and the nature of the marketplace trades.
13
<PAGE>
Portfolio Turnover
The Funds will not attempt to set or meet portfolio turnover rates since
any turnover would be incidental to transactions undertaken in an attempt to
achieve the Funds' investment objectives. The following is a list of the
portfolio turnover rates for the Funds except the Money Market funds:
Fiscal year ended Fiscal year ended
July 31, 1999 July 31, 1998
------------------ ------------------
Government Securities Fund 93% 155%
Quality Bond Fund 349% 279%
Ohio Tax Free Fund 47% 42%
Quality Growth Fund 34% 45%
Mid Cap Fund 49% 44%
Balanced Fund 128% 135%
International Equity Fund 42% 39%
Equity Income Fund 69% 41%
Bond Fund For Income 104% 127%
Municipal Bond Fund 110% 121%
Cardinal Fund 15%* 15%**
Pinnacle Fund 51% 38%
Portfolio turnover for the Quality Bond Fund increased during the past fiscal
year from the immediately prior fiscal year because the Fund restructured its
portfolio to take advantage of the competitive pricing among new issues.
*reflects period October 1, 1998 through July 31, 1999.
** for the fiscal year ended September 30, 1998
Investment Limitations
Issuing Senior Securities and Borrowing Money. The Funds will not issue
senior securities except that a Fund may borrow money directly or through
reverse repurchase agreements in amounts up to one-third of the value of its
total assets, including the amount borrowed and except to the extent that a Fund
(with the exception of Ohio Tax Free Fund and Municipal Bond Fund) may enter
into futures contracts, as applicable. The Funds will not borrow money or engage
in reverse repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling a Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. No Fund (other than the Prime
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Money Market Fund and U.S. Treasury Money Market Fund) will purchase any
securities while any borrowings in excess of 5% of its total assets are
outstanding.
Selling Short and Buying on Margin. The Funds will not sell any securities
short or purchase any securities on margin, but may obtain such short-term
credits as are necessary for clearance of purchases and sales of securities.
The deposit or payment by the Funds (with the exception of Ohio Tax Free
Fund and Municipal Bond Fund) of initial or variation margin in connection with
futures contracts or related options transactions is not considered the purchase
of a security on margin.
Pledging Assets. The Prime Money Market Fund will not mortgage, pledge or
hypothecate any assets. The other Funds will not mortgage, pledge, or
hypothecate any assets, except to secure permitted borrowings. The Government
Money Market Fund, Tax Exempt Money Market Fund and U.S. Treasury Money Market
Fund only may pledge having a value not exceeding the lesser of the dollar
amounts borrowed or 10% of the value of total assets at the time of the pledge.
For purposes of this limitation, where applicable, (a) the deposit of assets in
escrow in connection with the writing of covered put or call options and the
purchase of securities on a when-issued basis and (b) collateral arrangements
with respect to: (i) the purchase and sale of stock options (and options on
stock indices) and (ii) initial or variation margin for futures contracts, will
not be deemed to be pledges of a Fund's assets.
Investing in Commodities. None of the Funds will purchase or sell
commodities, commodity contracts, or commodity futures contracts except to the
extent that the Funds (with the exception of Ohio Tax Free Fund, Government
Securities Fund and Municipal Bond Fund) may engage in transactions involving
futures contracts or options on futures contracts.
Investing in Real Estate. None of the Funds will purchase or sell real
estate, including limited partnership interests, although the Funds (with the
exception of Government Securities Fund) may invest in securities of issuers
whose business involves the purchase or sale of real estate or in securities
which are secured by real estate or interests in real estate.
Diversification of Investments. With respect to 75% of the value of their
respective total assets (and with respect to 100% of their total assets with
respect to Tax Exempt Money Market Fund, Government Money Market Fund and U.S.
Treasury Money Market Fund) a Fund (with the exception of Ohio Tax Free Fund),
will not purchase securities issued-by any one issuer (other than cash, cash
items or securities issued or guaranteed by the government of the United States
or its agencies or instrumentalities and repurchase agreements collateralized by
such securities), if as a result more than 5% of the value of their total assets
would be invested in the securities of that issuer. A Fund will not acquire more
than 10% of the outstanding voting securities of any one issuer.
Dealing in Puts and Calls. The Ohio Tax Free Fund, the Municipal Bond Fund
and the Tax Exempt Money Market Fund will not buy or sell puts, calls,
straddles, spreads, or any combination of these.
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<PAGE>
Concentration of Investments. The Government Securities Fund, Quality Bond
Fund, Quality Growth Fund, Mid Cap Fund, Balanced Fund and International Equity
Fund will not invest 25% or more of the value of their respective total assets
in any one industry, except that these Funds may invest more than 25% of the
value of its total assets in securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities and repurchase agreements
collateralized by such securities.
The Prime Money Market Fund will not invest more than 25% of the value of
its total assets in any one industry except commercial paper of finance
companies. However, the Prime Money Market Fund reserves the right to invest
more than 25% of its net assets in domestic bank instruments (such as time and
demand deposits and certificates of deposit), U.S. government obligations or
instruments secured by these Money Market instruments, such as repurchase
agreements. The Prime Money Market Fund will not invest more than 25% of its net
assets in instruments of foreign banks.
The Ohio Tax Free Fund, the Municipal Bond Fund and the Tax Exempt Money
Market Fund will not purchase securities if, as a result of such purchase, 25%
or more of the value of their respective total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Funds may invest as temporary investments more than 25% of the value of
their respective assets in cash or cash items, securities issued or guaranteed
by the U.S. government, its agencies or instrumentalities, or instruments
secured by these Money Market instruments, i.e., repurchase agreements.
Underwriting. A Fund will not underwrite any issue of securities, except as
a Fund may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations.
The above limitations cannot be changed with respect to a Fund without
approval of the holders or a majority of that Fund's Shares. The following
limitations may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in these limitations
becomes effective.
Investing in Restricted Securities. The Funds will not invest more than 10%
of the value of their respective net assets in securities that are subject to
restrictions on resale under federal securities law.
Investing in Illiquid Securities. The Funds other than the Money Market
funds, will not invest more than 15% of the value of their respective net assets
in illiquid securities, including, as applicable, repurchase agreements
providing for settlement more than seven days after notice, over-the-counter
options, certain restricted securities not determined by the Trustees to be
liquid, and non-negotiable time deposits with maturities over seven days. The
Money Market funds will not invest more than 10% of the value of their
respective net assets in illiquid securities.
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<PAGE>
Investing in Securities of Other Investment Companies. With respect to 100%
of their total assets (and for the Money Market Funds, with respect to 75% of
the Funds' total Assets), the Funds will limit their respective investments in
other investment companies to no more than 3% of the total outstanding voting
stock of any investment company, invest no more than 5% of their respective
total assets in any one investment company, and will invest no more than 10% of
their respective total assets in investment companies in general. The Funds will
purchase securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be noted that
investment companies incur certain expenses such as management fees and,
therefore, any investment by a Fund in shares of another investment company
would be subject to such expenses.
Investing in New Issuers. The Government Securities Fund, Quality Bond
Fund, Quality Growth Fund, Mid Cap Fund, Balanced Fund, International Equity
Fund and the Prime Money Market Fund will not invest more than 5% of the value
of their respective total assets in securities of issuers which have records of
less than three years of continuous operations, including the operation of any
predecessor.
The Ohio Tax Free Fund, the Municipal Bond Fund and the Tax Exempt Money
Market Fun will not invest more that 5% of the value of their respective total
assets in industrial development bonds where the principal and interest are the
responsibility of companies (or guarantors, where applicable) with less than
three years of continuous operations, including the operation of any
predecessor.
Investing in Issuers Whose Securities are Owned by Officers and Trustees of
the Trust. No Fund (other than the U.S. Treasury Money Market Fund, the Prime
Money Market Fund and the Government Money Market Fund) may purchase or retain
the securities of any issuer if the officers and Trustees of the Trust or its
investment advisor, owning individually more than 1/2 of 1% of the issuer's
securities, together own more than 5% of the issuer's securities.
Investing in Minerals. No Fund (other than the U.S. Treasury Money Market
Fund or the Government Money Market Fund may purchase interests in oil, gas, or
other mineral exploration or development programs or leases, except they may
purchase the securities of issuers which invest in or sponsor such programs.
Investing in Commodities, Commodity Contracts, or Real Estate. The Prime
Money Market Fund will not invest in commodities, commodity contracts, or real
estate, except that it may purchase Money Market instruments issued by companies
that invest in real estate or sponsor such interests. The Tax Exempt Money
Market Fund will not purchase or sell commodities, commodity contracts,
commodity futures contracts or real estate, including limited partnership
interests, although the Tax Exempt Money Market Fund may invest in the
securities of issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or interests in real
estate.
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<PAGE>
Arbitrage Transactions. No Fund (other than the Money Market funds) may
enter into transactions for the purpose of engaging in arbitrage.
Purchasing Securities to Exercise Control. No Fund (other than the Money
Market funds) may purchase securities of a company for the purpose of exercising
control or management.
Investing in Warrants. The Quality Growth Fund, Cardinal Fund, Mid Cap
Fund, Balanced Fund, International Equity Fund, and Equity Income Fund may not
invest more than 5% of their net assets in warrants, including those acquired in
units or attached to other securities. To comply with certain state
restrictions, a Fund will limit its investment in such warrants not listed on
the New York or American Stock Exchanges to 2% of its net assets. (If state
restrictions change, this latter restriction may be revised without notice to
shareholders.) For purposes of this investment restriction, warrants will be
valued at the lower of cost or market, except that warrants acquired by a Fund
in units with or attached to securities may be deemed to be without value.
Investing in Put Options. The International Equity Fund will not purchase
put options on securities or futures contracts, unless the securities or futures
contracts are held in the Fund's portfolio or unless the Fund in entitled to
them in deliverable form without further payment or after segregating cash in
the amount of any further payment.
Writing Covered Call Options. The International Equity Fund will not write
call options on securities or futures contracts unless the securities of futures
contracts are held in the Fund's portfolio or unless the Fund is entitled to
them in deliverable form without further payment or after segregating cash in
the amount of any further payment.
Except with respect to the Funds' policy of borrowing money, if a
percentage limitation is adhered to at the time of investment, a later increase
or decrease in percentage resulting from any change in value or net assets will
not result in a violation of such restriction. For purposes of its policies and
limitations, the Funds consider certificates of deposit and demand and time
deposits issued by a U.S. branch of a domestic bank or savings and loan having
capital, surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items."
The Ohio Tax Free Fund and the Municipal Bond Fund do not expect to borrow
money or pledge securities in excess of 5% of the value of their respective net
assets during the coming fiscal year.
Investment Risks (Ohio Tax Free Fund)
The State of Ohio's economy is a leading industrial state and exporter of
manufactured goods. During the past two decades, both the number and percentage
of manufacturing jobs, particularly in durable goods, has been declining. Job
growth in the state has been primarily in
18
<PAGE>
business services and distribution sectors. The state is largely concentrated in
motor vehicles and equipment, steel, rubber products and household appliances.
Because the State of Ohio and certain municipalities have large exposure to
these industries, trends in these industries, over the long term, may impact the
demographic and financial position of the State of Ohio and its municipalities.
To the degree that domestic manufacturers in industries to which Ohio
municipalities have exposure fail to make competitive adjustments, employment
statistics and disposable income of residents in Ohio may deteriorate, possibly
leading to population declines and erosion of municipality tax bases.
Both the economic trends above and the political climate in various
municipalities may have contributed to the decisions of various businesses and
individuals to relocate outside the state. A municipality's political climate in
particular may affect its own credit standing. For both the State of Ohio and
underlying Ohio municipalities, adjustment of credit ratings by the ratings
agencies may affect the ability to issue securities and thereby affect the
supply of obligations meeting the quality standards for investment by the Fund.
The state ended fiscal year 1998 with a positive budgetary fund balance of
approximately $953 million. Personal taxes have been cut in recent years, a
result of the strong economy. As of March 1998 the Budget Stabilization Fund had
a balance of $862 million, up from $828 million the end of fiscal year 1997. A
March 24, 1997, Ohio Supreme Court decision requires major changes in Ohio's
school funding arrangements. These changes pose significant but manageable
challenges and should not threaten the overall fiscal stability of the state.
The state has established procedures for municipal fiscal emergencies under
which joint state/local commissions are established to monitor the fiscal
affairs of a financially troubled municipality. The act, established in 1979,
requires the municipality to develop a financial plan to eliminate deficits and
cure any defaults. These procedures have been applied to approximately twenty-
four cities and villages, including the city of Cleveland; in nineteen of these
communities, the fiscal situation has been resolved and the procedures
terminated. This fiscal emergency legislation has been amended to include
counties and townships.
The foregoing discussion only highlights some of the significant financial
trends and problems affecting the State of Ohio and underlying municipalities.
Special Restriction on Fifth Third Government Money Market Fund
The Fund will invest at least 65% of total assets in short-term obligations
issued or guaranteed as to principal or interest by the U.S. Government, its
agencies or instrumentalities.
Special Restriction on Fifth Third U.S. Treasury Money Market Fund
The Fund will invest at least 65% of total assets in short-term obligations
issued by the U.S. Treasury.
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FIFTH THIRD FUNDS MANAGEMENT
Officers and Trustees
Officers and Trustees of the Trust are listed with their addresses,
principal occupations, and present positions. None of the Trustees are
"interested persons" of Fifth Third Bank (the "Advisor"), Fifth Third Bancorp,
The BISYS Group, Inc., BISYS Fund Services, Inc., BISYS Fund Services Ohio,
Inc., or BISYS Fund Services Limited Partnership, as that term is defined in
Section 2(a)(19) of the 1940 Act.
Albert E. Harris, 5905 Graves Road, Cincinnati, OH 45243. Birthdate: July
2, 1932. Chairman of the Board of Trustees of the Trust, formerly Chairman
of the Board EDB Holdings, Inc. (retired July, 1993).
Edward Burke Carey, 394 East Town Street, Columbus, OH 43215. Birthdate:
July 2, 1945. Member of the Board of Trustees, President of Carey Leggett
Realty Advisors.
Lee A. Carter, 425 Walnut Street, Cincinnati, OH 45202. Birthdate: December
17, 1938. Member of the Board of Trustees, formerly President, Local
Marketing Corporation (retired December 31, 1993).
Stephen G. Mintos, 3435 Stelzer Road, Columbus, Ohio 43219-3035. Birthdate:
February 5, 1954. President of the Trust, employee of BISYS Fund Services,
Inc.
Jeffrey C. Cusick, 3435 Stelzer Road, Columbus, Ohio 43219-3035. Birthdate:
May 19, 1959. Vice President of the Trust, and formerly the Secretary and
Treasurer of the Trust, employee of BISYS Fund Services, Inc.; from
September 1993 to July 1995, Assistant Vice President, Federated
Administrative Services.
Rodney L. Ruehle, 3435 Stelzer Road, Columbus, Ohio 43219-3035. Birthdate:
April 26, 1968. Secretary of the Trust, and employee of BISYS Fund
Services, Limited Partnership.
Gary R. Tenkman, 3435 Stelzer Road, Columbus, Ohio 43219-3035. Birthdate:
September 16, 1970. Treasurer of the Trust, and employee of BISYS Fund
Services, Limited Partnership.
Karen L. Blair, 3435 Stelzer Road, Columbus, Ohio 43219-3035. Birthdate:
February 26, 1966. Assistant Secretary and Assistance Treasurer of the
Trust, and employee of BISYS Fund Services, Limited Partnership.
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<PAGE>
Trust Ownership
As of November 15, 1999, the Officers and Trustees owned less than 1% of
any class of any Fund.
As of November 15, 1999, the following persons owned 5% or more of any
class of Shares of a Fund:
Fifth Third Quality Growth Fund-Investment A Shares
BHC Securities Inc. 5,471,985.874 97.97%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market St. #1200
Philadelphia, PA 19103-3212
Fifth Third Quality Growth Fund-Investment C Shares:
BHC Securities Inc. 434,322.406 99.02%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market St. #1200
Philadelphia, PA 19103-3212
Fifth Third Quality Growth Fund-Institutional Shares:
Fifth Third Bank 13,032,501.704 50.24%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 1090F2
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 7,615,585.271 29.36%
Trust and Investment Services (R)
Attn: Trust Accounting Dept MD 1090F2
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 5,263,915.724 20.29%
Expediter
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Cardinal Fund-Investment A Shares:
BHC Securities Inc. 4,821,224.517 40.24%
One Commerce Square
2005 Market Street
Philadelphia, PA 19103
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<PAGE>
Fifth Third Cardinal Fund-Investment C Shares:
BHC Securities Inc. 31,495.021 64.78%
Trade House Accounting
Attn: Mutual Fund Department
2005 Market St., 11th Floor
Philadelphia, PA 19103
Fifth Third Cardinal Fund-Institutional Shares:
Fifth Third Bank 69,187.802 34.93%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 128,859.808 65.07%
Trust and Investment Services (R)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square
Cincinnati, OH 45263
Fifth Third Pinnacle Fund-Investment A Shares:
BHC Securities Inc. 1,357,067.476 98.46%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Pinnacle Fund-Investment C Shares:
BHC Securities Inc. 162,106.472 98.74%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Pinnacle Fund-Institutional Shares:
Fifth Third Bank 509,230.517 29.71%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
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<PAGE>
Fifth Third Bank 171,364.642 10.02%
Trust and Investment Services (R)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 371,291.536 21.70%
Expediter
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Equity Income Fund-Investment A Shares:
BHC Securities Inc. 1,230,390.979 99.13%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Equity Income Fund-Investment C Shares:
BHC Securities Inc. 81,777.165 98.76%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Equity Income Fund-Institutional Shares:
Fifth Third Bank 8,552,904,954 95.01%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Balanced Fund-Investment A Shares:
BHC Securities Inc. 4,596,080.766 91.95%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Balanced Fund-Investment C Shares:
BHC Securities Inc. 412,368.705 98.52%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
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<PAGE>
Fifth Third Balanced Fund-Institutional Shares:
Fifth Third Bank 1,075,790.554 12.17%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 1090F2
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 4,131,679.723 46.75%
Trust and Investment Services (R)
Attn: Trust Accounting Dept MD 1090F2
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 3,625,357.975 41.02%
Expediter
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Mid Cap Fund-Investment A Shares:
BHC Securities Inc. 1,562,232.821 91.60%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Mid Cap Fund-Investment C Shares:
BHC Securities Inc. 48,105.524 100.00%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Mid Cap Fund-Institutional Shares:
Fifth Third Bank 6,274,297.844 51.66%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 1090F2
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 3,696,217.356 30.43%
Trust and Investment Services (R)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 2,174,051.562 17.90%
Expediter
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
24
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fifth Third International Equity Fund-Investment A Shares:
BHC Securities Inc. 454,600.589 99.19%
Trade House Accounting
2005 Market Street
Philadelphia, PA 19103
Fifth Third International Equity Fund-Investment C Shares:
BHC Securities Inc. 15,999.731 89.81%
Trade House Accounting
2005 Market Street
Philadelphia, PA 19103
Donaldson Lufkin Jenrette 1,813.644 10.18%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
Fifth Third International Equity Fund-Institutional Shares:
Fifth Third Bank & Investment Services 8,542,921.012 63.16%
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank & Investment Services 4,439,013.025 32.82%
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bond Fund for Income-Investment A Shares:
BHC Securities Inc. 1,440,670.401 46.14%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Bond Fund for Income-Investment C Shares:
BHC Securities Inc. 44,771.550 100.00%
Trade House Account
Attn: Mutual Funds
1 commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Bond Fund for Income-Institutional Shares:
Fifth Third Bank 16,170,312.747 96.25%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fifth Third Quality Bond Fund-Investment A Shares:
BHC Securities Inc. 1,036,245.699 99.38%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street, #1200
Philadelphia, PA 19103-3212
Fifth Third Quality Bond Fund-Investment C Shares:
BHC Securities Inc. 84,061.408 100.00%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street, #1200
Philadelphia, PA 19103-3212
Fifth Third Quality Bond Fund Institutional Shares:
Fifth Third Bank 6,440,162.376 43.52%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 6,895,616.810 46.60%
Trust and Investment Services (R)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 1,319,843.686 8.92%
Expediter
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Government Securities Fund-Investment A Shares:
BHC Securities Inc. 372,011.440 98.54%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Government Securities Fund-Investment C Shares:
BHC Securities Inc. 39,248.088 100.00%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
</TABLE>
26
<PAGE>
<TABLE>
<S> <C> <C>
Fifth Third Government Securities Fund-Institutional Shares:
Fifth Third Bank 2,453,533.790 53.49%
Trust and Investment Securities (C)
Attn: Trust Account Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 1,475,293.138 32.17%
Trust and Investment Securities (R)
Attn: Trust Account Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank 657,737.631 14.34%
Expediter
Attn: Trust Account Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Municipal Bond Fund-Investment A Shares:
BHC Securities Inc. 25,948.211 95.08%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Municipal Bond Fund-Institutional Shares:
Fifth Third Bank 9,827,948.746 99.73%
Trust and Investment Securities (C)
Attn: Trust Account Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Ohio Tax Free Fund-Investment A Shares:
BHC Securities Inc. 2,113,994.104 99.91%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
Fifth Third Ohio Tax Free Fund-Investment C Shares:
BHC Securities Inc. 117,594.773 99.59%
Trade House Account
Attn: Mutual Funds
1 Commerce Square 2005 Market Street #1200
Philadelphia, PA 19103-3212
</TABLE>
27
<PAGE>
<TABLE>
<S> <C> <C>
Fifth Third Ohio Tax Free Fund-Institutional Shares:
Fifth Third Bank 18,008,713.416 98.43%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Government Money Market Fund-Investment A Shares:
Fifth Third Bank Trust Dept 320,532,227.900 91.94%
Attn: Kim Haney
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Government Money Market Fund-Institutional Shares:
Fifth Third Bank Trust Dept 251,071,044.300 100.00%
Attn: Kim Haney
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Prime Money Market Fund-Investment A Shares:
Fifth Third Bank Trust Dept 101,267,670.830 99.98%
Attn: Kim Haney
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Prime Money Market Fund-Institutional Shares:
Fifth Third Bank Trust Dept 347,733,272.620 92.92%
Attn: Kim Haney
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Tax Exempt Money Market Fund-Investment A Shares:
Fifth Third Bank 22,696,917.270 86.07%
Trust and Investment Services
Attn: Diame Harmening MD 1090F2
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Tax Exempt Money Market Fund-Institutional Shares:
Fifth Third Bank 70,729,868.250 100.00%
Trust and Investment Services (C)
Attn: Trust Accounting Dept MD 109048
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third U.S. Treasury Money Market Fund-Institutional Shares:
Fifth Third Bank Trust Dept 750,239,637.870 84.19%
Attn: Kim Haney
38 Fountain Square Plaza
Cincinnati, OH 45202
</TABLE>
28
<PAGE>
Trustees' Compensation
Aggregate Compensation
Name and Position with Trust from Trust*+
- ---------------------------- ------------
Edward Burke Carey, Trustee $7,800
Lee A. Carter, Trustee $7,800
Albert E. Harris, Trustee, Chairman of the Board $9,800
- ----------------
* Information is furnished for the fiscal year ended July 31, 1999. The Trust
is the only investment company in the Fund complex.
+ The aggregate compensation is provided for the Trust which is comprised of
sixteen portfolios.
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
Investment Advisors to the Trust
The Trust's investment advisors to all Funds other than the Pinnacle Fund
is Fifth Third Bank. It provides investment advisory services through its Trust
and Investment Division. The Trust's advisor to the Pinnacle Fund is Heartland.
Fifth Third Bank and Heartland are wholly-owned subsidiaries of Fifth Third
Bancorp.
Neither advisor shall be liable to the Trust, a Fund, or any shareholder of
any of the Funds for any losses that may be sustained in the purchase, holding,
or sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the Trust.
Because of the internal controls maintained by Fifth Third Bank and
Heartland to restrict the flow of non-public information, a Fund's investments
are typically made without any knowledge of Fifth Third Bank's, Heartland's or
affiliates' lending relationship with an issuer.
29
<PAGE>
Advisory Fees
For its advisory services, Fifth Third Bank receives an annual investment
advisory fee as described in the prospectus. The following shows all investment
advisory fees incurred by the Funds and the amounts of those fees that were
voluntarily waived or reimbursed by the Advisor for the fiscal years ended July
31, 1999, July 31, 1998, and July 31, 1997 (amounts in thousands):
<TABLE>
<CAPTION>
Year ended Amount Year ended Amount Year ended Amount
Fund Name July 31, 1999 Waived-1999 July 31, 1998 Waived-1998 July 31, 1997 Waived-1997
<S> <C> <C> <C> <C> <C> <C>
Government Securities Fund $ 261 $ 38 $ 228 $ 33 $ 234 $ 46
Quality Bond Fund 680 -- 545 -- 483 --
Ohio Tax Free Bond Fund 1,122 79 980 -- 813 --
Quality Growth Fund 4,920 -- 3,810 -- 2,328 --
Mid Cap Fund 1,753 -- 1,725 -- 1,146 --
Balanced Fund 1,673 -- 1,217 -- 861 --
International Equity Fund 1,634 -- 1,471 -- 1,361 --
Equity Income Fund 1,311 -- 1,088 -- 442 --
Bond Fund For Income 1,369 -- 938 -- 411 --
Municipal Bond Fund 661 -- 591 -- 282 --
Cardinal Fund 1,364* -- n/a n/a n/a n/a
Pinnacle Fund 586 -- 129 -- n/a n/a
Government Money Market Fund 2,789 -- 1,284 52 986 135
Prime Money Market Fund 1,657 83 1,762 88 1,358 139
Tax Exempt Money Market Fund 185* 60 n/a n/a n/a n/a
U.S. Treasury Money Market Fund 3,707 1,298 2,795 978 1,966 655
</TABLE>
*Reflects operations for the period October 1, 1998 through July 31, 1999.
Sub-advisor
Morgan Stanley Asset Management, Inc. is the sub-advisor to International
Equity Fund under the terms of a Sub-advisory Agreement between Fifth Third Bank
and Morgan Stanley Asset Management, Inc.
Sub-advisory Fees
For its sub-advisory services, Morgan Stanley Asset Management, Inc.
receives an annual sub-advisory fee paid by the Advisor as described in the
prospectus.
For the year ended July 31, 1997, the Sub-advisor earned fees from
International Equity Fund of $680,483, none of which was waived. For the year
ended July 31, 1998, the Sub-advisor earned fees from International Equity Fund
of $777,259, none of which was waived. For the year ended July 31, 1999, the
Sub-advisor earned fees from International Equity Fund of $735,375, none of
which was waived.
Administrative Services
30
<PAGE>
BISYS Fund Services L.P., 3435 Stelzer Road, Columbus, Ohio 43219, provided
administrative personnel and services to the Funds for the fees set forth in the
prospectus. The following shows all fees earned by BISYS and the amounts of
those fees that were voluntarily waived. For the years ended July 31, 1997 and
July 31, 1998 and July 31, 1999 (Amounts in Thousands):
<TABLE>
<CAPTION>
Year ended Amount Year ended Amount Year ended Amount
Fund Name July 31, 1999 Waived-1999 July 31, 1998 Waived-1998 July 31, 1997 Waived-1997
<S> <C> <C> <C> <C> <C> <C>
Government Securities Fund $ 83 $ 46 $ 76 $ 41 $ 55 $ 14
Quality Bond Fund 217 120 180 99 114 30
Ohio Tax Free Fund 358 176 324 142 198 11
Quality Growth Fund 1,079 290 865 100 397 17
Mid Cap Fund 385 156 383 116 192 16
Balanced Fund 367 91 277 116 141 30
International Equity Fund 292 -- 265 -- 166 --
Equity Income Fund 288 75 247 113 85 37
Bond Fund For Income 437 70 310 111 114 50
Municipal Bond Fund 211 116 196 108 77 33
Cardinal Fund 400* 25 n/a n/a n/a n/a
Pinnacle Fund 129 9 22 11 n/a n/a
Government Money Market Fund 1,245 697 582 321 301 84
Prime Money Market Fund 741 372 801 441 426 128
Tax Exempt Money Market Fund 66* 37 n/a n/a n/a n/a
U.S. Treasury Money Market Fund 1,659 927 1,267 699 610 177
</TABLE>
*Reflects operations for the period October 1, 1998 through July 31, 1999.
Fifth Third Bank performs sub-administration services on behalf of each
Fund, for which it receives compensation from BISYS Fund Services L.P. For the
years ended July 31, 1997, July 31, 1998 and July 31, 1999, Fifth Third Bank
earned the following sub-administrative fees (amounts in thousands):
Year Ended Year Ended Year Ended
Fund Name July 31, 1997 July 31, 1998 July 31, 1999
Government Securities Fund $11 $10 $12
Quality Bond Fund
Ohio Tax Free Fund
Quality Growth Fund
Mid Cap Fund
Balanced Fund
International Equity Fund
Equity Income Fund
Bond Fund for Income
Municipal Bond Fund
Cardinal Fund n/a n/a
Pinnacle Fund n/a
Government Money Market Fund
Prime Money Market Fund
Tax Exempt Money Market Fund n/a n/a
U.S. Treasury Money Market Fund
31
<PAGE>
Under the custodian agreement, Fifth Third Bank holds each Fund's portfolio
securities and keeps all necessary records and documents relating to its duties.
Pursuant to an agreement with Fifth Third Bank, The Bank of New York, acts as
the International Equity Fund's sub-custodian for foreign assets held outside
the United States and employs sub-custodians. Fees for custody services are
based upon the market value of Fund securities held in custody plus out-of-
pocket expenses. For fiscal years ended July 31, 1997, July 31, 1998 and July
31, 1999 (amounts in thousands), those fees were approximately $388,000 $449,000
and $510,000 respectively, none of which was waived.
Transfer Agent and Dividend Disbursing Agent
Fifth Third Bank serves as transfer agent and dividend disbursing agent for
the Funds. The fee paid to the transfer agent is based upon the size, type and
number of accounts and transactions made by shareholders.
Fifth Third Bank also maintains the Trust's accounting records. The fee
paid for this service is based upon the level of the Funds' average net assets
for the period plus out-of-pocket expenses.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Advisors and Sub-advisor look for prompt execution of
the order at a favorable price. In working with dealers, the Advisors and Sub-
advisor will generally use those who are recognized dealers in specific
portfolio instruments, except when a better price and execution of the order can
be obtained elsewhere. The Advisors and Sub-advisor make decisions on portfolio
transactions and selects brokers and dealers subject to guidelines established
by the Trustees.
The Advisors and Sub-advisor may select brokers and dealers who offer
brokerage and research services. These services may be furnished directly to the
Funds or to the Advisors and Sub-advisor and may include, advice as to the
advisability of investing in securities, security analysis and reports, economic
studies, industry studies, receipt of quotations for portfolio evaluations, and
similar services.
The Advisors and Sub-advisor and their affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research services
to execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to the value
of the brokerage and research services provided. For the fiscal year ended July
31, 1999, the Funds paid brokerage commissions in exchange for brokerage and
research services described above in the following amounts: Ohio Tax Free Bond,
$2,767 of $2,767 total brokerage commissions paid; Quality Growth, $87,290 of
the $438,887 total brokerage commissions paid; Mid Cap, $44,181 of the $309,794
total brokerage commissions paid; Balanced, $26,749 of the $142,315 total
brokerage commissions
32
<PAGE>
paid; Equity Income, $67,699 of the $263,461 total brokerage commissions paid;
Bond Fund for Income, $700 of the $700 total brokerage commissions paid;
Municipal Bond, $2,740 of the $2,740 total brokerage commissions paid; Cardinal,
$196,608 of the $196,608 total brokerage commissions paid; and Pinnacle,
$134,823 of the $134,823 total brokerage commissions paid.
Research services provided by brokers may be used by the Advisors and Sub-
advisor in advising the Funds and other accounts. To the extent that receipt of
these services may supplant services for which the Advisors and Sub-advisor or
their affiliates might otherwise have paid, it would tend to reduce their
expenses.
Although investment decisions for the Funds are made independently from
those of the other accounts managed by the Advisors and Sub-advisor, the
Advisors and Sub-advisor may invest Fund assets in the same securities and at
the same time as they invest assets of other accounts that they manage. When one
of the Funds and one or more other accounts managed by the Advisors and Sub-
advisor are prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a manner
believed by the Advisors and Sub-advisor to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the Funds or
the size of the position obtained or disposed of by the Funds. In other cases,
however, it is believed that coordination and the ability to participate in
volume transactions will be to the benefit of the Funds.
During the fiscal year ended July 31, 1999, some of the Funds acquired
securities of the Funds' regular brokers or dealers or their parents as follows
(Amounts in Thousands):
<TABLE>
<CAPTION>
Fund Security Principal/Shares Market Value
- ---- -------- ---------------- ------------
<S> <C> <C> <C>
Quality Bond Fund Bear Stearns Co., Inc., 6.45% $5,000,000 $4,909,000
due 08/01/02
Balanced Fund Salomon Smith Barney Holdings, $3,000,000 $3,005,000
7.38%, due 05/15/07
T. Rowe Price Associates, Inc. 80,000 $2,800,000
common stock
A.G. Edwards, Inc. 30,000 $ 829,000
common stock
International Equity Deutsche Bank, AG 9,383 $ 595,000
Fund common stock
Equity Income Fund A.G. Edwards, Inc. 78,000 $2,155,000
common stock
</TABLE>
33
<PAGE>
<TABLE>
<S> <C> <C> <C>
Cardinal Fund T. Rowe Price Associates, Inc. 60,000 $2,100,000
common stock
Mid Cap Fund A.G. Edwards, Inc. 170,000 $4,696,000
common stock
T. Rowe Price Associates, Inc. 220,000 $7,700,000
common stock
</TABLE>
PURCHASING SHARES
Shares of the Funds are sold at their net asset value with an applicable
sales charge or contingent deferred sales charge on days the New York Stock
Exchange and the Federal Reserve Bank of Cleveland are open for business. The
procedure for purchasing Investment A Shares, Investment C Shares or
Institutional Class Shares of the Funds is explained in the prospectus for such
Fund and Class under "Investing in the Funds."
Distribution Plan and Administrative Services Agreement (Investment C Shares
Only)
With respect to Investment A Shares and Investment C Shares of the Funds,
the Trust has adopted a Plan pursuant to Rule l2b-1 which was promulgated by the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940. The Plan provides for payment of fees to the distributor to finance any
activity which is principally intended to result in the sale of a Fund's Shares
subject to the Plan. Such activities may include the advertising and marketing
of Shares; preparing printing, and distributing prospectuses and sales
literature to prospective shareholders, brokers, or administrators; and
implementing and operating the Plan. Pursuant to the Plan, the distributor may
enter into agreements to pay fees to brokers for distribution and administrative
support services and to other participating financial institutions and persons
for distribution assistance and support services to the Funds and their
shareholders. The administrative services are provided by a representative who
has knowledge of the shareholder's particular circumstances and goals, and
include, but are not limited to: communicating account openings; communicating
account closings; entering purchase transactions; entering redemption
transactions; providing or arranging to provide accounting support for all
transactions, wiring funds and receiving funds for Share purchases and
redemptions, confirming and reconciling all transactions, reviewing the activity
in Fund accounts, and providing training and supervision of broker personnel;
posting and reinvesting dividends to Fund accounts or arranging for this service
to be performed by the Funds' transfer agent; and maintaining and distributing
current copies of prospectuses and shareholder reports to the beneficial owners
of Shares and prospective shareholders.
The Trustees expect that the Plan will result in the sale of a sufficient
number of Shares so as to allow a Fund to achieve economic viability. It is also
anticipated that an increase in
34
<PAGE>
the size of a Fund will facilitate more efficient portfolio management and
assist a Fund in seeking to achieve its investment objective.
Pursuant to the Plan, with respect to Investment A Shares, the Funds are
authorized to pay the distributor a monthly distribution fee computed at the
annual rate of up to 0.25% of the average aggregate net asset value of the
Investment A Shares of each applicable Fund held during the month. As of the
date of this Statement of Additional Information, the Funds are not accruing or
paying l2b-1 fees for Investment A Shares. The Funds do not intend to accrue or
pay 12b-1 fees with respect to Investment A Shares until either separate
classes of shares have been created for certain fiduciary investors for the
Funds or a determination is made that such investors will be subject to the
12b-1 fees.
Pursuant to the Plan, with respect to Investment C Shares, the Funds are
authorized to pay the distributor a monthly distribution fee computed at the
annual rate of up to 0.75% of the average aggregate net asset value of the
Investment C Shares of each applicable Fund held during the month. For the
fiscal year ended July 31, 1999, the distributor received $119,000 pursuant to
the Plan.
With respect to Investment C Shares, the Trust may enter into an
Administrative Service Agreement to permit the payment of fees to financial
institutions, including Fifth Third Bank, to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. Benefits to shareholders of Investment C
Shares of the Funds may include: (1) providing personal services to
shareholders; (2) investing shareholder assets with a minimum of delay and
administrative detail; (3) enhancing shareholder recordkeeping systems; and (4)
responding promptly to shareholders' requests and inquiries concerning their
accounts.
For the fiscal year ended July 31, 1999, the Funds paid $59,000 to Fifth
Third Bank to compensate BHC Securities, Inc. for providing administrative
services to Investment C Shares of the Funds.
Conversion to Federal Funds
It is the Funds' policy to be as fully invested as possible so that maximum
interest or dividends may be earned. To this end, all payments from shareholders
must be in federal funds or be converted into federal funds. Fifth Third Bank
acts as the shareholder's agent in depositing checks and converting them to
federal finds.
35
<PAGE>
Exchanging Securities for Fund Shares
Investors may exchange securities they already own for Shares of a Fund or
they may exchange a combination of securities and cash for Fund Shares. Any
securities to be exchanged must meet the investment objective and policies of
each Fund, must have a readily ascertainable market value, must be liquid, and
must not be subject to restrictions on resale. An investor should forward the
securities in negotiable form with an authorized letter of transmittal to Fifth
Third Bank. A Fund will notify the investor of its acceptance and valuation of
the securities within five business days of their receipt by the advisor.
A Fund values such securities in the same manner as a Fund values its
assets. The basis of the exchange will depend upon the net asset value of Shares
of a Fund on the day the securities are valued. One Share of a Fund will be
issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be
considered in valuing the securities. All interest, dividends, subscription,
conversion, or other rights attached to the securities become the property of a
Fund, along with the securities.
Payments to Dealers.
Financial professionals who sell shares of Fifth Third Funds and perform
services for fund investors may receive sales commissions, annual fees and other
compensation. Such compensation is paid by the Distributor using money from
sales charges, distribution/service (12b-1) fees and its other resources. From
time to time, the Distributor may elect to pay up to the following amounts:
<TABLE>
<CAPTION>
AMOUNT OF INVESTMENT ($) INVESTMENT SHARES AMOUNT OF INVESTMENT ($) INVESTMENT SHARES
- ------------------------------------------ ------------------ ------------------------ ------------------
<S> <C> <C> <C>
Under 50,000 3.825% Any Amount 1%
50,000 but under 100,000 3.40
100,000 but under 150,000 2.55
150,000 but under 250,000 1.70
250,000 but under 500,000 0.85
500,000 and above NONE
</TABLE>
Brokers and agents may charge a transaction fee on the purchase or sale of
shares by shareholders.
DETERMINING NET ASSET VALUE
Net asset values of the Funds generally, other than the Money Market funds,
change each day. The days on which the net asset value is calculated by these
Funds are described in the prospectus. The Money Market funds attempt to
maintain a net asset value per share of $1.00.
36
<PAGE>
Determining Market Value of Securities
The value of the Funds' portfolio securities (with the exception of Ohio
Tax Free Fund, Municipal Bond Fund and the Money Market funds) are determined as
follows:
. for equity securities, according to the last sale price on a national
securities exchange, if available;
. in the absence of recorded sales for listed equity securities, according
to the mean between the last closing bid and asked prices;
. for unlisted equity securities, the latest bid prices;
. for bonds and other fixed income securities, as determined by an
independent pricing service;
. for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost; or
. for all other securities, at fair value as determined in good faith by
the Board of Trustees.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may reflect institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.
The Funds will value futures contracts, options and put options on
financial futures at their market values established by the exchanges at the
close of option trading on such exchanges unless the Trustees determine in good
faith that another method of valuing option positions is necessary to appraise
their fair value.
Valuing Municipal Bonds
With respect to Ohio Tax Free Fund and Municipal Bond Fund, the Trustees
use an independent pricing service to value municipal bonds. The independent
pricing service takes into consideration yield, stability, risk, quality, coupon
rate, maturity, type of issue, trading characteristics, special circumstances of
a security or trading market, and any other factors or market data it considers
relevant in determining valuations for normal institutional size trading units
of debt securities, and does not rely exclusively on quoted prices.
37
<PAGE>
Use of Amortized Cost
The Trustees have decided that the fair value of debt securities authorized
to be purchased by the Money Market funds and by the other Fund with remaining
maturities of 60 days or less at the time of purchase may be their amortized
cost value, unless the particular circumstances of the security indicate
otherwise. Under this method, portfolio instruments and assets are valued at the
acquisition cost as adjusted for amortization of premium or accumulation of
discount rather than at current market value. The Trustees continually assess
this method of valuation and recommends changes where necessary to assure that
the Fund's portfolio instruments are valued at their fair value as determined in
good faith by the Trustees.
Monitoring Procedures
For the Money Market funds, the Trustees' procedures include monitoring the
relationship between the amortized cost value per share and the net asset value
per share based upon available indications of market value. The Trustees will
decide what, if any, steps should be taken if there is a difference of more than
0.50% of 1% between the two value. The Trustees will take any steps they
consider appropriate (such as redemption in kind or shortening the average
portfolio maturity) to minimize any material dilution or other unfair results
arising from differences between the two methods of determining net asset value.
Investment Restrictions
For the Money Market funds, the Rule requires that a Money Market fund
limit its investments to instruments that, in the opinion of the Trustees,
present minimal credit risks and if rated, have received the requisite rating
from one or more nationally recognized statistical rating organizations. If the
instruments are not related, the Trustees must determine that they are of
comparable quality. Shares of investment companies purchased by a Money Market
fund will meet these same criteria and will have investment policies consistent
with the Rule. The Rule also requires a Money Market fund to maintain a dollar-
weighted average portfolio maturity (not more than 90 days) appropriate to the
objective of maintaining a stable net asset value of $1.00 per share. In
addition, no instruments with a remaining maturity of more than 397 days can be
purchased by a Money Market fund.
Should the disposition of a portfolio security result in a dollar-weighted
average portfolio maturity of more than 90 days, a Money Market fund will invest
its available cash to reduce the average maturity to 90 days or less as soon as
possible.
A Money Market fund may attempt to increase yield by trading portfolio
securities to take advantage of short-term market variations. This policy may,
from time to time, result in high portfolio turnover. Under the amortized cost
method of valuation, neither the amount of daily income nor the net asset value
is affected by any unrealized appreciation or depreciation of the portfolio.
38
<PAGE>
In periods of declining interest rates, the indicated daily yield on shares
of a Money Market fund computed by dividing the annualized daily income on the
Fund's portfolio by the net asset value computed as above may tend to be higher
than a similar computation made by using a method of valuation based upon market
prices and estimates.
In periods of rising interest rates, the indicated daily yield on shares of
a Money Market fund computed the same way may tend to be lower than a similar
computation made by using a method of calculation based upon market prices and
estimates.
Trading in Foreign Securities
Trading in foreign securities may be completed at times which vary from the
closing of the New York Stock Exchange. In computing the net asset value,
International Equity Fund values foreign securities at the latest closing price
on the exchange on which they are traded immediately prior to the closing of the
New York Stock Exchange. Certain foreign currency exchange rates may also be
determined at the latest rate prior to the closing of the New York Stock
Exchange. Foreign securities quoted in foreign currencies are translated into
U.S. dollars at current rates. Occasionally, events that affect these values and
exchange rates may occur between the times at which they are determined and the
closing of the New York Stock Exchange. If such events materially affect the
value of portfolio securities, these securities may be valued at their fair
value as determined in good faith by the Trustees, although the actual
calculation may be done by others.
REDEEMING SHARES
Shares are redeemed at the next computed net asset value after a Fund
receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although Fifth Third Bank does not charge
for telephone redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions.
Investment C Shares redeemed within one year of purchase may be subject to
a contingent deferred sales charge. The contingent deferred sales charge may be
reduced with respect to a particular shareholder where a financial institution
selling Investment C Shares elects not to receive a commission from the
distributor with respect to its sale of such Shares.
Redemption in Kind
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Trust is obligated to redeem Shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of a Fund's net
asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Trust will pay
all or a portion of the remainder of the redemption in portfolio instruments,
valued in the same way as the Fund
39
<PAGE>
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable.
Postponement of Redemptions
- ---------------------------
No Fund may suspend the right of redemption or postpone the date of payment
of redemption proceeds for more than seven days, except that (a) it may elect to
suspend the redemption of shares or postpone the date of payment of redemption
proceeds: (1) during any period that the NYSE is closed (other than customary
weekend and holiday closings) or trading on the NYSE is restricted; (2) during
any period in which an emergency exists as a result of which disposal of
portfolio securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Fund's net asset values; or (3) during such
other periods as the SEC may by order permit for the protection of investors;
and (b) the payment of redemption proceeds may be postponed as otherwise
provided in this Statement of Additional Information.
TAX STATUS
The Funds' Tax Status
The Funds will pay no federal income tax because they expect to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, each Fund must, among other
requirements: derive at least 90% of its gross income from dividends, interest,
and gains from the sale of securities; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
Shareholders' Tax Status
With respect to all Funds except the Ohio Tax Free Fund, the Municipal Bond
Fund and the Tax Exempt Money Market Fund, shareholders are subject to federal
income tax on dividends received as cash or additional Shares. No portion of any
income dividend paid by a Fund is eligible for the dividends received deduction
available to corporations. These dividends, and any short-term capital gains,
are taxable as ordinary income.
With respect to Ohio Tax Free Fund, Municipal Bond Fund and the Tax Exempt
Money Market Fund, no portion of any income dividend paid by a Fund is eligible
for the dividends received deduction available to corporations.
Capital Gains
With respect to all Funds except the Ohio Tax Free Fund, the Municipal Bond
Fund and the Tax Exempt Money Market Fund, long-term capital gains distributed
to shareholders will be treated as long-term capital gains regardless of how
long shareholders have held Shares.
With respect to Ohio Tax Free Fund and Municipal Bond Fund, capital gains
or losses may be realized by a Fund on the sale of portfolio securities and as a
result of discounts from par value on securities held to maturity. Sales would
generally be made because of: the availability of higher relative yields;
differentials in market values; new investment opportunities; changes in
creditworthiness of an issuer; or an attempt to preserve gains or limit losses.
Distributions of long-term capital gains are taxed as such, whether they
are taken in cash or reinvested, and regardless of the length of time the
shareholder has owned Shares. Any loss by a shareholder on Shares held for less
than six months and sold after a capital
40
<PAGE>
distribution will be treated as a long-term capital loss to the extent of the
capital gains distribution.
State and Local Taxes
The Government Money Market Fund intends to limit its investments to U.S.
government securities paying interest which, if owned directly by shareholders
of the Fund, would generally be exempt from state personal income tax. However,
from time to time, the Fund may also invest in other U.S. government securities
if the Advisor deems it advantages to do so. Moreover, under the laws of some
states, the net investment income generally distributed by the Fund may be
taxable to shareholders. State laws differ on this issue, and shareholders are
urged to consult their own tax advisors regarding the status of their accounts
under state and local tax laws.
Foreign Taxes
Investment income on certain foreign securities in which International
Equity Fund may invest may be subject to foreign withholding or other taxes that
could reduce the return on these securities. Tax treaties between the United
States and foreign countries, however, may reduce or eliminate the amount of
foreign taxes to which the Fund would subject.
TOTAL RETURN
Institutional Shares
Average Annual Total Return
Fiscal Year Ended July 31, 1999
<TABLE>
<CAPTION>
Since
Fund Name 1 Year 5 Years 10 Years Inception
- ---------------------------------------------------------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities Fund 3.16% 5.67% 5.83% 5.95%
Quality Bond Fund 1.48% 6.18% 6.47% 8.02%
Ohio Tax Free Bond Fund 1.86% 5.00% 5.42% 4.97%
Quality Growth Fund 26.80% 25.34% 17.13% 17.50%
Mid Cap Fund 7.61% 16.28% 13.38% 14.98%
Balanced Fund 14.57% 16.94% 13.75% 15.95%
International Equity Fund 4.52% n/a n/a 9.24%
Equity Income Fund 10.24% 20.16% 13.20% 15.13%
Bond Fund for Income 2.79% 6.09% 6.40% 8.20%
Municipal Bond Fund 1.68% 4.43% 5.17% 6.79%
Cardinal Fund 21.21% 21.37% 14.66% 16.01%
Pinnacle Fund 17.44% 26.21% 16.25% 16.81%
Government Money Market Fund 4.60% 5.01% n/a 4.39%
Prime Money Market Fund 4.76% 5.12% 5.07% 5.12%
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Tax Exempt Money Market Fund 2.73% 2.72% 3.03% 3.68%
U.S. Treasury Money Market Fund 4.68% 5.10% 5.05% 5.28%
</TABLE>
Investment A Shares
Average Annual Total Returns
Fiscal Year Ended July 31, 1999
<TABLE>
<CAPTION>
Since
Fund Name 1 Year 5 Years 10 Years Inception
- ---------------------------------------------------------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities Fund -1.71% 4.65% 5.32% 5.57%
Quality Bond Fund -3.30% 5.16% 5.96% 7.70%
Ohio Tax Free Bond Fund -2.92% 3.98% 4.92% 4.57%
Quality Growth Fund 20.82% 24.12% 16.56% 17.16%
Mid Cap Fund 2.48% 15.14% 12.83% 14.60%
Balanced Fund 9.13% 15.81% 13.20% 15.61%
International Equity Fund -0.45% n/a n/a 8.17%
Equity Income Fund 4.98% 18.99% 12.65% 14.79%
Bond Fund for Income -2.16% 5.05% 5.87% 7.89%
Municipal Bond Fund -3.04% 3.44% 4.68% 6.49%
Cardinal Fund 14.90% 20.06% 14.05% 15.75%
Pinnacle Fund 11.93% 25.00% 15.69% 16.42%
Government Money Market Fund 4.41% 4.98% n/a 4.33%
Prime Money Market Fund 4.53% 5.07% n/a 4.45%
Tax Exempt Money Market Fund 2.58% 2.73% 3.03% 3.68%
U.S. Treasury Money Market Fund n/a n/a n/a n/a
</TABLE>
Investment C Shares
Average Annual Total Return
Fiscal Year Ended July 31, 1999
<TABLE>
<CAPTION>
Since
Fund Name 1 Year 5 Years 10 Years Inception
- ---------------------------------------------------------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities Fund 2.31% 5.09% 5.39% 5.46%
Quality Bond Fund 0.81% 5.66% 6.06% 7.59%
Ohio Tax Free Bond Fund 1.13% 4.48% 4.99% 4.46%
Quality Growth Fund 25.76% 24.74% 16.70% 17.04%
Mid Cap Fund 6.79% 15.76% 12.96% 14.42%
Balanced Fund 13.78% 16.42% 13.33% 15.50%
International Equity Fund 3.87% n/a n/a 8.80%
Equity Income Fund 9.34% 19.14% 12.19% 14.07%
Bond Fund for Income 1.92% 5.16% 5.39% 7.16%
Cardinal Fund 19.29% 20.97% 14.47% 15.93%
Pinnacle Fund 16.60% 25.58% 15.96% 16.61%
</TABLE>
42
<PAGE>
YIELD
In addition to total returns, the Funds may advertise SEC yields for each
of the share classes. The 30-day SEC yield for the 30 days ended July 31, 1999
were as follows:
<TABLE>
<CAPTION>
Institutional Shares Investment A Shares Investment C Shares
-------------------- ------------------- -------------------
<S> <C> <C> <C>
U.S. Government Securities Fund 4.84% 4.59% 4.09%
Quality Bond Fund 5.34% 5.09% 4.59%
Ohio Tax Free Bond Fund .59% 3.34% 2.84%
Balanced Fund 1.52% 1.27% 1.06%
Bond Fund for Income 5.25% 5.00% 4.50%
Municipal Bond Fund 3.72% 3.47% n/a
</TABLE>
For each share class, the yield for a Fund is determined by dividing the
net investment income per share (as defined by the SEC) earned by the Fund over
a thirty-day period by the maximum offering price per share of the Fund on the
last day of the period. This value is then annualized using semi-annual
compounding. This means that the amount of income generated during the thirty-
day period is assumed to be generated each month over a 12-month period and is
reinvested every six months. The yield does not necessarily reflect income
actually earned by the Fund because of certain adjustments required by the SEC
and, therefore, may not correlate to the dividends or other distributions paid
to shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in a Fund,
the performance will be reduced for those shareholders paying those fees.
Tax-Equivalent Yield
The Ohio Tax Free Bond Fund and the Municipal Bond Fund may also advertise
tax-equivalent yield. The tax-equivalent yield for the Ohio Tax Free Bond Fund
for the 30-day period ended July 31, 1999, was 6.62%, while the tax-equivalent
yield for the Municipal Bond fund for the 30-day period ended July 31, 1999, was
6.55%. The tax-equivalent yield of a Fund is calculated similarly to the yield,
but is adjusted to reflect the taxable yield that the Fund would have had to
earn to equal its actual yield, assuming a 39.6% tax rate and assuming that
income is 100% tax-exempt.
43
<PAGE>
Tax Equivalency Table
The Ohio Tax Free Fund and Municipal Bond Fund may also use a tax-
equivalency table in advertising and sales literature. The interest earned by
the municipal obligations in the Ohio Tax Free Fund's portfolio generally
remains free from federal regular income tax and is free from income taxes
imposed by the State of Ohio. The interest earned by the Municipal Bond Fund's
portfolio is generally free from federal regular income tax. As the tables below
indicates, a "tax-free" investment in the Ohio Tax Free Fund is an attractive
choice for investors, particularly in times of narrow spreads between "tax-free"
and taxable yields.
<TABLE>
<CAPTION>
TAXABLE YIELD EQUIVALENT FOR 1999
STATE OF OHIO
<S> <C> <C> <C> <C> <C>
FEDERAL TAX BRACKET:
15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL AND STATE TAX BRACKET:
19.457% 33.201% 37.900% 43.500% 47.100%
SINGLE $ 1- $23,351- $56,551- $117,951- OVER
RETURN 23,350 56,550 117,950 256,500 256,500
Tax-Exempt Yield Taxable Yield Equivalent
1.50% 1.86% 2.25% 2.42% 2.65% 2.84%
2.00% 2.48% 2.99% 3.22% 3.54% 3.78%
2.50% 3.10% 3.74% 4.03% 4.42% 4.73%
3.00% 3.72% 4.49% 4.83% 5.31% 5.67%
3.50% 4.35% 5.24% 5.64% 6.19% 6.62%
4.00% 4.97% 5.99% 6.44% 7.08% 7.56%
4.50% 5.59% 6.74% 7.25% 7.96% 8.51%
5.00% 6.21% 7.49% 8.05% 8.85% 9.45%
5.50% 6.83% 8.23% 8.86% 9.73% 10.40%
6.00% 7.45% 8.98% 9.66% 10.62% 11.34%
</TABLE>
Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent. Furthermore, additional
state and local taxes paid on comparable taxable investments were not
used to increase federal deductions.
The chart above is for illustrative purposes only. It is not an indicator
of past or future performance of Ohio Tax Free Bond Fund Shares.
44
<PAGE>
* Some portion of Ohio Tax Free Fund's and Municipal Bond Fund's income
may be subject to the federal alternative minimum tax and state and
local income taxes.
PERFORMANCE COMPARISONS
Each Fund's performance depends upon such variables as: portfolio quality;
average portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates and market value of portfolio securities;
changes in each Fund's expenses; and various other factors.
Each Fund's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings and net
asset value per share are factors in the computation of yield and total return
as described above.
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Funds use in advertising may include:
. Dow Jones Industrial Average (the "DJIA") represents share prices of
selected blue-chip industrial corporations. The DJIA indicates daily changes in
the average price of stock of these corporations. Because it represents the top
corporations of America, the DJIA index is a leading economic indicator for the
stock market as a whole. (Quality Growth, Balanced, Mid Cap, and Equity Income
Funds)
. Europe, Australia, and Far East ("EAFE") is a market capitalization
weighted foreign securities index, which is widely used to measure the
performance of European, Australian, New Zealand, and Far Eastern stock markets.
The index covers approximately 1,020 companies drawn from 18 countries in the
above regions. The index values its securities daily in both U.S. dollars and
local currency and calculates total returns monthly. EAFE U.S. dollar total
return is a net dividend figure less Luxembourg withholding tax. EAFE is
monitored by Capital International, S.A., Geneva, Switzerland. (International
Equity Fund)
. Lehman Muni Bond Fund Index is a broad-based total return index comprised
of 8,000 Investment grade, fixed rate, tax-exempt, with a remaining maturity of
at least one year, including state and local general obligation, revenue,
insured and pre-refunded bonds and are selected from issues larger than $50
million dated since January 1984. Bonds are added to the index and weights are
updated monthly, with a one month lag.
. Lehman Brothers Aggregate Bond Index is a total return index measuring
both the capital price changes and income provided by the underlying universe of
securities, weighted by market value outstanding. The Aggregate Bond Index is
comprised of the Lehman
45
<PAGE>
Brothers Government Bond Index, Corporate Bond Index, Mortgage-Backed Securities
Index and the Yankee Bond Index. These indices include: U.S. Treasury
obligations, including bonds and notes; U.S. agency obligations, including those
of the Federal Farm Credit Bank, Federal Land Bank and the Bank for
Co-Operatives; foreign obligations, U.S. investment-grade corporate debt and
mortgage-backed obligations. All corporate debt included in the Aggregate Bond
Index has a minimum S&P rating of BBB, a minimum Moody's rating of Baa, or a
Fitch rating of BBB. (Balanced, Quality Bond and Bond Fund For Income)
. Lehman Brothers 5-Year Municipal Bond Index includes fixed-rate debt
obligations of state and local government entities. The securities have
maturities not less than four years but no more than six years, are investment
grade and are selected from issues larger than $50 million dated since 1984.
(Ohio Tax Free and Municipal Bond Funds)
. Lehman Brothers Government Index is an unmanaged index comprised of all
publicly issued, non-convertible domestic debt of the U.S. government, or any
agency thereof, or any quasi-federal corporation and of corporate debt
guaranteed by the U.S. government. Only notes and bonds with a minimum
outstanding principal of $1 million and a minimum maturity of one year are
included. (Government Securities, Balanced, Quality Bond, and Bond Fund For
Income)
. Lehman Brothers Government/Corporate (Total) Index is comprised of
approximately 5,000 issues which include non-convertible bonds publicly issued
by the U.S. government or its agencies; corporate bonds guaranteed by the U.S.
government and quasi-federal corporations; and publicly issued, fixed rate, non-
convertible domestic bonds of companies in industry, public utilities and
finance. The average maturity of these bonds approximates nine years. Tracked by
Shearson Lehman Brothers, Inc., the index calculates total returns for one
month, three month, twelve month and ten year periods and year-to-date.
(Government Securities, Balanced, Quality Bond, and Bond Fund For Income)
. Lehman Brothers Intermediate Government/Corporate Bond Index: An
unmanaged index comprised of all the bonds issued by the Lehman Brothers
Government/Corporate Bond Index with maturities between 1 and 9.99 years. Total
return is based on price appreciation/depreciation and income as a percentage of
the original investment. Indices are rebalanced monthly by market
capitalization. (Balanced, Quality Bond, Government Securities, and Bond Fund
For Income)
. Lehman Brothers 7-Year Municipal Bond Index includes fixed-rate debt
obligations of state and local government entities. The securities have
maturities between seven and eight years, are investment grade and are selected
from issues larger than $50 million dated since 1984. (Ohio Tax Free Bond and
Municipal Bond Funds)
. Lipper, Inc. ranks funds in various fund categories by making comparative
calculations using total return. Total return assumes the reinvestment of all
capital gains distributions and income dividends and takes into account any
change in net asset value over a
46
<PAGE>
specific period of time. From time to time, the Fund will quote its Lipper
ranking in the applicable funds category in advertising and sales literature.
(All of the Funds)
. Merrill Lynch Composite 1-5 Year Treasury Index is comprised of
approximately 66 issues of U.S. Treasury securities maturing between 1 and 4.99
years, with coupon rates of 4.25% or more. These total return figures are
calculated for one, three, six, and twelve month periods and year-to-date and
include the value of the bond plus income and any price appreciation or
depreciation. (Government Securities Fund)
. Merrill Lynch Corporate and Government Index includes issues which
must be in the form of publicly placed, nonconvertible, coupon-bearing domestic
debt and must carry a term of maturity of at least one year. Par amounts
outstanding must be no less than $10 million at the start and at the close of
the performance measurement period. Corporate instruments must be rated by S&P
or by Moody's as investment grade issues (i.e., in the BBB/Baa major rating
category or better). (Balanced, Quality Bond, and Bond Fund For Income)
. Merrill Lynch Domestic Master Index includes issues which must be in
the form of publicly placed, nonconvertible, coupon-bearing domestic debt and
must carry a term to maturity of at least one year. Par amounts outstanding must
be no less than $10 million at the start and at the close of the performance
measurement period. The Domestic Master Index is a broader index than the
Merrill Lynch Corporate and Government Index and includes, for example, mortgage
related securities. The mortgage market is divided by agency, type of mortgage
and coupon and the amount outstanding in each agency/type/coupon subdivision
must be no less than $200 million at the start and at the close of the
performance measurement period. Corporate instruments must be rated by S&P or by
Moody's as investment grade issues (i.e., in the BBB/Baa major rating category
or better). (Balanced, Quality Bond and Bond Fund For Income)
. Merrill Lynch 3-Year Treasury Yield Curve Index is an unmanaged index
comprised of the most recently issued 3-year U.S. Treasury notes. Index returns
are calculated as total returns for periods of one, three, six, and twelve
months as well as year-to-date. (Government Securities Fund)
. Merrill Lynch 3-5 Year Treasury Index is comprised of approximately 24
issues of intermediate-term U.S. government and U.S. Treasury securities with
maturities between 3 and 4.99 years and coupon rates above 4.25%. Index returns
are calculated as total returns for periods of one, three, six and twelve months
as well as year-to-date. (Government Securities Fund)
. Morningstar, Inc., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for two
weeks. (All Funds)
47
<PAGE>
. Salomon Brothers AAA-AA Corporate Index calculates total returns of
approximately 775 issues which include long-term, high-grade domestic corporate
taxable bonds, rated AAA-AA with maturities of twelve years or more and
companies in industry, public utilities, and finance. (Balanced, Quality Bond,
and Bond Fund For Income)
. Salomon Brothers 3-5 Year Government Index quotes total returns for
U.S. Treasury issues (excluding flower bonds) which have maturities of three to
five years. These total returns are year-to-date figures which are calculated
each month following January 1. (Government Securities Fund)
. S&P/BARRA Growth Index is a sub-index of the S&P 500 composite index
of common stocks. The index represents approximately fifty percent of the S&P
500 market capitalization and is comprised of those companies with higher price-
to-book ratios (one distinction associated with "growth stocks"). The index is
maintained by Standard and Poor's in conjunction with BARRA, an investment
technology firm. (Quality Growth, Balanced, Mid Cap, and Equity Income Funds)
. S&P Mid Cap 400 Index is comprised of the 400 common stocks issued by
medium-sized domestic companies whose market capitalizations range from $200
million to $5 billion. The stocks are selected on the basis of the issuer's
market size, liquidity and industry group representation. (Mid Cap Fund)
. Standard & Poor's Ratings Group Daily Stock Price Indices of 500 and
400 Common Stocks are composite indices of common stocks in industry,
transportation, and financial and public utility companies that can be used to
compare to the total returns of funds whose portfolios are invested primarily in
common stocks. In addition, the S&P indices assume reinvestment of all dividends
paid by stocks listed on its indices. Taxes due on any of these distributions
are not included, nor are brokerage or other fees calculated in the S&P figures.
(Quality Growth, Balanced, Mid Cap, Cardinal, Pinnacle and Equity Income Funds)
. Wilshire Mid Cap 750 Index is a subset of the Wilshire 5000 index of
common stocks. The Mid Cap 750 index consists of those Wilshire 5000 companies
ranked between 501 and 1,250 according to market capitalization. The index
ranges in market capitalization from $400 million to $1.7 billion. (Mid Cap
Fund)
Advertisements and other sales literature for the Funds may quote total
returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in the
Funds based on monthly/quarterly reinvestment of dividends over a specified
period of time.
Advertisements may quote performance information which does not reflect the
effect of the sales load.
48
<PAGE>
FINANCIAL STATEMENTS
The financial statements for the Funds for the fiscal year ended July 31,
1999 are incorporated herein by reference to the Annual Report to Shareholders
of the Fifth Third Equity and Income Mutual Funds dated July 31, 1999. (File
Nos. 33-24848 and 811-5669.) A copy of the Annual Report may be obtained without
charge by contacting the Trust at the address located on the back cover of the
prospectus.
APPENDIX
Standard and Poor's Ratings Group Corporate and Municipal Bond Rating
Definitions
AAA--Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA--Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A--Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
NR--NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy. S&P may apply a plus (+) or
minus (-) to the above rating classifications to show relative standing within
the classifications,
Moody's Investors Service, Inc. Corporate and Municipal Bond Rating Definitions
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there
49
<PAGE>
may be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium-grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
NR--Not rated by Moody's. Moody's applies numerical modifiers, 1, 2 and 3
in each generic rating classification from Aa through B in its bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
Fitch Investors Service, Inc. Long-Term Debt Rating Definitions
AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA--Bonds considered to be investment grade and of very high quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F- I +.
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
NR--NR indicates that Fitch does not rate the specific issue. Plus (+) or
Minus (-): Plus and minus signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus and minus signs,
however, are not used in the AAA category.
Standard and Poor's Ratings Group Municipal Note Rating Definitions
<PAGE>
SP-1--Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus sign (+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
SP-3--Speculative capacity to pay principal and interest.
Moody's Investors Service Short-Term Loan Rating Definitions
MIG1/VMIGI--This designation denotes best quality. There is a present
strong protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
Fitch Investors Service, Inc. Short-Term Debt Rating Definitions
F-1 +--Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-I+.
F-2--Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as the F- I + and F- 1 categories.
Standard and Poor's Ratings Group Commercial Paper Rating Definitions
A-1--This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to have extremely strong safety
characteristics are denoted with a plus (+) sign.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Moody's Investors Service, Inc. Commercial Paper Rating Definitions
Prime-1 --Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of senior short-term promissory obligations.
Prime-1 repayment capacity will often be evidenced by the following
characteristics:
<PAGE>
. Leading market positions in well-established industries.
. High rates of return on funds employed.
. Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
. Well-established access to a range of financial markets and assured
sources of alternate liquidity.
P-2--Issuers (or supporting institutions) rated Prime-2 (P-2) have a strong
capacity for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) Declaration of Trust of the Registrant including Amendments No. 1 through 7
(incorporated by reference to Registrant's Post-Effective Amendment No. 15
on Form N-1A filed February 28, 1995)
(i) Amendment No. 8 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 19 on Form
N-lA filed on or about October 28, 1996)
(ii) Amendment No. 9 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 18 on Form
N-1A filed on or about October 1, 1996)
(iii) Amendment No. 10 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 22 on Form
N-1A filed on or about September 30, 1997)
(iv) Amendment No. 11 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 26 on Form
N-1A filed on or about January 21, 1998)
(v) Amendment No. 12 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 28 on Form
N-1A filed on or about October 30, 1998)
(vi) Amendment No. 13 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 28 on Form
N-1A filed on or about October 30, 1998)
(vii) Amendment No. 14 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 29 on Form
N-1A filed on or about October 1, 1999)
(b) By-Laws of the Registrant (incorporated by reference to Registrant's Post-
Effective Amendment No. 15 on Form N-1A filed February 28, 1995)
(c) Not applicable
(d) (i) Investment Advisory Contract of the Registrant through and including
Exhibit J (incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed February 28, 1995)
(A) Exhibits K-M to Investment Advisory Contract of Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on or about September
30, 1997)
C-1
<PAGE>
(B) Exhibits N-0 to Investment Advisory Contract (incorporated
by reference to Registrant's Post-Effective Amendment No. 28
on Form N-1A filed on or about October 30, 1998)
(ii) Sub-Advisory Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 13 on Form N-1A filed June 1, 1994)
(iii) Investment Advisory Contract of the Fifth Third Pinnacle Fund
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998)
(e) (i) Distribution Agreement of the Registrant (incorporated by reference to
Registrant's Post-Effective Amendment No. 17 on Form N-1A filed on or
about January 18, 1996)
(A) Amended Schedules A-C to Distribution Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998)
(ii) Administrative Service Agreement of the Registrant (incorporated
by reference to Registrant's Post-Effective Amendment No. 19 on
Form N-1A filed on or about October 28, 1996)
(A) Amended Exhibit A to Administrative Service Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998)
(f) Not applicable
(g) (i) Custody Agreement of the Registrant (incorporated by reference to
Registrant's Post-Effective Amendment No. 25 on Form N-lA filed
on or about November 28, 1997)
(A) Amended Exhibit B to Custody Agreement (incorporated by
reference to Registrant's Post-Effective Amendment No. 22 on
Form N-1A filed on or about September 30, 1997)
(B) Amendment dated May 18, 1999 to the Custody Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed on or about October 1,
1999)
(ii) [Foreign] Custody Agreement dated May 25, 1999 between Fifth
Third Bank and The Bank of New York (incorporated by reference to
Registrant's Post-Effective Amendment No. 29 on Form N-1A filed
on or about October 1, 1999)
C-2
<PAGE>
(A) Foreign Custody Manager Agreement dated May 25, 1999 between
the Registrant and The Bank of New York (incorporated by
reference to Registrant's Post-Effective Amendment No. 29 on
Form N-1A filed on or about October 1, 1999)
(B) [Foreign Custody Manager] Letter Agreement dated May 25, 1999
between the Registrant and Fifth Third Bank (incorporated by
reference to Registrant's Post-Effective Amendment No. 29 on
Form N-1A filed on or about October 1, 1999)
(h) (i) Transfer Agency and Accounting Services Agreement of the
Registrant (incorporated by reference to Registrant's Post-
Effective Amendment No. 15 on Form N-1A filed February 28, 1995)
(A) Amended Schedule A to Transfer Agency and Accounting
Services Agreement
(ii) Management and Administration Agreement of the Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on or about September 30,
1997)
(A) Amended Schedule A to Management and Administration
Agreement (incorporated by reference to Registrant's Post-
Effective Amendment No. 28 on Form N-1A filed on or about
October 30, 1998)
(iii) Sub-Administration Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A filed
on or about September 30, 1997)
(A) Amended Schedule A to Sub-Administration Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998)
(i) Opinion and Consent of counsel as to legality of shares being
registered (incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30, 1998)
(j) (i) Consent of Ernst & Young LLP (included herewith)
(k) Not applicable
C-3
<PAGE>
(l) Initial Capital Understanding (incorporated by reference to
Registrant's Post-Effective Amendment No. 15 on Form N-1A filed
February 28, 1995)
(m) (i) Amended Rule l2b-1 Plan through and including Exhibits A and B
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998)
(ii) Form of Rule 12b-1 Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 28 on Form
N-1A filed on or about October 30, 1998)
(n) Financial Data Schedules (incorporated by reference to Registrant's
Form N-SAR filed on or about September 29, 1999)
(o) Amended and Restated Multiple Class Plan (incorporated by reference to
Registrant's Post-Effective Amendment No. 28 on Form N-1A filed on or
about October 30, 1998)
Item 24. Persons Controlled by or Under Common Control with Registrant
None
Item 25. Indemnification
Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed September 27, 1991 (File Nos. 811-5669 and
33-24848).
Item 26. Business and Other Connections of Investment Adviser
<TABLE>
<CAPTION>
FIFTH THIRD BANK
Other Substantial
Position with Business, Profession,
Name Fifth Third Bank Vocation or Employment
- ---- ---------------- -----------------------
<S> <C> <C>
George A. Schaefer, Jr. President, Chief Executive Officer
and Director None
Stephen J. Schrantz Executive Vice President None
P. Michael Brumm Executive Vice President None
Michael K. Keating Executive Vice President,
Trust Officer and Secretary None
Robert P. Niehaus Executive Vice President None
Michael D. Baker Executive Vice President None
James J. Hudepohl Executive Vice President None
Gerald L. Wissel Executive Vice President and
Director of Audit None
Henry W. Hobson, III Senior Vice President None
J. Patrick Bell Senior Vice President None
</TABLE>
C-4
<PAGE>
<TABLE>
<S> <C> <C>
Tom A. Bobenread Senior Vice President None
Edward H. Silva, Jr. Senior Vice President None
Neal E. Arnold Senior Vice President and
Chief Financial Officer None
Paul L. Reynolds Senior Vice President, General
Counsel and Assistant Secretary None
James D. Berghausen Senior Vice President & Chief None
Investment Officer
Barry L. Boerstler Senior Vice President None
Richard A. Bondie Senior Vice President None
Roger W. Dean Senior Vice President & Bancorp
Controller None
Diane L. Dewbrey Senior Vice President & Cashier None
Sandra L. Lobert Senior Vice President & Trust
Officer None
William J. Moran Senior Vice President None
Ronald A. Stahl Senior Vice President & Trust
Officer None
Darryl F. Allen Director Chairman, President and CEO,
Aeroquip Vickers, Inc.
John F. Barrett Director President and CEO, The Western-
Southern Life Insurance Company
Gerald V. Dirvin Director Former Executive Vice President, The
Proctor & Gamble Company
Thomas B. Donnell Director Chairman, Fifth Third Bank of
Northwestern Ohio
Richard T. Farmer Director Chairman, Cintas Corp.
Ivan W. Gorr Director Former Chairman and CEO, Cooper
Tire & Rubber Co.
Joseph H. Head, Jr. Director Chairman & CEO, Atkins and Pearce
Joan R. Herschede Director Former President and CEO, The Frank
Herschede Company
Allen M. Hill Director President and CEO, Dayton Power &
Light, Inc.
William G. Kagler Director Former Chairman of the Executive
Committee of the Board of Directors,
Skyline Chili, Inc.
James D. Kiggen Director Chairman, Xtek, Inc.
Jerry L. Kirby Director Chairman, Fifth Third Bank of
Western Ohio
Mitchel D. Livingston, Ph.D. Director Vice President for Student Affairs &
Human Resources, University of
Cincinnati
Robert B. Morgan Director President and CEO, Cincinnati
Financial Corp.
David E. Reese Director Chairman, Fifth Third Bank of the
Southwest
James E. Rogers Director Vice Chairman, President & CEO,
CINergy
Brian H. Rowe Director Chairman Emeritus, GE Aircraft
Engines
John J. Schiff, Jr. Director Chairman, Cincinnati Financial Corp.
</TABLE>
C-5
<PAGE>
<TABLE>
<S> <C> <C>
Donald B. Shackelford Director Chairman, Fifth Third Bank of
Columbus
Dennis J. Sullivan, Jr. Director Executive Counselor, Dan Pinger
Public Relations
Dudley S. Taft Director President, Taft Broadcasting Co.
</TABLE>
MORGAN STANLEY ASSET MANAGEMENT INC. (Sub-adviser to the Fifth Third
International Equity Fund):
Listed below are the officers and Directors of Morgan Stanley Asset
Management Inc. ("MSAM"). The information as to any other business, profession,
vocation, or employment of substantial nature engaged in by the Chairman,
President and Directors during the past two fiscal years, is incorporated by
reference to Schedule A and D of Form ADV filed by MSAM pursuant to the Advisers
Act (SEC File No. 801-15757).
C-6
<PAGE>
MORGAN STANLEY ASSET MANAGEMENT
Officers (Principals and Managing Directors)
<TABLE>
<S> <C>
John R. Alkire, Managing Director Terence P. Carmichael, Principal
James A. Allwin, Managing Director Arthur Certosimo, Principal
Arden C. Armstrong, Managing Director Marc Crespi, Principal
Thomas L. Bennett, Managing Director Jan Daikuhara, Principal
Barton M. Big-, Managing Director Jacqueline A. Day, Principal
Francine J. Bovich, Managing Director Dana L. Dortone, Principal
Frances Campion, Managing Director Raye L. Dube, Principal
Stephen C. Cordy, Managing Director Hassan Elmasry, Principal
Madhav Dhar, Managing Director Abigail Jones Feder, Principal
Kenneth B. Dunn, Managing Director Frits Nicolas Simon Fiena, Principal
Stephen F. Esser, Managing Director Eugene Flood, Jr., Principal
Philip W. Friedman, Managing Director Robert J. Formisano, Principal
J. David Germany, Managing Director Thomas C. Frame, Principal
Nicholas J. Kovich, Managing Director W. Blain Gern, Principal
Maryann K. Maiwald, Managing Director William B. Gerlach, Principal
Robert J. Marcin, Managing Director Stephen T. Golding, Principal
Robert L. Meyer, Managing Director Robert L. Haoin, Principal
Frank P.L. Minard, Managing Director Perry E. Hall 11, Principal
Mar-, aret B. Nayulor, Managing Director Ellen D. Harvey, Principal
Russell C. Platt, Managing Director John D. Hevner, Principal
Scott F. Richard, Managing Director Kimberly L. Hirschman, Principal
Robert A. Sargent, Managing Director Ruth A. Hughes-Guden, Principal
Gary G. Schlarbaum, Managing Director Tracey H. Ivey, Principal
Vinod R. Sethi, Managing, Director Timothy D. Jansen, Principal
Dennis G. Sherva, Managing Director Margaret Kinsley Johnson, Principal
James L. Tanner, Managing Director James Jolinger, Principal
Horacio A. Valeiras, Managing Director Michael F. Klein, Principal
James R. Tanner, Managing Director Paul W. Klug, Jr., Principal
Mama C. Whittington, Managing Director George Kosby, Principal
Richard G. Woolworth, Jr., Managing Director Steven K. Kreider, Principal
Richard B. Worley, Managing Director Michael B. Kushma, Principal
Warren J. Ackerman, 111, Principal Khoon-Min Lim, Principal
Susan S. Akers, Principal Marianne J. Lippmann, Principal
Robert E. Angevine, Principal William David Lock, Principal
W. David Armstrong, Principal Jeremy Lodewick, Principal
Eileen M. Barron, Principal Gordon W. Loery, Principal
Gerald P. Barth-Wehrenalp, Principal Yvonne Lonorley, Principal
Glenn E. Becker, Principal Andrew John Mack, Principal
Richard M. Behler, Principal Gary J. Mangino, Principal
Stephen H. Belgrad, Principal An-elo G. Maniowoekis, Principal
William Bentley, Principal James J. Manley, Principal
Theodore R. Bigman, Principal Jeffrey Margolis, Principal
E. Clayton Boggs, Principal Ian Martin, Principal
Stuart H. Bohart, Principal M. Paul Martin, Principal
Richard F. Brereton, Principal Teresa E. Martini, Principal
Andrew C. Brown, Principal Walter Maynard, Jr., Principal
Jeffry P. Brown, Principal Phoebe Mcbee, Principal
Angelica T. Cantlon, Principal Alexis C. McCarthy, Principal
</TABLE>
C-7
<PAGE>
Mary Ann Milias St. Peter, Principal
Milesh Modi, Principal
Paul F. O'Brien, Principal
Yoshiro Okawa, Principal
Wayne D. Peterson, Principal
Christopher G. Petrow, Principal
Andreas Ludwig J. Povell, Principal
Akash Prakash, Principal
Narayan Rachmachandran, Principal
Gail H. Reeke, Principal
Ronald R. Reese, Principal
Christine 1. Reilly, Principal
Christian G. Roth, Principal
Stepano Russo, Principal
James D. Schmid, Principal
James H. Scott, Principal
Kiat Seng Seah, Principal
Roberto M. Sella, Principal
Stephen C. Sexauer, Principal
Andy B. Skov, Principal
Kim 1. Spellman, Principal
Joseph P. Stadler, Principal
Kunihiko Sugio, Principal
Ram K. Sunclaram, Principal
Ann D. Thivierge, Principal
Lorraine Truten, Principal
Elizabeth A. Vale, Principal
Roberto Vedovetto, Principal
Marjorie M. Wilcox, Principal
Ram Willner, Principal
Philip W. Winters, Principal
Bruce Wolfe, Principal
Peter John Wri-ght, Principal
Alford E. Zick, Principal
HEARTLAND CAPITAL MANAGEMENT, INC.
Other Substantial
Position with Business, Profession,
Name Heartland Vocation or Employment
- ---- --------- ----------------------
Robert D. Markley President and Chief Executive
Officer None
Thomas F. Maurath Executive Vice President None
Item 27. Principal Underwriters
(a) BISYS Fund Services Limited Partnership, formerly known as The Winsbury
Company Limited Partnership ("BISYS"), acts as distributor and
administrator for Registrant. BISYS also distributes the securities of
Alpine Equity Trust, American Performance Funds, AmSouth
C-8
<PAGE>
Mutual Funds, The BB&T Mutual Funds Group, The Coventry Group, ESC
Strategic Funds, Inc., The Eureka Funds, Govenor Funds, Fifth Third Funds,
Hirtle Callaghan Trust, HSBC Funds Trust and HSBC Mutual Funds Trust,
INTRUST Funds Trust, The Infinity Mutual Funds, Inc., Magna Funds,
Mercantile Mutual Funds, Inc., Meyers Investment Trust, MMA Praxis Mutual
Funds, M.S.D.&T. Funds, Pacific Capital Funds, The Republic Advisors Funds
Trust, The Republic Funds Trust, Sefton Funds Trust, SSgA International
Liquidity Fund, Summit Investment Trust, Variable Insurance Funds, The
Victory Portfolios, The Victory Variable Insurance Funds and Vintage Funds,
Inc., each of which is an investment management company.
(b) Directors, officers and partners of BISYS, as of September 1, 1999 were as
follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with
Business Address Positions and Offices with BISYS Registrant
- ------------------ -------------------------------- ----------
<S> <C> <C>
The BISYS Group, Inc. Sole shareholder of BISYS Fund None
150 Clove Road Services, Inc.
Little Falls, NJ 07424
BISYS Fund Services, Inc. Sole General Partner None
3435 Stelzer Road
Columbus, Ohio 43219
G. Ronald Henderson Executive Officer None
3435 Stelzer Road
Columbus, Ohio 43219
J. David Huber Senior Vice President None
3435 Stelzer Road Business Development
Columbus, Ohio 43219 Fund Services Division
Stephen G. Mintos Executive Vice President President
3435 Stelzer Road General Manager
Columbus, Ohio 433219 Fund Services Division
Kenneth B. Quintenz Executive Officer None
3435 Stelzer Road
Columbus, Ohio 43219
</TABLE>
(c) Not applicable.
C-9
<PAGE>
Item 28. Location of Accounts and Records
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 3la-1 through 3la-3 promulgated
thereunder are maintained at one of the following locations:
Fifth Third Funds (Registrant)
3435 Stelzer Road
Columbus, Ohio 43219-3035
Fifth Third Bank (Advisor, Custodian, Sub-administrator, transfer agent and
dividend disbursing agent)
38 Fountain Square Plaza
Cincinnati, Ohio 45263
BISYS (Administrator)
3435 Stelzer Road
Columbus, Ohio 43219-3035
Heartland Capital Management, Inc. (Advisor to the Fifth Third Pinnacle
Fund)
36 South Pennsylvania Street, Suite 610
Indianapolis, Indiana 46204
Morgan Stanley Asset Management Inc. (Sub-Advisor to the Fifth Third
International Equity Fund)
1221 Avenue of the Americas
New York, New York 10020
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Registrant undertakes to furnish to each person to whom a prospectus is
delivered a copy of Registrant's latest Annual Report to Shareholders, upon
request and without charge.
Registrant undertakes to call a meeting of shareholders for the purpose of
voting upon the questions of removal of a trustee or trustees if requested to do
so by the holders of at least 10% of Registrant's outstanding shares. Registrant
will stand ready to assist shareholder communications in connection with any
meeting of shareholders as prescribed in Section 16(c) of the Investment Company
Act of 1940.
C-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
requirements for effectiveness of this Registration Statement under Rule 485(b)
under the Securities Act of 1933, as amended, and has duly caused this Post-
Effective Amendment to its Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Columbus, State of
Ohio, on the 30th day of November 1999.
FIFTH THIRD FUNDS
BY:
----------------------------------
Stephen G. Mintos, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment has been signed below by the following persons in the
capacities indicated on November 30, 1999.
<TABLE>
<S> <C>
President and Trustee (Principal Executive Officer)
- ---------------------------------
Stephen G. Mintos
Treasurer (Principal Financial and
- ---------------------------------- Accounting Officer)
Gary R. Tenkman
** Trustee
- ----------------------------------
Edward Burke Carey
** Trustee
- ----------------------------------
Lee A. Carter
** Chairman and Trustee
- ---------------------------------
Albert E. Harris
</TABLE>
**Executed on behalf of the indicated person by the undersigned, pursuant to
power of attorney previously filed and incorporated herein by reference.
By:
--------------------------------------------
Stephen G. Mintos, Attorney-in-fact
C-11
<PAGE>
EXHIBIT INDEX
Exhibit j (i) Consent of Ernst & Young.
<PAGE>
EXHIBIT J (i)
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" and "Independent Auditors" in the prospectuses included in
Post-Efective Amendment No. 31 to the Registration Statement (Form N-1A No. 811-
5669) of Fifth Third Funds and to the use of our report dated September 22, 1999
incorporated by references therein.
ERNST & YOUNG LLP
Cincinnati, Ohio
November 29, 1999
