<PAGE>
As filed with the Securities and Exchange Commission on September 29, 2000
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 [X]
Post-Effective Amendment No. 35 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Amendment No. 36 [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)
(888) 799-5353
(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:
Martin E. Lybecker
Ropes & Gray
One Franklin Square
1301 K Street, Suite 800 East
Washington, DC 20005
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box):
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[_] Immediately upon filing pursuant to [_] On (date) pursuant to
paragraph (b) paragraph (a)
[_] 60 days after filing pursuant to [X] On November 30, 2000 pursuant
paragraph (a)(1) paragraph (a)(1)
[_] 75 days after filing pursuant to [_] On (date) pursuant to paragraph (a)(2)
paragraph (a)(2) of Rule 485
</TABLE>
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously-filed post-effective amendment.
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Fifth Third Funds Table of Contents
Objectives, Strategies and Risks
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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
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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.
2
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Fifth Third Government Money Market Fund LOGO
Fundamental Objective
High current income consistent with stability of principal
and liquidity.
Principal Investment
Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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 or
unrated securities that are considered equivalent by the
Fund's investment manager. 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.
The Fund may also invest in repurchase agreements
collateralized by the securities mentioned above.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
The Fund's principal risks include interest rate risk, net
asset value risk, and credit risk. Interest rate risk
involves the possibility that the Fund's yield will
decrease due to a decrease in interest rates or that the
value of the Fund's investments will decline due to an
increase in interest rates. Net asset value risk involves
the possibility that the Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves
the risk that an issuer cannot make timely interest and
principal payments on its debt securities.
3
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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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[_] [ [_]%
]
Worst quarter: Q[_] [ [_]%
]
Year to Date Return (1/1/00 to 9/30/00): [_]%
Average Annual Total Returns (for the periods ended December 31, 1999)
Inception Past Year Past 5 Years Past 10 Years Since
Date Inception
Investment A Shares 11/25/91 [_]% [_]% [_]% [_]%
To obtain current yield information, call 1-888-799-5353.
4
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Fifth Third Prime Money Market Fund LOGO
Fundamental Objective
Current income consistent with stability of principal.
Principal Investment
Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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 or
unrated securities that are considered equivalent by the
Fund's investment manager. 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.
The Fund may also invest in repurchase agreements
collateralized by the securities mentioned above.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
The Fund's principal risks include interest rate risk, net
asset value risk, and credit risk. Interest rate risk
involves the possibility that the Fund's yield will
decrease due to a decrease in interest rates or that the
value of the Fund's investments will decline due to an
increase in interest rates. Net asset value risk involves
the possibility that the Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves
the risk that an issuer cannot make timely interest and
principal payments on its debt securities.
5
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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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[_] [ [_]%
]
Worst quarter: Q[_] [ [_]%
]
Year to Date Return (1/1/00 to 9/30/00): [_]%
Average Annual Total Returns (for the periods ended December 31, 1999)
Inception Past Year Past 5 Years Past 10 Years Since
Date Inception
Investment A Shares 8/11/92 [_]% [_]% [_]% [_]%
Investment B Shares/1/ [_]% [_]% [_]% [_]%
/1/ Because Investment B shares commenced operations on and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
To obtain current yield information, call 1-888-799-5353.
6
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Fifth Third Tax Exempt Money Market Fund LOGO
Fundamental Objective
Maximize current income, exempt from federal income tax,
while preserving capital and maintaining liquidity.
Principal Investment
Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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 or
unrated securities that are considered equivalent by the
Fund's investment manager. 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.
The Fund may also invest in repurchase agreements
collateralized by U.S. Treasury securities.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
7
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The Fund's principal risks include interest rate risk, net
asset value risk, credit risk, and tax risk. Interest
rate risk involves the possibility that the Fund's yield
will decrease due to a decrease in interest rates or that
the value of the Fund's investments will decline due to an
increase in interest rates. Net asset value risk involves
the possibility that the Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves
the risk that an issuer cannot make timely interest and
principal payments on its debt securities. Tax risk
involves the possibility that the issuer of securities
will fail to comply with certain requirements of the
Internal Revenue Code, which would create adverse tax
consequences.
8
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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
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[_] [ [_]%
]
Worst quarter: Q[_] [ [_]%
]
Year to Date Return (1/1/00 to 9/30/00): [_]%
Average Annual Total Returns (for the periods ended December 31, 1999)
Inception Past Year Past 5 Years Past 10 Years Since
Date Inception
Investment A Shares/1/ 9/7/83 [_]% [_]% [_]% [_]%
To obtain current yield information, call 1-888-799-5353.
/1/ For the period prior to September 21, 1998, the quoted performance of the
Fund reflects the performance of the Investor Shares of the 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
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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 or Investment B 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, 2000.
Shareholder Fees
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Money Market Funds--Fee Table
------------------------------------------------
Fifth Third Fifth Third Fifth Third
Government Prime Money Tax Exempt
Money Market Market Money Market
Fund Fund Fund
A A B A
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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/1/ None None 5.00% None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees 0.40% 0.40% 0.40% 0.50%
Distribution/Service (12b-1) fees/2/ 0.25% 0.25% 1.00% 0.25%
Other expenses [_]% [_]% [_]% [_]%
Total Annual Fund Operating Expenses [_]% [_]% [_]% [_]%
Fee Waivers/3/ [_]% [_]% [_]% [_]%
Net Total Annual Fund Operating Expenses [_]% [_]% [_]% [_]%
</TABLE>
/1/ 5% the first year after purchase, declining to 4% in the second year, 3% in
the third and fourth years, 2% in the fifth year, 1% in the sixth year and
eliminated thereafter. Approximately eight years after purchase, Investment B
shares automatically convert to Investment A shares.
/2/ Certain service organizations may receive fees from the Fund in amounts up
to/ an annual rate of 0.25% of the daily net asset value of the fund shares
owned by shareholders with whom the service organization has a servicing
relationship.
/3/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001. [CONFIRM]
---------
10
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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
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Fifth Third Government 1 3 5 10
Money Market Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Fifth Third Prime 1 3 5 10
Money Market Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Fifth Third Tax Exempt 1 3 5 10
Money Market Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
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11
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Additional Information About the Funds' Investments
Investment Practices
--------------------
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. The following
table describes the securities and techniques the Funds use, as well as the main
risks they pose. Equity securities are subject mainly to market risk. Fixed
income securities are primarily influenced by market, credit and prepayment
risks, although certain securities may be subject to additional risks.
Following the table is a more complete discussion of risk. You may also consult
the Statement of Additional Information for additional details regarding these
and other permissible investments.
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FUND NAME FUND CODE
----------------------------------- ---------
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Government Money Market Fund 1
Prime Money Market Fund 2
Tax Exempt Money Market Fund 3
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INSTRUMENT FUND CODE RISK TYPE
--------------------------------------------------- ---------------------------------- ----------------------------------
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Bankers' Acceptances: Bills of exchange or time 2, 3 Credit
drafts drawn on and accepted by a commercial Liquidity
bank. Maturities are generally six months or Market
less. Interest Rate
Bonds: Interest-bearing or discounted securities Market
that obligate the issuer to pay the bondholder a Credit
specified sum of money, usually at specific Interest Rate
intervals, and to repay the principal amount of
the loan at maturity.
Corporate: 2
Government: 1, 2
Certificates of Deposit: Negotiable instruments 2, 3 Market
with a stated maturity. Credit
Liquidity
Interest Rate
Commercial Paper: Secured and unsecured short-term 2, 3 Credit
promissory notes issued by corporations and other Liquidity
entities. Maturities generally vary from a few Market
days to nine months. Interest Rate
Derivatives: Instruments whose value is derived 1-3 Management
from an underlying contract, index or security, Market
or any combination thereof, including futures, Credit
options (e.g., put and calls), options on Liquidity
options, swap agreements, and some Leverage
mortgage-backed securities. Interest Rate
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12
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Futures and Related Options: A contract providing 1 Management
for the future sale and purchase of a specified Market
amount of a specified security, class of Credit
securities, or an index at a specified time in Liquidity
the future and at a specified price. Leverage
Illiquid Securities: Securities which may be 1-3 Liquidity
difficult to sell at an acceptable price. Market
Investment Company Securities: Shares of 1-3 Market
investment companies. These investment
companies may include money market funds of Fifth
Third Funds and shares of other registered
investment companies for which the Adviser to a
Fund or any of their affiliates serves as
investment adviser, administrator or distributor.
Investment Grade Bonds: Interest-bearing or 2, 3 Market
discounted government or corporate securities Credit
that obligate the issuer to pay the bondholder a
specified sum of money, usually at specific
intervals, and to repay the principal amount of
the loan at maturity. Investment grade bonds are
those rated BBB or better by S&P or Baa or better
by Moody's or similarly rated by other nationally
recognized statistical rating organizations, or,
if not rated, determined to be of comparable
quality by the Adviser.
Money Market Instruments: Investment-grade, U.S. 1-3 Market
dollar denominated debt securities that have Credit
remaining maturities of one year or less. These
securities may include U.S. government
obligations, commercial paper and other
short-term corporate obligations, repurchase
agreements collateralized with U.S. government
securities, certificates of deposit, bankers'
acceptances, and other financial institution
obligations. These securities may carry fixed or
variable interest rates.
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13
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Municipal Securities: Securities issued by a state 2, 3 Market
or political subdivision to obtain funds for Credit
various public purposes. Municipal securities Political
include (a) governmental lease certificates of Tax
participation issued by state or municipal Regulatory
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; (b) municipal notes and
tax-exempt commercial paper; (c) serial bonds;
(e) tax anticipation notes sold to finance
working capital needs of municipalities in
anticipation of receiving taxes at a later date;
(f) bond anticipation notes sold in anticipation
of the issuance of long-term bonds in the future;
(g) pre-refunded municipal bonds whose timely
payment of interest and principal is ensured by
an escrow of U.S. government obligations; and (h)
general obligation bonds.
Participation Interests: Interests in bank loans 3 Interest rate
made to corporations. Credit
Liquidity
Preferred Stocks: Preferred Stocks are equity Market
securities that generally pay dividends at a
specified rate and have preference over common
stock in the payment of dividends and
liquidation. Preferred stock generally does not
carry voting rights.
Repurchase Agreements: The purchase of a security 1-3 Market
and the simultaneous commitment to return the Leverage
security to the seller at an agreed upon price on
an agreed upon date. This is treated as a loan.
Restricted Securities: Securities not registered 1-3 Liquidity
under the Securities Act of 1933, such as Market
privately placed commercial paper and Rule 144A
securities.
Reverse Repurchase Agreement: The sale of a 1-3 Market
security and the simultaneous commitment to buy Leverage
the security back at an agreed upon price on an
agreed upon date. This is treated as a borrowing
by a Fund.
</TABLE>
14
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Securities Lending: The lending of up to 33 1/3% 1-3 Market
of the Fund's total assets. In return the Fund Leverage
will receive cash, other securities, and/or Liquidity
letters of credit. Credit
Time Deposits: Non-negotiable receipts issued by a 2, 3 Liquidity
bank in exchange for the deposit of funds. Credit
Market
U.S. Government Agency Securities: Securities 1-3 Interest Rate
issued by agencies and instrumentalities of the Credit
U.S. government. These include Ginnie Mae, Fannie
Mae, and Freddie Mac.
U.S. Treasury Obligations: Bills, notes, bonds, 1-3 Interest Rate
separately traded registered interest and
principal securities, and coupons under bank
entry safekeeping.
Variable and Floating Rate Instruments: 2, 3 Credit
Obligations with interest rates which are reset Liquidity
daily, weekly, quarterly or some other period and Market
which may be payable to the Fund on demand.
When-Issued and Delayed Delivery Transactions: 1-3 Market
Purchase or contract to purchase securities at a Leverage
fixed price for delivery at a future date. Under Liquidity
normal market conditions, when-issued purchases Credit
and forward commitments will not exceed 20% of
the value of a Fund's total assets.
Yankee Bonds and Similar Debt Obligations: U.S. 1-3 Market
dollar denominated bonds issued by foreign Credit
corporations or governments. Sovereign bonds are Interest Rate
those issued by the government of a foreign
country. Supranational bonds are those issued by
supranational entities, such as the World Bank
and European Investment Bank. Canadian bonds are
those issued by Canadian provinces.
Zero-Coupon Debt Obligations: Bonds and other debt 1-3 Credit
that pay no interest, but are issued at a Market
discount from their value at maturity. When held Interest Rate
to maturity, their entire return equals the
difference between their issue price and their
maturity value.
</TABLE>
15
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Investment Risks
----------------
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "Risk/Return Summary and Fund Expenses." Because of these risks,
the value of the securities held by the Funds may fluctuate, as will the value
of your investment in the Funds. Certain investments and Funds are more
susceptible to these risks than others.
Credit Risk. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade
securities. The price of a security can be adversely affected prior to actual
default as its credit status deteriorates and the probability of default rises.
Interest Rate Risk. The risk that debt prices overall will decline over short
or even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of the Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon or pay-in-kind securities are generally affected to a greater extent
by interest rate changes. These securities tend to be more volatile than
securities which pay interest periodically.
Leverage Risk. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Portfolio also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Portfolio's
hedging transactions will be effective.
Speculative. To the extent that a derivative is not used as a hedge, the
Portfolio is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivatives original cost.
Liquidity Risk. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market.
The seller may have to lower the price, sell other securities instead or forego
an investment opportunity, any of which could have a negative effect on
Portfolio management or performance. This includes the risk of missing out on
an investment opportunity because the assets necessary to take advantage of it
are tied up in less advantageous investments.
Management Risk. The risk that a strategy used by a Fund's portfolio manager
may fail to produce the intended result. This includes the risk that changes in
the value of a hedging instrument will not match those of the asset being
hedged. Incomplete matching can result in unanticipated risks.
Market Risk. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector
of the economy or the market as a whole. There is also the risk that the
current interest rate may not accurately reflect existing market rates. For
fixed income securities, market risk is largely, but not exclusively, influenced
by changes in interest rates. A rise in interest rates typically causes a fall
in values, while a fall in rates typically causes a rise in values. Finally,
key information about a security or market may be inaccurate or unavailable.
This is particularly relevant to investments in foreign securities.
16
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Political Risk. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war.
Pre-Payment/Call Risk. The risk that the principal repayment of a security will
occur at an unexpected time. Prepayment risk is the chance that the repayment
of a mortgage will occur sooner than expected. Call risk is the possibility
that, during times of declining interest rates, a bond issuer will "call" - or
repay - higher yielding bonds before their stated maturity. Changes in pre-
payment rates can result in greater price and yield volatility. Pre-payments
and calls generally accelerate when interest rates decline. When mortgage and
other obligations are pre-paid or called, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income - and the potential for taxable capital gains. Further, with
early prepayment, a Fund may fail to recover any premium paid, resulting in an
unexpected capital loss. Prepayment/call risk is generally low for securities
with a short-term maturity, moderate for securities with an intermediate-term
maturity, and high for securities with a long-term maturity.
Regulatory Risk. The risk associated with Federal and state laws which may
restrict the remedies that a lender has when a borrower defaults on loans.
These laws include restrictions on foreclosures, redemption rights after
foreclosure, Federal and state bankruptcy and debtor relief laws, restrictions
on "due on sale" clauses, and state usury laws.
Tax Risk. The risk that the issuer of the securities will fail to comply with
certain requirements of the Internal Revenue Code, which would cause adverse tax
consequences.
17
<PAGE>
Money Market Investment A Shares and Investment B Shares
Investment Advisor
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, serves as
investment advisor to all Funds.
As of September 30, 2000, Fifth Third Bank had approximately $____ billion of
assets under management, including approximately $____ billion of assets of
Fifth Third Funds.
The management fees paid by the Funds for the fiscal year ended July 31, 2000
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 Fund Services Limited Partnership ("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 0.035% of the average aggregate daily net assets of the
Funds.
18
<PAGE>
Shareholder Information
Purchasing and Selling Fund Shares
Pricing Fund Shares
The Fund's Net Asset Value (NAV) is calculated by dividing the Fund's net assets
by the number of its shares outstanding. The Fund attempts to maintain a NAV of
$1 per share. 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 or Investment B 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 or
Investment B 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 or
Investment B Shares of the Funds offered by this
Prospectus is $1,000. Subsequent investments must be in
amounts of at least $50. The maximum investment is
[$250,000] for total purchases of Investment B shares of
the Fund offered by this Prospectus.
19
<PAGE>
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 1st or 15th
of each month, or both. If the 1st or 15th 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.
20
<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:
Fifth Third Funds
P.O. Box 182706
Columbus, OH 43218-2706
By Express Mail:
Fifth Third Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
21
<PAGE>
By Wire Transfer
For Subsequent Investments:
Instruct your bank to wire transfer your investment to:
Money Market
Cincinnati, OH
A/C #99944318
ABA #042000314
Reference: Fifth Third Funds
FFC: Shareholder name, Fund name, and Account number
Note: Your bank may charge a wire transfer fee.
Systematic Investment Program
To begin making systematic investments or to increase the
amounts you already are investing:
. 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 182706
Columbus, OH 43218-2706
22
<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 or Investment B 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 first 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
during any period when (a) trading on the NYSE is restricted by applicable rules
and regulations of the SEC, (b) the NYSE is closed for other then customary
weekend and holiday closings, (c) the SEC has by order permitted such
suspension, or (d) an emergency exists as determined by the SEC. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send your request by regular mail to: Fifth
Third Funds, P.O. Box 182706, Columbus, Ohio 43218-2706, or by express mail to:
Fifth Third Funds, c/o BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio
43219-3035.
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
Shares may be redeemed in any amount less than $50,000 by telephone.
23
<PAGE>
Call 1-800-282-5706 with instructions as to how you wish
to receive your funds (mail, wire). The Funds make every
effort to insure that 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 182706
Columbus, OH 43218-2706
By overnight service
1. Write a letter of instruction indicating:
. 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
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
By wire transfer
(Option available only if previously set up on account.)
Call 1-800-282-5706 to request a wire transfer.
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 Withdrawal Plan
To activate this feature call 1-800-282-5706.
24
<PAGE>
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.
Exchanging Your Shares
You may exchange your Fund shares for the same class 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.
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.)
25
<PAGE>
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.
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.
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, Fifth Third
Funds, P.O. Box 182706, Columbus, Ohio 43218-2706, 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
26
<PAGE>
. 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, Fifth Third Funds, P.O. Box 182706, Columbus, Ohio 43218-
2706.
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.
Distribution Arrangements/Sales Charges
This section describes the sales charges and fees you
will pay as an investor in different share classes
offered by the Funds and ways to qualify for reduced
sales charges.
<TABLE>
<S> <C> <C>
Investment A Investment B
Sales Charge (Load) None A contingent deferred sales charge
(CDSC) will be imposed on shares
redeemed within 6 years after
purchase.
Distribution/Service (12b-1) Fee Subject to annual distribution and Subject to annual distribution and
shareholder servicing fees of up to to 1.00% of the Fund's assets.
0.25% of the Fund's assets.
Conversion None Converts to Investment A shares
after 8 years.
</TABLE>
Calculation of Sales Charges
Investment A Shares
Investment A Shares are sold at their public offering
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.
Investment B Shares
Investment B shares are offered at NAV, without any up-
front sales charge. Therefore, all of the money that you
invest in the Fund is used to purchase Fund shares. If
you sell your Investment B shares before the end of the
6th year after purchase, you will pay a contingent
deferred sale 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, such
as shares purchased with reinvested dividends and
distributions, will be redeemed first, followed by
shares subject to the lowest CDSC.
Investment B shares are subject to the following CDSC
schedule:
Year of Redemption % of NAV (at time of purchase
After Purchase or sale if lower)
deducted from proceeds
27
<PAGE>
<TABLE>
<S> <C>
During the first year 5%
During the second year 4%
During the third or fourth years 3%
During the fifth year 2%
During the sixth year 1%
During the seventh or eight years 0%
</TABLE>
The CDSC will be waived under certain circumstances,
including the following:
. Minimum required distributions from an IRA or other
qualifying retirement plan to a shareholder who has
attained age 70 1/2.
. Redemptions from accounts following the death or
disability of the shareholder.
. Investors who purchased through a participant directed
defined benefit plan.
. Returns of excess contributions to certain retirement
plans.
. Distributions of less than 12% of the annual account
value under the Systematic Withdrawal Plan.
. Shares issued in a plan of reorganization sponsored by
Fifth Third Bank, or shares redeemed involuntarily in a
similar situation.
Distribution/Service
(12b-1) Fees
12b-1 fees compensate the Distributor and other dealers
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.
Investment A shares pay a 12b-1 fee at an annual rate of
up to 0.25% of the average daily net assets of the
applicable Fund which the Distributor may use for
shareholder servicing or distribution. Investment B
shares pay a 12b-1 fee at an annual rate 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.
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.
Conversion to Investment B shares convert automatically to Investment
Investment A A shares 8 years after purchase. After conversion, the
Shares 12b-1 fees applicable to your shares are reduced from
1.00% to 0.25% of the average daily net assets.
28
<PAGE>
Dealers Incentives
BISYS, the distributor of Fund shares, in its
discretion, may pay all dealers selling Investment A
shares or Investment B shares all or a portion of the
sales charges it normally retains.
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.
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. Distributions are
taxable to shareholders even if they are paid from income or gains earned by a
Fund before a shareholder's investment (and thus were included in the price
paid).
Any gain from the sale or exchange of Fund Shares will generally also be subject
to tax.
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.
29
<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 it earned 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.
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. 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 or Railroad Retirement 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.
30
<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). The information for each of
the years or periods ended July 31, 1999 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,
-------------------------------------------------------
Per share data 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.04 0.05 0.05 0.05
Total from investment operations 0.04 0.05 0.05 0.05
Less distributions
Distributions to shareholders from net investment income (0.04) (0.05) (0.05) (0.05)
Total distributions (0.04) (0.05) (0.05) (0.05)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 4.41% 5.13% 5.00% 5.11%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.75% 0.52% 0.51% 0.51%
Net investment income 4.26% 5.02% 4.90% 4.97%
Expense waiver/reimbursement (a) 0.17% 0.47% 0.44% 0.42%
Supplemental data
Net assets, end of period (000s) $381,105 $150,286 $110,543 $ 68,884
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
31
<PAGE>
Financial Highlights
Fifth Third Prime Money Market Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------------------------------------------
Per Share Data 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.04 0.05 0.05 0.05
Total from investment operations 0.04 0.05 0.05 0.05
Less distributions
Distributions to shareholders from net investment income (0.04) (0.05) (0.05) (0.05)
Total distributions (0.04) (0.05) (0.05) (0.05)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 4.53% 5.25% 5.11% 5.20%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.75% 0.52% 0.52% 0.49%
Net investment income 4.39% 5.13% 4.99% 5.06%
Expense waiver/reimbursement(a) 0.13% 0.47% 0.44% 0.40%
Supplemental data
Net assets, end of period (000s) $ 75,024 $ 36,552 $ 33,438 $ 19,341
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
32
<PAGE>
Financial Highlights
Fifth Third Prime Money Market Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
July 31,
2000
----
<S> <C>
Per Share Data
Net asset value, beginning of period
Income from investment operations
Net investment income
Total from investment operations
Less distributions
Distributions to shareholders from net investment income
Total distributions
Net asset value, end of period
Total return
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses
Net investment income
Expense waiver/reimbursement(a)
Supplemental data
Net assets, end of period (000s)
</TABLE>
33
<PAGE>
Financial Highlights
Fifth Third Tax Exempt Money Market Fund
Investment A Shares**
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31, Year Ended September 30,
2000 1999* 1998 1997 1996
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Data
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.03 0.03
Total from investment operations 0.03 0.03 0.03 0.03
Less distributions
Distributions to shareholders from net investment
income (0.03) (0.03) (0.03) (0.03)
Total distributions (0.03) (0.03) (0.03) (0.03)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 2.18%(c) 2.74% 2.72% 2.67%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.75%(b) 0.71% 0.80% 0.89%
Net investment income 2.60%(b) 2.88% 2.79% 2.66%
Expense waiver/reimbursement(a) 0.44%(b) - - -
Supplemental data
Net assets, end of period (000s) $ 26,715 $44,494 $60,284 $59,915
</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
34
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Fifth Third Funds Table of Contents
Cardinal Fund
Institutional, Investment A, and Investment C Shares
Objectives, Strategies and Risks
3 Overview
4 Fifth Third Cardinal Fund
Shareholder Fees and Fund Expenses
6 Fee Table
7 Expense Example
Additional Information About the Fund's Investments
__________
8
Fund Management
__________
10 Investment Advisor
10 Portfolio Manager
10 Fund Administration
Shareholder Information
__________
11 Purchasing and Selling Fund Shares
11 Purchasing and Adding to Your Shares
12 Selling Your Shares
13 Exchanging Your Shares
13 Distribution Arrangements/Sales Charges
16 Dividends and Capital Gains
17 Taxation
__________
<PAGE>
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 Cardinal Fund (the
"Fund"), a separate series of Fifth Third Funds (the "Trust"), including:
. the investment objective
. principal investment strategies
. principal risks, and
. volatility and performance information
The Fund is managed by Fifth Third Bank.
Like all mutual funds (other than money market funds), the share price of the
Fund may rise and fall in value and you could lose money. There is no guarantee
that the Fund will achieve its objective.
3
<PAGE>
Fifth Third Cardinal Fund
[Graphic]
Fundamental Objective
Long-term growth of capital and income. Current
income is a secondary objective.
Principal Investment Under normal market conditions, the Fund
Strategies invests at least 65% of total assets in common
stocks that have the 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 Investment Risks
The principal risks of investing in the Fund
An investment in the Fund is include the risks of investing in equity
not a deposit of Fifth Third securities, such as the risk of sudden and
Bank or any other bank and unpredictable drops in value or periods of
is not insured or guaranteed lackluster performance.
by the FDIC or any other
government 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.
Significant investment in large companies also
creates various risks for the Fund. For
instance, larger, more 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 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.
4
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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.
LOGO
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q4 1998 [ %]
Worst quarter: Q3 1990 [ %]
Year to Date Return (1/1/00 to 9/30/00) [ %]
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ %] [ %] [ %] [ %]
(with 4.50% sales charge)
Investment C Shares 10/22/98 N/A N/A N/A [ %]
(with applicable Contingent Deferred Sales Charge)
S&P 500(R) Index [ %] [ %] [ %] (Since 5/31/75)
N/A
S&P 500(R) Index [ %]
</TABLE>
/1/ For the period prior to September 21, 1998, the quoted performance of the
Fund reflects the performance of the 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.
5
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Shareholder Fees and Fund Expenses
Fee Table
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
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. The Fund's fees and expenses are estimates and are based upon
actual operating expenses of other Fifth Third Funds.
Shareholder
Fees
<TABLE>
<CAPTION>
Fifth Third
Cardinal
Fund
A C Institutional
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases 4.50% None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
Maximum Deferred Sales Load/1/ None 1.00% None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management fees 0.60% 0.60% 0.60%
Distribution/Service (12b-1) fees/2/ 0.25% 0.75% None
Other expenses [ ]% [ ]% [ ]%
Total Annual Fund Operating Expenses [ ]% [ ]% [ ]%
Fee Waivers/2/ [ ]% [ ]% [ ]%
Net Total Annual Fund Operating Expenses [ ]% [ ]% [ ]%
</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.
/2/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees
and/or reimburse expenses through November 30, 2001. [CONFIRM]
6
<PAGE>
Expense Example
Use the table below to compare fees and expenses with the fees and expenses of
other mutual funds. The table illustrates the amount of your share of Fund fees
and expenses, assuming a $10,000 initial investment, 5% annual return, payment
of maximum sales charges, and the Fund's operating expenses remain the same.
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, actual amounts may be different.
<TABLE>
<S> <C> <C> <C> <C>
Fifth Third Cardinal Fund 1 3 5 10
Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Institutional Shares $[ ] $[ ] $[ ] $[ ]
</TABLE>
7
<PAGE>
Additional Information About The Fund's Investments
Investment Practices
--------------------
The Cardinal Fund invests in a variety of securities and employs a number of
investment techniques. Each security and technique involves certain risks. The
following table describes the securities and techniques the Cardinal Fund uses,
as well as the main risks they pose. Equity securities are subject mainly to
market risk. Fixed income securities are primarily influenced by market, credit
and prepayment risks, although certain securities may be subject to additional
risks. Following the table is a more complete discussion of risk. You may also
consult the Statement of Additional Information for additional details regarding
these and other permissible investments.
<TABLE>
<CAPTION>
INSTRUMENT CARDINAL FUND INVESTS RISK TYPE
---------- --------------------- ---------
<S> <C> <C>
American Depository Receipts (ADRs): ADRs are [X] Market
foreign shares of a company held by a U.S. bank Political
that issues a receipt evidencing ownership. Foreign Investment
Asset-Backed Securities: Securities secured by [X] Pre-payment
company receivables, home equity loans, truck and Market
auto loans, leases, credit card receivables and Credit
other securities backed by other types of Interest Rate
receivables or other assets. Regulatory
Liquidity
Bonds: Interest-bearing or discounted government [X] Market
or corporate securities that obligate the issuer Credit
to pay the bondholder a specified sum of money, Interest Rate
usually at specific intervals, and to repay the
principal amount of the loan at maturity.
Call and Put Options: A call option gives the [X] Management
buyer the right to buy, and obligates the seller Liquidity
of the option to sell, a security at a specified Credit
price. A put option gives the buyer the right to Market
sell, and obligates the seller of the option to Leverage
buy a security at a specified price.
Commercial Paper: Secured and unsecured short-term [X] Credit
promissory notes issued by corporations and other Liquidity
entities. Maturities generally vary from a few Market
days to nine months. Interest Rate
Common Stock: Shares of ownership of a company. [X] Market
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C>
Convertible Securities: Bonds or preferred stock [X] Market
that convert to common stock. Credit
Derivatives: Instruments whose value is derived [X] Management
from an underlying contract, index or security, Market
or any combination thereof, including futures, Credit
options (e.g., put and calls), options on Liquidity
futures, swap agreements, and some Leverage
mortgage-backed securities. Interest Rate
Foreign Securities: Stocks issued by foreign [X] Market
companies, as well as commercial paper of foreign Political
issuers and obligations of foreign banks, Liquidity
overseas branches of U.S. banks and supranational Foreign Investment
entities.
Futures and Related Options: A contract providing [X] Management
for the future sale and purchase of a specified Market
amount of a specified security, class of Credit
securities, or an index at a specified time in Liquidity
the future and at a specified price. Leverage
Illiquid Securities: Securities which may be [X] Liquidity
difficult to sell at an acceptable price. Market
Investment Company Securities: Shares of [X] Market
investment companies. These investment
companies may include money market funds of Fifth
Third Funds and shares of other registered
investment companies for which the Adviser to a
Fund or any of their affiliates serves as
investment adviser, administrator or distributor.
Investment Grade Bonds: Interest-bearing or [X] Market
discounted government or corporate securities Credit
that obligate the issuer to pay the bondholder a
specified sum of money, usually at specific
intervals, and to repay the principal amount of
the loan at maturity. Investment grade bonds are
those rated BBB or better by S&P or Baa or better
by Moody's or similarly rated by other nationally
recognized statistical rating organizations, or,
if not rated, determined to be of comparable
quality by the Adviser.
Money Market Instruments: Investment-grade, U.S. [X] Market
dollar denominated debt securities that have Credit
remaining maturities of one year or less. These
securities may include U.S. government
obligations, commercial paper and other
short-term corporate obligations, repurchase
agreements collateralized with U.S. government
securities, certificates of deposit, bankers'
acceptances, and other financial institution
obligations. These securities may carry fixed or
variable interest rates.
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C>
Motgage-Backed Securities: Debt obligations [X] Pre-payment
secured by real estate loans and pools of loans. Market
These include collateralized mortgage obligations Credit
and real estate mortgage investment conduits. Regulatory
Repurchase Agreements: The purchase of a security [X] Market
and the simultaneous commitment to return the Leverage
security to the seller at an agreed upon price on
an agreed upon date. This is treated as a loan.
Restricted Securities: Securities not registered [X] Liquidity
under the Securities Act of 1933, such as Market
privately placed commercial paper and Rule 144A
securities.
Reverse Repurchase Agreement: The sale of a [X] Market
security and the simultaneous commitment to buy Leverage
the security back at an agreed upon price on an
agreed upon date. This is treated as a borrowing
by a Fund.
Securities Lending: The lending of up to 33 1/3% [X] Market
of the Fund's total assets. In return the Fund Leverage
will receive cash, other securities, and/or Liquidity
letters of credit. Credit
Short-Term Trading: The sale of a security soon [X] Market
after its purchase. A portfolio engaging in such
trading will have higher turnover and transaction
expenses.
Stock-Index Options: A security that combines [X] Management
features of options with securities trading using Market
composite stock indices. Credit
U.S. Government Agency Securities: Securities [X] Interest Rate
issued by agencies and instrumentalities of the Credit
U.S. government. These include Ginnie Mae, Fannie
Mae, and Freddie Mac.
U.S. Treasury Obligations: Bills, notes, bonds, [X] Interest Rate
separately traded registered interest and
principal securities, and coupons under bank
entry safekeeping.
When-Issued and Delayed Delivery Transactions: [X] Market
Purchase or contract to purchase securities at a Leverage
fixed price for delivery at a future date. Under Liquidity
normal market conditions, when-issued purchases Credit
and forward commitments will not exceed 20% of
the value of a Fund's total assets.
</TABLE>
10
<PAGE>
Investment Risks
----------------
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "Risk/Return Summary and Fund Expenses." Because of these risks,
the value of the securities held by the Funds may fluctuate, as will the value
of your investment in the Funds. Certain investments and Funds are more
susceptible to these risks than others.
Credit Risk. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade
securities. The price of a security can be adversely affected prior to actual
default as its credit status deteriorates and the probability of default rises.
Foreign Investment Risk. The risk associated with higher transaction costs,
delayed settlements, currency controls and adverse economic developments. This
also includes the risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments and may widen any losses. Exchange rate
volatility also may affect the ability of an issuer to repay U.S. dollar
denominated debt, thereby increasing credit risk. Foreign securities may also
be affected by incomplete or inaccurate financial information on companies,
social upheavals or political actions ranging from tax code changes to
governmental collapse. These risks are more significant in emerging markets.
Interest Rate Risk. The risk that debt prices overall will decline over short
or even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of the Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon or pay-in-kind securities are generally affected to a greater extent
by interest rate changes. These securities tend to be more volatile than
securities which pay interest periodically.
Leverage Risk. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Portfolio also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Portfolio's
hedging transactions will be effective.
Speculative. To the extent that a derivative is not used as a hedge, the
Portfolio is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivatives original cost.
Liquidity Risk. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market.
The seller may have to lower the price, sell other securities instead or forego
an investment opportunity, any of which could have a negative effect on
Portfolio management or performance. This includes the risk of missing out on
an investment opportunity because the assets necessary to take advantage of it
are tied up in less advantageous investments.
11
<PAGE>
Management Risk. The risk that a strategy used by a Fund's portfolio manager
may fail to produce the intended result. This includes the risk that changes in
the value of a hedging instrument will not match those of the asset being
hedged. Incomplete matching can result in unanticipated risks.
Market Risk. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector
of the economy or the market as a whole. There is also the risk that the
current interest rate may not accurately reflect existing market rates. For
fixed income securities, market risk is largely, but not exclusively, influenced
by changes in interest rates. A rise in interest rates typically causes a fall
in values, while a fall in rates typically causes a rise in values. Finally,
key information about a security or market may be inaccurate or unavailable.
This is particularly relevant to investments in foreign securities.
Political Risk. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war.
Pre-Payment/Call Risk. The risk that the principal repayment of a security will
occur at an unexpected time. Prepayment risk is the chance that the repayment
of a mortgage will occur sooner than expected. Call risk is the possibility
that, during times of declining interest rates, a bond issuer will "call" - or
repay - higher yielding bonds before their stated maturity. Changes in pre-
payment rates can result in greater price and yield volatility. Pre-payments
and calls generally accelerate when interest rates decline. When mortgage and
other obligations are pre-paid or called, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income - and the potential for taxable capital gains. Further, with
early prepayment, a Fund may fail to recover any premium paid, resulting in an
unexpected capital loss. Prepayment/call risk is generally low for securities
with a short-term maturity, moderate for securities with an intermediate-term
maturity, and high for securities with a long-term maturity.
Regulatory Risk. The risk associated with Federal and state laws which may
restrict the remedies that a lender has when a borrower defaults on loans.
These laws include restrictions on foreclosures, redemption rights after
foreclosure, Federal and state bankruptcy and debtor relief laws, restrictions
on "due on sale" clauses, and state usury laws.
12
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Fund Management
Investment Advisor
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, serves as
investment advisor to the Fund, and generally is responsible for the daily
management of the Fund and its portfolio. The advisor is a subsidiary of Fifth
Third Bancorp.
As of September 30, 2000, Fifth Third Bank had approximately $_______ billion of
assets under management, including approximately $_______ billion of assets of
Fifth Third Funds.
The annual management fee to be paid by the Fund is 0.60% of average net assets.
Portfolio Manager
Fifth Third Bank
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.
Fund Administration
BISYS Fund Services Limited Partnership ("BISYS") serves as the administrator of
the Funds. The administrator generally assists in all aspects of the Fund's
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 the 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 the Fund, including providing certain
administrative personnel and services necessary to operate the Fund. Fifth Third
Bank receives a fee from BISYS for providing sub-administrative services at an
annual rate of 0.035% of the average aggregate daily net assets of the Fund.
13
<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 Investment A and C 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.
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 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. 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 any class of the Fund
offered by this Prospectus is $1,000. Subsequent
investments must be in amounts of at least $50. An
institutional investor's minimum
14
<PAGE>
investment will be calculated by combining all accounts it
maintains with 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, 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 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 invested into
the Funds. You may elect to make systematic investments on
the 1/st/ or the 15th of each month, or both. If the
1/st/ or the 15/th/ 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.
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
15
<PAGE>
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:
Fifth Third Funds
P.O. Box 182706
Columbus, OH 43218-2706
By Express Mail:
Fifth Third Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
By Wire Transfer
For Subsequent Investments:
Instruct your bank to wire transfer your investment to:
Fifth Third Bank
Cincinnati, OH
A/C #99944318
ABA #042000314
Reference: Fifth Third Funds
FFC: Shareholder name, Fund name, and Account number
Note: Your bank may charge a wire transfer fee.
Systematic Investment Program
To begin making systematic investments or to increase the
amounts you already are investing:
[_] 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 182706
Columbus, OH 43218-2706
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
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<PAGE>
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 or Investment C 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.
In order to sell Institutional 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.
Systematic Withdrawal Plan
You may make automatic withdrawals on a monthly, quarterly or annual basis on
the first 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
during any period when (a) trading on the NYSE is restricted by applicable rules
and regulations of the SEC, (b) the NYSE is closed for other then customary
weekend and holiday closings, (c) the SEC has by order permitted such
suspension, or (d) an emergency exists as determined by the SEC. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send your request by regular mail to: Fifth
Third Funds, P.O. Box 182706, Columbus, Ohio 43218-2706, or by express mail to:
Fifth Third Funds, c/o BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio
43219-3035.
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
Shares may be redeemed in any amount less than $50,000 by telephone.
Call 1-800-282-5706 with instructions as to how you wish
to receive your funds (mail, wire). The Funds make every
effort to insure that 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:
17
<PAGE>
. 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 182706
Columbus, OH 43218-2706
By overnight service
1. Write a letter of instruction indicating:
. 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
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
By wire transfer
(Option available only if previously set up on account.)
Call 1-800-282-5706 to request a wire transfer.
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 Withdrawal Plan
To activate this feature call 1-800-282-5706.
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 [CONFIRM]
. 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
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<PAGE>
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.
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.)
To exchange Institutional 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 for exchange procedures or call 1-888-799-5353.
Notes on exchanges
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<PAGE>
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
182706, Columbus, OH 43218-2706, 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 182706, Columbus, Ohio 43218-2706.
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.
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<PAGE>
Shareholder Information
Distribution Arrangements/ Sales Charges
This section describes the sales charges and fees you
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 Investment C
<S> <C> <C>
Sales Charge (Load) Front-end sales charge No front-end sales
(not applicable to charge. A contingent
money market funds); deferred sales charge
reduced sales charges (CDSC) will be
available. imposed on shares
redeemed within 12
months after purchase;
Distribution/Service Subject to annual Subject to annual
(12b-1) Fee distribution and distribution fees of
shareholder servicing up to 0.75% of the
fees of up to 0.25% of Fund's assets.
the Fund's assets.
Fund Expenses Lower annual expenses Higher annual
than Investment C expenses than
shares. Investment A shares.
Conversion None None
</TABLE>
Calculation of Sales Charges
Investment A Shares
Investment A shares are sold at their public
offering price. This price includes that 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>
Your Investment Sales Charge Sales Charge
as a % of as a % of
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>
21
<PAGE>
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>
Your Investment Sales Charge Sales Charge
as a % of as a % of
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 Reductions
You may qualify for reduced sales charges under the 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 Waivers
Investment A Shares
The following transactions qualify for waivers of sales charges
that apply to Investment A shares:
22
<PAGE>
. 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.
. 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.
Investment C Shares
Class C shares are offered at NAV, without any up-front
sales charge. Therefore, all the money you send to the
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 Privilege
If you have sold Investment A or C shares and decide to
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
12b-1 fees compensate the Distributor and other dealers
and investment representatives for services and expenses
related to the sale and distribution of the Fund's shares
and/or for providing shareholder services. In particular,
these fees help to defray the Distributor's costs of
advancing brokerage commissions to investment
representatives.
23
<PAGE>
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 which the
Distributor may use for shareholder servicing and
distribution.
. Investment C shares pay a 12b-1 fee of up to 0.75% of
the average daily net assets of the applicable Fund.
The Distributor may use up to 0.75% of the 12b-1 fee
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.
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 Incentives
BISYS, the distributor of Fund shares, in its
discretion, may pay all dealers selling Investment A
shares all or a portion of the sales charges it
normally retains.
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
are higher for Investment A shares than for Investment
C shares, because Investment A shares have lower
operating expenses than Investment C shares.
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 quarterly.
Capital gains, if any, are distributed at least annually.
24
<PAGE>
Shareholder Information
Taxation
Federal Income Tax
The 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.
Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price paid).
Any gain from the sale or exchange of Fund shares will generally also be subject
to tax.
This is a brief summary of certain federal income tax consequences relating to
an investment in the Fund, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under federal, state and
local laws.
25
<PAGE>
Shareholder Information
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). The information for each of
the years or periods ended July 31, 1999 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 Cardinal Fund***
Investment A Shares
<TABLE>
<CAPTION>
Year ended Period Ended
------------ ------------
July 31, July 31, Year Ended September 30,
---------- ---------- --------- ---------
2000 1999* 1998 1997 1996
---------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Data
Net Asset Value, Beginning of Period $ 14.87 $ 16.65 $ 13.13 $ 13.23
Income from Investment Operations:
Net investment income (0.01) 0.14 0.14 0.25
Net realized and unrealized gains/(losses) from
investments 5.08 0.27 4.64 1.95
Total from Investment Operations 5.07 0.41 4.78 2.20
Distributions to shareholders from:
Net investment income (0.01) (0.14) (0.13) (0.26)
In excess of net investment income -- (0.04) -- --
Net realized gains (0.55) (2.01) (1.13) (2.04)
Total Distributions (0.56) (2.19) (1.26) (2.30)
Net Asset Value, End of Period $ 19.38 $ 14.87 $ 16.65 $ 13.13
Total Return (excludes sales charge) 34.60% (a) 2.50% 39.17% 17.96%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.04% (b) 0.92% 1.06% 0.75%
Net investment income/(loss) (0.07%)(b) 0.76% 0.97% 1.90%
Expense waiver/reimbursement(c) 0.07% (b) 0.09% 0.06% 0.10%
Supplemental data:
Net Assets at end of period (000s) $243,790 $232,903 $267,908 $229,042
Portfolio turnover(d) 15% 15% 13% 58%
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
26
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund***
Investment C Shares
<TABLE>
<CAPTION>
<S> <C> <C>
Year ended Period ended
---------- ------------
July 31, July 31,
-------- --------
Per Share Data 2000 1999**
---- ------
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)
Ratios/Supplemental Data
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 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.
27
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund***
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
------------- ----------------- ---------------
Per share data July 31, 2000 July 31, 1999* Sept. 30, 1998
------------- ----------------- ---------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 14.86 $ 16.64
Income from investment operations:
Net investment income 0.04 0.15
Net realized and unrealized gains/(losses) from
investments 5.17 0.28
Total from investment operations 5.21 0.43
Distributions to shareholders from:
Net investment income (0.01) (0.15)
In excess of net investment income - (0.05)
Net realized gain on investments (0.55) (2.01)
Total distributions (0.56) (2.21)
Net asset value, end of period $ 19.51 $ 14.86
Total return (excludes sales charge) 35.61%(a) 2.60%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 0.82%(b) 0.82%(b) 0.84%
Net investment income/(loss) 0.16%(b) 0.16%(b) 0.85%
Expense waiver/reimbursement(c) 0.07%(b) 0.07%(b) 0.09%
Supplemental data:
Net assets at end of period (000s) $ 6,946 $ 6,946 $ 25,542
Portfolio turnover(d) 15% 15% 15%
</TABLE>
* Reflects operations for the period from October 1, 1998 through 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.
28
<PAGE>
Fifth Third Funds Table of Contents
Objectives, Strategies and Risks
3 Overview
4 The Funds
Shareholder Fees and Fund Expenses
12 Fee Tables
13 Expense Examples
Additional Information About the Funds' Investments
14
Fund Management
16 Investment Advisor
16 Fund Administration
Shareholder Information
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
Financial Highlights
21
Back Cover
Where to learn more about
Fifth Third Funds
<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.
2
<PAGE>
Fifth Third Government Money Market Fund LOGO
Fundamental Objective
High current income consistent with stability of principal
and liquidity.
Principal Investment Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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 or
unrated securities that are considered equivalent by the
Fund's investment manager. 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.
The Fund may also invest in repurchase agreements
collateralized by the securities mentioned above.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
The Fund's principal risks include interest rate risk, net
asset value risk, and credit risk. Interest rate risk
involves the possibility that the Fund's yield will
decrease due to a decrease in interest rates or that the
value of the Fund's investments will decline due to an
increase in interest rates. Net asset value risk involves
the possibility that the Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves
the risk that an issuer cannot make timely interest and
principal payments on its debt securities.
3
<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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ]%
Worst quarter: Q[ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00): [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% N/A [ ]%
</TABLE>
To obtain current yield information, call 1-888-799-5353.
4
<PAGE>
Fifth Third Prime Money Market Fund LOGO
Fundamental Objective
Current income consistent with stability of principal.
Principal Investment Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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 or
unrated securities that are considered equivalent by the
Fund's investment manager. 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.
The Fund may also invest in repurchase agreements
collateralized by the securities mentioned above.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
The Fund's principal risks include interest rate risk, net
asset value risk, and credit risk. Interest rate risk
involves the possibility that the Fund's yield will
decrease due to a decrease in interest rates or that the
value of the Fund's investments will decline due to an
increase in interest rates. Net asset value risk involves
the possibility that the Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves
the risk that an issuer cannot make timely interest and
principal payments on its debt securities.
5
<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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ]%
Worst quarter: Q[ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00): [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% N/A [ ]%
</TABLE>
To obtain current yield information, call 1-888-799-5353.
6
<PAGE>
Fifth Third Tax Exempt Money Market Fund LOGO
Fundamental Objective
Maximize current income, exempt from federal income tax,
while preserving capital and maintaining liquidity.
Principal Investment Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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 or
unrated securities that are considered equivalent by the
Fund's investment manager. 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.
The Fund may also invest in repurchase agreements
collateralized by U.S. Treasury securities.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
7
<PAGE>
The Fund's principal risks include interest rate risk, net
asset value risk, credit risk, and tax risk. Interest
rate risk involves the possibility that the Fund's yield
will decrease due to a decrease in interest rates or that
the value of the Fund's investments will decline due to an
increase in interest rates. Net asset value risk involves
the possibility that the Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves
the risk that an issuer cannot make timely interest and
principal payments on its debt securities. Tax risk
involves the possibility that the issuer of securities
will fail to comply with certain requirements of the
Internal Revenue Code, which would create adverse tax
consequences.
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 Institutional Shares
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ]%
Worst quarter: Q[ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00): [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
</TABLE>
To obtain current yield information, call 1-888-799-5353.
*The Fund first offered Institutional shares on 9/21/98. The quoted performance
of the Fund for the period prior to 9/21/98 reflects the performance 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 have different expenses.
9
<PAGE>
Fifth Third U.S. Treasury Money Market Fund LOGO
Fundamental Objective
Stability of principal and current income consistent with
stability of principal.
Principal Investment Strategies
The Fund manages its portfolio subject to strict SEC
guidelines, which are designed so that the Fund may
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 (397
days or less) 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, short-term obligations issued by the U.S.
Treasury, which are guaranteed as to principal and
interest by the U.S. government, and repurchase agreements
collateralized by U.S. Treasury securities.
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.
Principal Investment Risks
An investment in the Fund is not a deposit of 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.
The Fund's principal risks include interest rate risk and
net asset value risk. Interest rate risk involves the
possibility that the Fund's yield will decrease due to a
decrease in interest rates or that the value of the Fund's
investments will decline due to an increase in interest
rates. Net asset value risk involves the possibility that
the Fund will be unable to meet its goal of a constant
$1.00 per share.
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
1999 [ ]
The bar chart above does not reflect the impact of
any applicable sales charges or account fees, which
would reduce returns.
Best quarter: Q[ ] [ [ ]%
]
Worst quarter: Q[ ] [ [ ]%
]
Year to Date Return (1/1/00 to 9/30/00): [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% N/A [ ]%
</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, 2000.
Shareholder Fees
<TABLE>
<CAPTION>
Money Market Funds--Fee Table
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
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 [ ]% [ ]% [ ]% [ ]%
Total Annual Fund Operating Expenses [ ]% [ ]% [ ]% [ ]%
Fee Waivers/1/
Net Total Annual Fund Operating Expenses
</TABLE>
/1/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001. [CONFIRM]
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
Fifth Third Government 1 3 5 10
Money Market Fund Year Years Years Years
Institutional Shares $[ $[ ] $[ ] $[ ]
]
Fifth Third Prime 1 3 5 10
Money Market Fund Year Years Years Years
Institutional Shares $[ $[ ] $[ ] $[ ]
]
Fifth Third Tax Exempt 1 3 5 10
Money Market Fund Year Years Years Years
Institutional Shares $[ $[ ] $[ ] $[ ]
]
Fifth Third U.S. Treasury 1 3 5 10
Money Market Fund Year Years Years Years
Institutional Shares $[ $[ ] $[ ] $[ ]
]
13
<PAGE>
Additional Information About the Funds' Investments
Investment Practices
--------------------
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. The following
table describes the securities and techniques the Funds use, as well as the main
risks they pose. Equity securities are subject mainly to market risk. Fixed
income securities are primarily influenced by market, credit and prepayment
risks, although certain securities may be subject to additional risks. Following
the table is a more complete discussion of risk. You may also consult the
Statement of Additional Information for additional details regarding these and
other permissible investments.
FUND NAME FUND CODE
--------- ---------
Government Money Market Fund 1
Ohio Tax Exempt Money Market Fund 2
Prime Money Market Fund 3
Tax Exempt Money Market Fund 4
U.S. Treasury Money Market Fund 5
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
---------- ---------- ---------
<S> <C> <C>
Bankers' Acceptances: Bills of exchange or time 3, 4 Credit
drafts drawn on and accepted by a commercial Liquidity
bank. Maturities are generally six months or Market
less. Interest Rate
Bonds: Interest-bearing or discounted securities Market
that obligate the issuer to pay the bondholder a Credit
specified sum of money, usually at specific Interest Rate
intervals, and to repay the principal amount of
the loan at maturity. Corporate: 3
Government: 1, 3
Certificates of Deposit: Negotiable instruments 3, 4 Market
with a stated maturity. Credit
Liquidity
Interest Rate
Commercial Paper: Secured and unsecured short-term 3, 4 Credit
promissory notes issued by corporations and other Liquidity
entities. Maturities generally vary from a few Market
days to nine months. Interest Rate
Derivatives: Instruments whose value is derived 1, 3-5 Management
from an underlying contract, index or security, Market
or any combination thereof, including futures, Credit
options (e.g., put and calls), options on Liquidity
futures, swap agreements, and some Leverage
mortgage-backed securities. Interest Rate
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C>
Futures and Related Options: A contract providing 1 Management
for the future sale and purchase of a specified Market
amount of a specified security, class of Credit
securities, or an index at a specified time in Liquidity
the future and at a specified price. Leverage
Illiquid Securities: Securities which may be 1, 3-5 Liquidity
difficult to sell at an acceptable price. Market
Investment Company Securities: Shares of 1, 3-5 Market
investment companies. These investment
companies may include money market funds of Fifth
Third Funds and shares of other registered
investment companies for which the Adviser to a
Fund or any of their affiliates serves as
investment adviser, administrator or distributor.
Investment Grade Bonds: Interest-bearing or 3, 4 Market
discounted government or corporate securities Credit
that obligate the issuer to pay the bondholder a
specified sum of money, usually at specific
intervals, and to repay the principal amount of
the loan at maturity. Investment grade bonds are
those rated BBB or better by S&P or Baa or better
by Moody's or similarly rated by other nationally
recognized statistical rating organizations, or,
if not rated, determined to be of comparable
quality by the Adviser.
Money Market Instruments: Investment-grade, U.S. 1, 3-5 Market
dollar denominated debt securities that have Credit
remaining maturities of one year or less. These
securities may include U.S. government
obligations, commercial paper and other
short-term corporate obligations, repurchase
agreements collateralized with U.S. government
securities, certificates of deposit, bankers'
acceptances, and other financial institution
obligations. These securities may carry fixed or
variable interest rates.
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C>
Municipal Securities: Securities issued by a state 3, 4 Market
or political subdivision to obtain funds for Credit
various public purposes. Municipal securities Political
include (a) governmental lease certificates of Tax
participation issued by state or municipal Regulatory
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; (b) municipal notes and
tax-exempt commercial paper; (c) serial bonds;
(e) tax anticipation notes sold to finance
working capital needs of municipalities in
anticipation of receiving taxes at a later date;
(f) bond anticipation notes sold in anticipation
of the issuance of long-term bonds in the future;
(g) pre-refunded municipal bonds whose timely
payment of interest and principal is ensured by
an escrow of U.S. government obligations; and (h)
general obligation bonds.
Participation Interests: Interests in bank loans 2, 4 Interest Rate
made to corporations Credit
Liquidity
Preferred Stocks: Preferred Stocks are equity Market
securities that generally pay dividends at a
specified rate and have preference over common
stock in the payment of dividends and
liquidation. Preferred stock generally does not
carry voting rights.
Repurchase Agreements: The purchase of a security 1, 3-5 Market
and the simultaneous commitment to return the Leverage
security to the seller at an agreed upon price on
an agreed upon date. This is treated as a loan.
Restricted Securities: Securities not registered 1, 3-5 Liquidity
under the Securities Act of 1933, such as Market
privately placed commercial paper and Rule 144A
securities.
Reverse Repurchase Agreement: The sale of a 1, 3-5 Market
security and the simultaneous commitment to buy Leverage
the security back at an agreed upon price on an
agreed upon date. This is treated as a borrowing
by a Fund.
</TABLE>
16
<PAGE>
<TABLE>
<S> <C> <C>
Securities Lending: The lending of up to 33 1/3% 1, 3, 4 Market
of the Fund's total assets. In return the Fund Leverage
will receive cash, other securities, and/or Liquidity
letters of credit. Credit
Time Deposits: Non-negotiable receipts issued by a 3, 4 Liquidity
bank in exchange for the deposit of funds. Credit
Market
U.S. Government Agency Securities: Securities 1, 3-5 Interest Rate
issued by agencies and instrumentalities of the Credit
U.S. government. These include Ginnie Mae, Fannie
Mae, and Freddie Mac.
U.S. Treasury Obligations: Bills, notes, bonds, 1, 3-5 Interest Rate
separately traded registered interest and
principal securities, and coupons under bank
entry safekeeping.
Variable and Floating Rate Instruments: 3, 4 Credit
Obligations with interest rates which are reset Liquidity
daily, weekly, quarterly or some other period and Market
which may be payable to the Fund on demand.
When-Issued and Delayed Delivery Transactions: 1, 3-5 Market
Purchase or contract to purchase securities at a Leverage
fixed price for delivery at a future date. Under Liquidity
normal market conditions, when-issued purchases Credit
and forward commitments will not exceed 20% of
the value of a Fund's total assets.
Yankee Bonds and Similar Debt Obligations: U.S. 1, 3-5 Market
dollar denominated bonds issued by foreign Credit
corporations or governments. Sovereign bonds are Interest Rate
those issued by the government of a foreign
country. Supranational bonds are those issued by
supranational entities, such as the World Bank
and European Investment Bank. Canadian bonds are
those issued by Canadian provinces.
Zero-Coupon Debt Obligations: Bonds and other debt 1, 3, 4 Credit
that pay no interest, but are issued at a Market
discount from their value at maturity. When held Interest Rate
to maturity, their entire return equals the
difference between their issue price and their
maturity value.
</TABLE>
17
<PAGE>
Investment Risks
----------------
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "Risk/Return Summary and Fund Expenses." Because of these risks,
the value of the securities held by the Funds may fluctuate, as will the value
of your investment in the Funds. Certain investments and Funds are more
susceptible to these risks than others.
Credit Risk. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade
securities. The price of a security can be adversely affected prior to actual
default as its credit status deteriorates and the probability of default rises.
Interest Rate Risk. The risk that debt prices overall will decline over short
or even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of the Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon or pay-in-kind securities are generally affected to a greater extent
by interest rate changes. These securities tend to be more volatile than
securities which pay interest periodically.
Leverage Risk. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Portfolio also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Portfolio's
hedging transactions will be effective.
Speculative. To the extent that a derivative is not used as a hedge, the
Portfolio is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivatives original cost.
Liquidity Risk. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market.
The seller may have to lower the price, sell other securities instead or forego
an investment opportunity, any of which could have a negative effect on
Portfolio management or performance. This includes the risk of missing out on
an investment opportunity because the assets necessary to take advantage of it
are tied up in less advantageous investments.
Management Risk. The risk that a strategy used by a Fund's portfolio manager
may fail to produce the intended result. This includes the risk that changes in
the value of a hedging instrument will not match those of the asset being
hedged. Incomplete matching can result in unanticipated risks.
Market Risk. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector
of the economy or the market as a whole. There is also the risk that the
current interest rate may not accurately reflect existing market rates. For
fixed income securities, market risk is largely, but not exclusively, influenced
by changes in interest rates. A rise in interest rates typically causes a fall
in values, while a fall in rates typically causes a rise in values. Finally,
key information about a security or market may be inaccurate or unavailable.
This is particularly relevant to investments in foreign securities.
18
<PAGE>
Political Risk. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war.
Pre-Payment/Call Risk. The risk that the principal repayment of a security will
occur at an unexpected time. Prepayment risk is the chance that the repayment
of a mortgage will occur sooner than expected. Call risk is the possibility
that, during times of declining interest rates, a bond issuer will "call" - or
repay - higher yielding bonds before their stated maturity. Changes in pre-
payment rates can result in greater price and yield volatility. Pre-payments
and calls generally accelerate when interest rates decline. When mortgage and
other obligations are pre-paid or called, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income - and the potential for taxable capital gains. Further, with
early prepayment, a Fund may fail to recover any premium paid, resulting in an
unexpected capital loss. Prepayment/call risk is generally low for securities
with a short-term maturity, moderate for securities with an intermediate-term
maturity, and high for securities with a long-term maturity.
Regulatory Risk. The risk associated with Federal and state laws which may
restrict the remedies that a lender has when a borrower defaults on loans.
These laws include restrictions on foreclosures, redemption rights after
foreclosure, Federal and state bankruptcy and debtor relief laws, restrictions
on "due on sale" clauses, and state usury laws.
Tax Risk. The risk that the issuer of the securities will fail to comply with
certain requirements of the Internal Revenue Code, which would cause adverse tax
consequences.
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, 2000, Fifth Third Bank had approximately $ billion of assets
under management, including approximately $ billion of assets of Fifth Third
Funds.
The management fees paid by the Funds for the fiscal year ended July 31, 2000
were as follows:
As a percentage of
average net assets
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%
Fund Administration
BISYS Fund Services Limited Partnership ("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.
19
<PAGE>
Maximum Average Aggregate Daily
------- --------------------------
Administrative Fee
------------------
Net Assets of the Trust
--------------------------
0.20% of the first $1 billion
0.18% of the next $1 billion
0.17% in excess of $2 billion
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 0.035% of the average aggregate daily net assets of the
Funds.
20
<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.
21
<PAGE>
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.
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
your request 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.
Exchanging Your Shares
22
<PAGE>
You may exchange your Fund shares for Institutional 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.
Instructions for Exchanging Shares
To exchange 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 for
exchange procedures or call 1-888-799-5353.
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.
Shares of the new Fund must be held under 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.
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.
Taxation
Federal Income Tax
23
<PAGE>
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. Distributions are
taxable to shareholders even if they are paid from income or gains earned by a
Fund before a shareholder's investment (and thus were included in the price
paid).
Any gain from the sale or exchange of Fund Shares will generally also be subject
to tax.
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 it earned 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.
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. 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 or Railroad Retirement 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.
24
<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). The information for each of
the years or periods ended July 31, 1999 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.
Institutional Shares
Fifth Third Government Money Market Fund
<TABLE>
<CAPTION>
Year Ended July 31,
----------------------------------------------------
Per share data 2000 1999 1998 1997 1996
---- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.05 0.05
Total from investment operations 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)
Total distributions (0.05) (0.05) (0.05) (0.05)
Net asset value, end of the period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 4.60% 5.13% 5.01% 5.11%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.56% 0.52% 0.51% 0.50%
Net investment income 4.52% 5.02% 4.90% 4.99%
Expense waiver/reimbursement (a) 0.11% 0.12% 0.09% 0.07%
Supplemental data
Net assets, end of period (000s) $252,987 $221,034 $162,543 $132,326
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
25
<PAGE>
Financial Highlights
Institutional Shares
Fifth Third Prime Money Market Fund
<TABLE>
<CAPTION>
Year Ended July 31,
----------------------------------------------------
Per share data 2000 1999 1998 1997 1996
---- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.05 0.05
Total from investment operations 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)
Total distributions (0.05) (0.05) (0.05) (0.05)
Net asset value, end of the period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 4.76% 5.25% 5.11% 5.20%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.52% 0.52% 0.52% 0.49%
Net investment income 4.66% 5.13% 4.99% 5.07%
Expense waiver/reimbursement (a) 0.11% 0.12% 0.09% 0.08%
Supplemental data
Net assets, end of period (000s) $348,366 $368,348 $341,827 $300,821
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
26
<PAGE>
Financial Highlights
Institutional Shares
Fifth Third Tax Exempt Money Market Fund
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, September 30,
Per share data 2000 1999* 1998**
---------- ------- -------------
<S> <C> <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
27
<PAGE>
Financial Highlights
Institutional Shares
Fifth Third U.S. Treasury Money Market Fund
<TABLE>
<CAPTION>
Year Ended July 31,
----------------------------------------------------
Per share data 2000 1999 1998 1997 1996
---- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.05 0.05
Total from investment operations 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)
Total distributions (0.05) (0.05) (0.05) (0.05)
Net asset value, end of the period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 4.68% 5.31% 5.11% 5.24%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses 0.38% 0.38% 0.42% 0.43%
Net investment income 4.57% 5.19% 5.00% 5.10%
Expense waiver/reimbursement (a) 0.24% 0.24% 0.17% 0.12%
Supplemental data
Net assets, end of period (000s) $856,286 $876,089 $539,087 $489,228
</TABLE>
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
28
<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
<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 Dean Witter Investment Management Inc. ("MSDW")
acts as investment subadvisor to Fifth Third International Equity 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.
2
<PAGE>
Fifth Third Quality Growth Fund LOGO
Fundamental Objective
Growth of capital. Income is a secondary
objective.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in
common stocks of high quality 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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund
include the 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.
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 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.
3
<PAGE>
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. The returns for
Investment B and 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
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment B Shares/1/ [1/1/83] [ ]% [ ]% [ ]% [ ]%
Investment C Shares/2/ 4/25/96 [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 12/31/82)
S&P 500(R) Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ Because Investment B shares commenced operations on __ and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
5
<PAGE>
/2/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 25, 1996.
6
<PAGE>
Fifth Third Equity Income Fund LOGO
Fundamental Objective
High level of current income consistent with
capital appreciation.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in
common stocks of U.S. companies with a
weighted average market value similar to that
of the Standard & Poor's 500 Composite Stock
Price Index focusing on stocks that pay an
increasing dividend.
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 corporate bonds, which at
the time of investment, 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.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund
include the 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.
Significant investment in large companies
also creates various risks for the Fund. For
instance, larger, more 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
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
7
<PAGE>
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.
8
<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. The returns for
Investment B and 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
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment B Shares/1/ [1/1/83] [ ]% [ ]% [ ]% [ ]%
Investment C Shares/2/ [ ] [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 12/31/82)
S&P 500(R) Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ Because Investment B shares commenced operations on __ and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
9
<PAGE>
/2/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on January 27, 1997
10
<PAGE>
Fifth Third Technology Fund LOGO
Fundamental Objective
Long-term capital appreciation.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in the
equity securities of U.S. and, to a lesser
extent, foreign technology companies.
Technology companies are those that are
engaged in developing products, processes or
services that provide technological advances.
Those companies may be in any of a variety of
industries, such as computer hardware,
software, electronic components and systems,
telecommunications, Internet, and media and
information services companies. They also may
include companies in more traditional
industries, such as certain securities
brokers and consumer products retailers, that
have extensively used technological advances
to develop new or to improve products or
processes.
The Fund generally takes a growth approach to
selecting stocks, looking for established
companies that appear poised to grow because
of new products, technology or management, as
well as new companies that are in the
developmental stage. Factors in identifying
these companies may include the quality of
management, financial strength, a strong
position relative to competitors and a stock
price that appears reasonable relative to its
expected growth rate. The Fund may invest in
companies of any size, including small, high
growth companies. The Fund also may invest in
companies whose shares are being, or recently
have been, offered to the public for the
first time.
The Fund reserves the right to invest up to
35% of total assets in other securities, such
as, corporate bonds and government
securities.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as the risk of sudden and
unpredictable drops in value or periods of
lackluster performance.
The Fund, by concentrating in technology
stocks, assumes the risks of holding
technology stocks. For example, technology
stocks tend to:
. fluctuate in price more widely and rapidly
than the market as a whole
. underperform other types of stocks or be
difficult to sell when the economy is not
robust, during market downturns, or when
technology stocks are out of favor
. decline in price due to sector specific
developments
11
<PAGE>
. be more vulnerable than most stocks to the
obsolescence of existing technology, expired
patents, short product cycles, price
competition, market saturation and new market
entrants.
To the extent that the Fund invests in mid
cap and small cap stocks, it takes on
additional risks. For instance, mid cap and
small cap stocks tend to be less liquid and
more volatile than large cap stocks. Smaller
companies tend to be unseasoned issuers with
new products and less experienced management.
The prices of most growth stocks are based on
future expectations. As a result, those
stocks tend to be more sensitive than value
stocks to negative earnings surprises and
changes in internal growth rates. Growth
stocks in particular may underperform during
periods when the market favors value stocks.
The Fund's performance may also suffer if
certain stocks do not perform as the
portfolio management team expected.
Through active trading, the fund may have a
high portfolio turnover rate, which can mean
higher taxable distributions and lower
performance due to increased brokerage
costs.
12
<PAGE>
Fifth Third Technology Fund LOGO
Volatility and Performance Information
This section would normally include a bar chart and a table showing how the
Technology Fund has performed and how its performance has varied from year to
year. Because the Fund has not yet been in operation for a full calendar year,
the bar chart and table are not shown.
13
<PAGE>
Fifth Third Pinnacle Fund LOGO
Fundamental Objective
Long-term capital appreciation.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in
common stocks and convertible 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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as the risk of sudden and
unpredictable drops in value or periods of
lackluster performance.
Generally, growth oriented stocks may be
sensitive to market movements. The prices of
growth stocks tend to reflect future
expectations, and when those expectations are
not met, prices generally fall.
Significant investment in large companies
also creates various risks for the Fund. For
instance, larger, more 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.
14
<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. The returns for
Investment B and 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 /1/
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%
1999 [ ]
The bar chart above does not reflect
the impact of any applicable sales
charges or account fees, which would
reduce returns.
Best quarter: Q[ ][ ] [ ]%
Worst quarter: Q[ ][ ] [ ]%
Year to Date Return (1/1/00 to 9/3/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment B Shares/2/ [ ] [ ]% [ ]% [ ]% [ ]%
Investment C Shares/3/ [3/9/98] [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent
Deferred Sales Charge)
[ ]% (Since 2/28/98)
S&P 500(R) Index [ ]%
</TABLE>
15
<PAGE>
/1/ For the period prior to March 6, 1998, the quoted performance of the Fund
reflects the performance of the 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.
/2/ Because Investment B shares commenced operations on __ and therefore do not
have a performance history, the performance for Investment B shares is
based on the performance for Investment A shares, adjusted to reflect the
contractual expenses and sales charges for Investment B shares.
/3/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement
of operations of Investment C shares on March 9, 1998.
16
<PAGE>
Fifth Third Balanced Fund LOGO
Fundamental Objective
Capital appreciation and income.
Principal Investment Strategies
Under normal market conditions, the Fund uses
an asset allocation strategy, investing in
three primary categories of securities:
stocks, bonds and money market instruments.
The Fund intends to invest between 50% to 75%
of total assets in common stocks and
convertible preferred stocks and convertible
corporate bonds, 25% to 40% of total assets
in U.S. Treasury bills, notes and bonds,
securities of U.S. Government agencies and
instrumentalities and corporate debt
securities, including mortgage-backed
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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other
bank and is not insured or guaranteed by the FDIC or any other government
agency.
The principal risks of investing in the Fund
include the risks associated with following
an asset allocation 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.
To the extent the Fund invests in stocks and
convertible securities, it assumes the risks
of equity investing, including sudden and
unpredictable drops in value and periods of
lackluster performance.
17
<PAGE>
Significant investments in large companies also creates
various risks for the Fund. For instance, larger, more
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.
18
<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. The returns for
Investment B and 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
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%
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ [ ]%
Worst quarter: Q[ ] [ [ ]%
Year to Date Return (1/1/00 to 9/30/00): [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment B Shares/1/ [ ]% [ ]% [ ]% [ ]%
Investment C Shares/2/ [4/25/96] [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 12/31/82)
S&P 500(R) Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
19
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
(Since 1/1/83)
LBAB Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ Because Investment B shares commenced operations on __ and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
/2/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 25, 1996.
20
<PAGE>
Fifth Third Mid Cap Fund LOGO
Fundamental Objective
Growth of Capital. Income is a secondary objective.
Principal Investment Strategies
Under normal market conditions, the Fund expects to
invest at least 65% of total assets in common stocks of
mid cap 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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other
bank and is not insured or guaranteed by the FDIC or any other government
agency.
The principal risks of investing in the Fund include
the risks of investing in equity securities, such as
the risk of sudden and unpredictable drops in value or
periods of lackluster performance.
Stocks of medium-sized companies can be more sensitive
to long market declines than larger companies, in part
because they generally do not have the financial
resources that larger companies have. Generally, growth
oriented stocks are 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 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.
21
<PAGE>
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.
22
<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. The returns for
Investment B and 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
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%
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ [ ]%
Worst quarter: Q[ ] [ [ ]%
Year to Date Return (1/1/00 to 9/30/00): [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment B Shares/1/ [ ]% [ ]% [ ]% [ ]%
Investment C Shares/2/ [4/24/96] [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 12/31/84)
S&P Mid Cap 400(R) Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
23
<PAGE>
/1/ Because Investment B shares commenced operations on __ and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
/2/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 24, 1996.
24
<PAGE>
Fifth Third International Equity Fund LOGO
Fundamental Objective
Long-term capital appreciation.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in
equity securities of non-U.S. 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 strategy of select-
ing securities in its portfolio. It
allocates assets among geographic regions
and individual countries and sectors,
rather than emphasizing individual stock
selection. The Fund capitalizes on the
significance of country and sector selection
in international equity portfolio returns
by over and underweighting countries and/or
sectors based on three factors: (i) valua-
tion, (ii) fundamental change, and (iii)
market momentum/technicals.
The Fund's investment subadvisor analyzes
both the global economic environment and the
economies of countries throughout the world,
focusing mainly on the industrialized
countries comprising the MSCI EAFE Index.
Although the Fund invests primarily in
established foreign securities markets, from
time to time, it may also invest in emerging
market countries and, with regard to such
investments, may make global and regional
allocations to emerging markets, as well as
allocations to specific emerging market
countries. 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) by investing in
"baskets" of common stocks and other equity
securities.
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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as, the risk of sudden and
unpredictable drops in value or periods of
lackluster performance.
Stocks of foreign companies present
additional risks for U.S. investors. Stocks
of foreign companies tend to be less liquid
and more volatile than their U.S.
counterparts, in part because accounting
standards and market regulations tend to be
less standardized and economic and political
climates less stable. Fluctuations in
exchange rates also may reduce or eliminate
gains or create losses. These risks usually
are higher in emerging 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.
25
<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 of common
stocks in Europe, Australasia and the Far East.
The returns assume that Fund distributions have been reinvested. The returns for
Investment B and 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%
1999 [ ]
The bar chart above does not reflect the impact
of any applicable sales charges or account
fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% N/A N/A [ ]%
(with 4.50% sales charge)
Investment B Shares/1/ [ ]% N/A N/A [ ]%
Investment C Shares/2/ [4/25/96] [ ]% N/A N/A [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 8/31/94)
EAFE Index [ ]% N/A N/A [ ]%
</TABLE>
/1/ Because Investment B shares commenced operations on and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
/2/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 25, 1996.
26
<PAGE>
Fifth Third Bond Fund For Income LOGO
Fundamental Objective
High level of current income.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in the
following types of investment grade
securities: corporate securities, mortgage-
backed securities, securities of the U.S.
Treasury and U.S. Government agencies and
instrumentalities, and Yankee bonds. 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 money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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
27
<PAGE>
a lower rate. The price or yield of mortgage-
backed securities also may fall if they are
redeemed after that date.
28
<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. The returns for
Investment B and 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
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%
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment C Shares/1/ 1/27/97 [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 1/1/83)
LBIGC [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on January 27, 1997.
29
<PAGE>
Fifth Third Quality Bond Fund LOGO
Fundamental Objective
High current income. Capital growth is a
secondary objective.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in U.S.
Treasury bills, notes and 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 a bond fund
investing in lower quality securities. 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 money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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
30
<PAGE>
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.
31
<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. The returns for
Investment B and 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
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%
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(with 4.50% sales charge)
Investment B Shares/1/ [ ]% [ ]% [ ]% [ ]%
Investment C Shares/2/ [4/25/96] [ ]% [ ]% [ ]% [ ]%
(with applicable Contingent Deferred Sales Charge)
(Since 1/1/83)
LBAB [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ Because Investment B shares commenced operations on and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
32
<PAGE>
/2/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 25, 1996.
33
<PAGE>
Fifth Third U.S. Government Securities Fund LOGO
Fundamental Objective
High level of current income. Capital growth
is a secondary objective.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in U.S.
government securities. At the 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 payment
of principal and interest by the full faith
and credit of the U.S. government and
obligations issued by the agencies or
instrumentalities of the U.S. government, but
not supported by such full faith and credit.
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 debt obligations
of the U.S. government, and are backed by the
U.S. government's full faith and credit of
the U.S. government. 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 money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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.
34
<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. The returns for
Investment B and 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.
Year-by-Year Total Returns as of 12/31 For Investment A Shares
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%
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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) 1/1/86 [ ]% [ ]% [ ]% [ ]%
Investment C Shares/1/
(with applicable Contingent Deferred Sales Charge) 4/24/96 [ ]% [ ]% [ ]% [ ]%
(Since 1/1/86)
[ ]% [ ]% [ ]% [ ]%
LBIGBI
</TABLE>
/1/ The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 24, 1996.
35
<PAGE>
Fifth Third Municipal Bond Fund LOGO
Fundamental Objective
High level of current income that is exempt
from federal regular income taxes.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 80% of total assets in
municipal securities, which pay 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
20% of total assets in other securities, such
as money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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.
36
<PAGE>
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.
37
<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. The returns for
Investment B and 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
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<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 [ ]% [ ]% [ ]% [ ]%
(Since 12/31/82)
LBMBI [ ]% [ ]% [ ]% [ ]%
</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. [CONFIRM FOR 2000]
38
<PAGE>
Fifth Third Ohio Tax Free Bond Fund LOGO
Fundamental Objective
Current income exempt from federal income tax
and the personal income taxes imposed by the
State of Ohio and Ohio municipalities.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 80% of net assets in
municipal securities which pay 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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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.
39
<PAGE>
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.
40
<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. The returns for
Investment B and 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
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception
Date Past Year Past 5 Years Past 10 Years Since Inception
Investment A Shares
<S> <C> <C> <C> <C> <C>
(with 4.50% sales charge) 1/1/87 [ ]% [ ]% [ ]% [ ]%
Investment B Shares/1/ [ ]% [ ]% [ ]% [ ]%
Investment C Shares/2/
(with applicable Contingent Deferred Sales Charge) 4/24/96 [ ]% [ ]% [ ]% [ ]%
(Since 12/31/86)
[ ]% [ ]% [ ]% [ ]%
LBMBI
</TABLE>
41
<PAGE>
/1/Because Investment B shares commenced operations on __ and therefore do not
have a performance history, the performance for Investment B shares is based on
the performance for Investment A shares, adjusted to reflect the contractual
expenses and sales charges for Investment B shares.
/2/The performance of Investment C shares is based on the performance for
Investment A shares, adjusted to reflect the contractual expenses and sales
charges for Investment C shares, for the period prior to the commencement of
operations of Investment C shares on April 24, 1996.
42
<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, 2000.
Shareholder
Fees
<TABLE>
<CAPTION>
Stock Funds--Fee Table
----------------------
Fifth Third Fifth Third Fifth Third Fifth Third
Quality Growth Equity Income Technology Pinnacle
Fund Fund Fund Fund
A B C A B C A B C A B C
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed on
Purchases 4.50% None None 4.50% None None 4.50% None None 4.50% None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends None None None None None None None None None None None None
Maximum Deferred Sales
Load/1/ None 5.00% 1.00% None 5.00% 1.00% None 5.00% 1.00% None 5.00% 1.00%
Annual Fund Operating
Expenses (as a
percentage of average
net assets)
Management fees 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 1.00% 1.00% 1.00% 0.80% 0.80% 0.80%
Distribution/Service
(12b-1) fees/2/ 0.25% 1.00% 0.75% 0.25% 1.00% 0.75% 0.25% 1.00% 0.75% 0.25% 1.00% 0.75%
Other expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]/4/% [ ]/4/% [ ]/4/ [ ]% [ ]% [ ]%
Total Annual Fund [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Operating Expenses
Fee Waivers/3/ [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Net Total Annual Fund
Operating Expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ 5% in the first year after purchase, declining to 4% in the second year, 3%
in the third and fourth years, 2% in the fifth year, 1% in the sixth year and
eliminated thereafter. Approximately eight years after purchase, Investment B
shares automatically convert to 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.
/3/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001. [CONFIRM]
/4/ Other expenses are based on estimated amounts for the current fiscal
year.
43
<PAGE>
Shareholder Fees and Fund Expenses
Shareholder Fees
<TABLE>
<CAPTION>
Stock Funds--Fee Table
----------------------
Fifth Third Fifth Third Fifth Third
Balanced Mid Cap International Equity
Fund Fund Fund
A B C A B C A B C
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge
(Load) Imposed on
Purchases 4.50% None None 4.50% None None 4.50% None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends None None None None None None None None None
Maximum Deferred Sales
Load/1/ None 5.00% 1.00% None 5.00% 1.00% None 5.00% 1.00%
Annual Fund Operating
Expenses (as a
percentage of average
net assets)
Management fees 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 1.00% 1.00% 1.00%
Distribution/Service
(12b-1) fees/2/ 0.25% 1.00% 0.75% 0.25% 1.00% 0.75% 0.25% 1.00% 0.75%
Other expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Total Annual Fund [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Operating Expenses
Fee Waivers/3/ [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Net Total Annual Fund
Operating Expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ 5% in the first year after purchase, declining to 4% in the second year,
3% in the third and fourth years, 2% in the fifth year, 1% in the sixth year and
eliminated thereafter. Approximately eight years after purchase, Investment B
shares automatically convert to 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.
/3/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001. [CONFIRM]
44
<PAGE>
Shareholder Fees and Fund Expenses
Shareholder Fees
<TABLE>
<CAPTION>
Bond Funds--Fee Table
---------------------
Fifth Third Fifth Third Fifth Third Fifth Third Fifth Third
Bond Fund for Quality Bond U.S. Government Municipal Bond Ohio Tax Free
Income Fund Securities Fund Fund Bond Fund
A C A B C A C A C/1/ A B C
<S> <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 None 4.50% None 4.50% None 4.50% None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends None None None None None None None None None None None None
Maximum Deferred
Sales Load/2/ None 1.00% None 5.00% 1.00% None 1.00% None 1.00% None 5.00% 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% 0.55% 0.55%
Distribution/Service
(12b-1) fees/3/ 0.25% 0.75% 0.25% 1.00% 0.75% 0.25% 0.75% 0.25% 0.75% 0.25% 1.00% 0.75%
Other expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Total Annual Fund [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Operating Expenses
Fee Waivers/4/ [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Net Total Annual Fund
Operating Expenses [ ] [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
</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.
[CONFIRM FOR 2000]
------------------
/2/ 5% in the first year after purchase, declining to 4% in the second year,
3% in the third and fourth years, 2% in the fifth year, 1% in the sixth year and
eliminated thereafter. Approximately eight years after purchase, Investment B
shares automatically convert to Investment A shares.
/3/ 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.
/4/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001. [CONFIRM]
---------
45
<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, redemption at the end of each period, and the
Fund's operating expenses remaining the same. Because these examples are
hypothetical and for comparison only, actual amounts may be different.
Stock Funds
<TABLE>
<CAPTION>
Fifth Third Quality Growth 1 3 5 10
Fund Year Years Years Years
<S> <C> <C> <C> <C>
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
<CAPTION>
Fifth Third Equity 1 3 5 10
Income Fund Year Years Years Years
<S> <C> <C> <C> <C>
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
<CAPTION>
1 3
Fifth Third Technology Fund Year Years
<S> <C> <C>
Investment A Shares $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ]
Assuming no Redemption $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ]
Assuming no Redemption $[ ] $[ ]
<CAPTION>
1 3 5 10
Fifth Third Pinnacle Fund Year Years Years Years
<S> <C> <C> <C> <C>
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
</TABLE>
46
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
<CAPTION>
1 3 5 10
Fifth Third Balanced Fund Year Years Years Years
<S> <C> <C> <C> <C>
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
<CAPTION>
1 3 5 10
Fifth Third Mid Cap Fund Year Years Years Years
<S> <C> <C> <C> <C>
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
<CAPTION>
Fifth Third International 1 3 5 10
Equity Fund Year Years Years Years
<S> <C> <C> <C> <C>
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
</TABLE>
Bond Funds
<TABLE>
<CAPTION>
Fifth Third Bond Fund For 1 3 5 10
Year Years Years Years
<S> <C> <C> <C> <C>
Income
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fifth Third Quality Bond 1 3 5 10
Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Fifth Third U.S.
Government Securities 1 3 5 10
Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Fifth Third Municipal 1 3 5 10
Bond Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Fifth Third Ohio Tax Free 1 3 5 10
Bond Fund Year Years Years Years
Investment A Shares $[ ] $[ ] $[ ] $[ ]
Investment B Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
Investment C Shares
Assuming Redemption $[ ] $[ ] $[ ] $[ ]
Assuming no Redemption $[ ] $[ ] $[ ] $[ ]
</TABLE>
48
<PAGE>
Additional Information About The Funds' Investments
Investment Practices
--------------------
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. The following
table describes the securities and techniques the Funds use, as well as the main
risks they pose. Equity securities are subject mainly to market risk. Fixed
income securities are primarily influenced by market, credit and prepayment
risks, although certain securities may be subject to additional risks. Following
the table is a more complete discussion of risk. You may also consult the
Statement of Additional Information for additional details regarding these and
other permissible investments.
<TABLE>
<CAPTION>
FUND NAME FUND CODE
---------- ---------
<S> <C>
Quality Growth Fund 1
Equity Income Fund 2
Technology Fund 3
Pinnacle Fund 4
Balanced Fund 5
Mid Cap Fund 6
International Equity Fund 7
Bond Fund for Income 8
Quality Bond Fund 9
U.S. Government Securities Fund 10
Municipal Bond Fund 11
Ohio Tax Free Bond Fund 12
</TABLE>
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
---------- ---------- ---------
<S> <C> <C>
American Depository Receipts (ADRs): ADRs are 1, 3-7 Market
foreign shares of a company held by a U.S. bank Political
that issues a receipt evidencing ownership. Foreign Investment
Asset-Backed Securities: Securities secured by 1, 5, 6, 8, 9 Pre-payment
company receivables, home equity loans, truck and Market
auto loans, leases, credit card receivables and Credit
other securities backed by other types of Interest Rate
receivables or other assets. Regulatory
Liquidity
Bankers' Acceptances: Bills of exchange or time 1-3, 5, 6, 8, 9, 11 Credit
drafts drawn on and accepted by a commercial Liquidity
bank. Maturities are generally six months or Market
less. Interest Rate
Bonds: Interest-bearing or discounted securities Market
that obligate the issuer to pay the bondholder a Credit
specified sum of money, usually at specific Interest Rate
intervals, and to repay the principal amount of
the loan at maturity.
Corporate: 1-11
Government: 1,2, 4-11
Call and Put Options: A call option gives the buyer 1-10 Management
</TABLE>
49
<PAGE>
<TABLE>
<S> <C> <C>
the right to buy, and obligates the seller of the Liquidity
option to sell, a security at a specified Credit
price. A put option gives the buyer the right to Market
sell, and obligates the seller of the option to Leverage
buy a security at a specified price.
Certificates of Deposit: Negotiable instruments 1-3, 5, 6, 8, 9, 10, 11 Market
with a stated maturity. Credit
Liquidity
Interest Rate
Collateralized Mortgage Obligations: 5, 8-10 Pre-Payment
Mortgage-backed bonds that separate mortgage Interest
pools into different maturity classes.
Commercial Paper: Secured and unsecured short-term 1, 3,-6, 8, 9, 11, 12 Credit
promissory notes issued by corporations and other Liquidity
entities. Maturities generally vary from a few Market
days to nine months. Interest Rate
Common Stock: Shares of ownership of a company. 1-7 Market
Convertible Securities: Bonds or preferred stock 1-7 Market
that convert to common stock. Credit
Derivatives: Instruments whose value is derived 1-12 Management
from an underlying contract, index or security, Market
or any combination thereof, including futures, Credit
options (e.g., put and calls), options on Liquidity
futures, swap agreements, and some Leverage
mortgage-backed securities. Interest Rate
Foreign Currency Transactions: Foreign currency 7 Foreign Investment
transactions include forward foreign currency Market
exchange contracts, foreign currency options, and Political
foreign currency futures transactions.
Foreign Securities: Stocks issued by foreign 1-3, 5-9, 11 Market
companies, as well as commercial paper of foreign Political
issuers and obligations of foreign banks, Liquidity
overseas branches of U.S. banks and supranational Foreign Investment
entities.
Futures and Related Options: A contract providing 1-12 Management
for the future sale and purchase of a specified Market
amount of a specified security, class of Credit
securities, or an index at a specified time in Liquidity
the future and at a specified price. Leverage
High-Yield/High-Risk/Debt Securities: High-yield/ 8-11 Credit
high-risk/debt securities are securities that are Market
rated below investment grade by the primary Liquidity
rating agencies (e.g., BB or lower by Standard & Interest Rate
Poor's and Ba or lower by Moody's). These
securities are
</TABLE>
50
<PAGE>
<TABLE>
<S> <C> <C>
considered speculative and involve
greater risk of loss than investment grade debt
securities. Other terms commonly used to
describe such securities include "lower rated
bonds," "non-investment grade bonds" and "junk
bonds."
Illiquid Securities: Securities which may be 1-12 Liquidity
difficult to sell at an acceptable price. Market
Investment Company Securities: Shares of 1, 5-12 Market
investment companies. These investment
companies may include money market funds of Fifth
Third Funds and shares of other registered
investment companies for which the Adviser to a
Fund or any of their affiliates serves as
investment adviser, administrator or distributor.
Investment Grade Bonds: Interest-bearing or 1, 6, 8, 9, 11, 12 Market
discounted government or corporate securities Credit
that obligate the issuer to pay the bondholder a
specified sum of money, usually at specific
intervals, and to repay the principal amount of
the loan at maturity. Investment grade bonds are
those rated BBB or better by S&P or Baa or better
by Moody's or similarly rated by other nationally
recognized statistical rating organizations, or,
if not rated, determined to be of comparable
quality by the Adviser.
Money Market Instruments: Investment-grade, U.S. 1, 3-12 Market
dollar denominated debt securities that have Credit
remaining maturities of one year or less. These
securities may include U.S. government
obligations, commercial paper and other
short-term corporate obligations, repurchase
agreements collateralized with U.S. government
securities, certificates of deposit, bankers'
acceptances, and other financial institution
obligations. These securities may carry fixed or
variable interest rates.
Mortgage-Backed Securities: Debt obligations 1, 5, 6, 8-10 Pre-payment
secured by real estate loans and pools of loans. Market
These include collateralized mortgage obligations Credit
and real estate mortgage investment conduits. Regulatory
Municipal Securities: Securities issued by a state 11, 12 Market
or political subdivision to obtain funds for Credit
various public purposes. Municipal securities Political
include (a) governmental lease certificates of Tax
participation issued by state or municipal Regulatory
authorities where payment is secured by
installment payments for equipment, buildings, or
other facilities being leased by the state or
municipality; government lease
</TABLE>
51
<PAGE>
<TABLE>
<S> <C> <C>
certificates purchased by the Fund will not contain
nonappropriation clauses; (b) municipal notes and
tax-exempt commercial paper; (c) serial bonds;
(e) tax anticipation notes sold to finance
working capital needs of municipalities in
anticipation of receiving taxes at a later date;
(f) bond anticipation notes sold in anticipation
of the issuance of long-term bonds in the future;
(g) pre-refunded municipal bonds whose timely
payment of interest and principal is ensured by
an escrow of U.S. government obligations; and (h)
general obligation bonds.
Participation Interests: Interests in bank loans 11, 12 Interest Rate
made to corporations. Credit
Liquidity
Preferred Stocks: Preferred Stocks are equity 3, 5, 7 Market
securities that generally pay dividends at a
specified rate and have preference over common
stock in the payment of dividends and
liquidation. Preferred stock generally does not
carry voting rights.
Repurchase Agreements: The purchase of a security 1-12 Market
and the simultaneous commitment to return the Leverage
security to the seller at an agreed upon price on
an agreed upon date. This is treated as a loan.
Restricted Securities: Securities not registered 1-12 Liquidity
under the Securities Act of 1933, such as Market
privately placed commercial paper and Rule 144A
securities.
Reverse Repurchase Agreement: The sale of a 1-12 Market
security and the simultaneous commitment to buy Leverage
the security back at an agreed upon price on an
agreed upon date. This is treated as a borrowing
by a Fund.
Securities Lending: The lending of up to 33 1/3% 1-12 Market
of the Fund's total assets. In return the Fund Leverage
will receive cash, other securities, and/or Liquidity
letters of credit. Credit
Short-Term Trading: The sale of a security soon 1-12 Market
after its purchase. A portfolio engaging in such
trading will have higher turnover and transaction
expenses.
Stock-Index Options: A security that combines 1-12 Management
features of options with securities trading using Market
composite stock indices. Credit
Liquidity
Leverage
</TABLE>
52
<PAGE>
<TABLE>
<S> <C> <C>
Time Deposits: Non-negotiable receipts issued by a 1-3, 5, 6, 8, 9, 11 Liquidity
bank in exchange for the deposit of funds. Credit
Market
U.S. Government Agency Securities: Securities 1-12 Interest Rate
issued by agencies and instrumentalities of the Credit
U.S. government. These include Ginnie Mae, Fannie
Mae, and Freddie Mac.
U.S. Treasury Obligations: Bills, notes, bonds, 1-12 Interest Rate
separately traded registered interest and
principal securities, and coupons under bank
entry safekeeping.
Variable and Floating Rate Instruments: 5, 8, 9, 11, 12 Credit
Obligations with interest rates which are reset Liquidity
daily, weekly, quarterly or some other period and Market
which may be payable to the Fund on demand.
Warrants: Securities, typically issued with 1-3, 5-7 Market
preferred stock or bonds, that give the holder Credit
the right to buy a proportionate amount of common
stock at a specified price.
When-Issued and Delayed Delivery Transactions: 1-12 Market
Purchase or contract to purchase securities at a Leverage
fixed price for delivery at a future date. Under Liquidity
normal market conditions, when-issued purchases Credit
and forward commitments will not exceed 20% of
the value of a Fund's total assets.
</TABLE>
Investment Risks
----------------
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "Risk/Return Summary and Fund Expenses." Because of these risks,
the value of the securities held by the Funds may fluctuate, as will the value
of your investment in the Funds. Certain investments and Funds are more
susceptible to these risks than others.
Credit Risk. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade securities.
The price of a security can be adversely affected prior to actual default as its
credit status deteriorates and the probability of default rises.
Foreign Investment Risk. The risk associated with higher transaction costs,
delayed settlements, currency controls and adverse economic developments. This
also includes the risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments and may widen any losses. Exchange rate
volatility also may affect the ability of an issuer to repay U.S. dollar
denominated debt, thereby increasing credit risk. Foreign securities may also be
affected by incomplete or inaccurate financial information on companies, social
upheavals or political actions ranging from tax code changes to governmental
collapse. These risks are more significant in emerging markets.
53
<PAGE>
Interest Rate Risk. The risk that debt prices overall will decline over short or
even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of the Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon or pay-in-kind securities are generally affected to a greater extent
by interest rate changes. These securities tend to be more volatile than
securities which pay interest periodically.
Investment Style Risk. The risk that returns from a particular class or group of
stocks (e.g., value, growth, small cap, large cap) will trail returns from other
asset classes or the overall stock market. Groups or asset classes of stocks
tend to go through cycles of doing better - or worse - than common stocks in
general. These periods can last for periods as long as several years.
Additionally, a particular asset class or group of stocks could fall out of
favor with the market, causing the Fund to underperform funds that focus on
other types of stocks.
Leverage Risk. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Portfolio also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Portfolio's
hedging transactions will be effective.
Speculative. To the extent that a derivative is not used as a hedge, the
Portfolio is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivatives original cost.
Liquidity Risk. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market. The
seller may have to lower the price, sell other securities instead or forego an
investment opportunity, any of which could have a negative effect on Portfolio
management or performance. This includes the risk of missing out on an
investment opportunity because the assets necessary to take advantage of it are
tied up in less advantageous investments.
Management Risk. The risk that a strategy used by a Fund's portfolio manager
may fail to produce the intended result. This includes the risk that changes in
the value of a hedging instrument will not match those of the asset being
hedged. Incomplete matching can result in unanticipated risks.
Market Risk. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector of
the economy or the market as a whole. There is also the risk that the current
interest rate may not accurately reflect existing market rates. For fixed income
securities, market risk is largely, but not exclusively, influenced by changes
in interest rates. A rise in interest rates typically causes a fall in values,
while a fall in rates typically causes a rise in values. Finally, key
information about a security or market may be inaccurate or unavailable. This is
particularly relevant to investments in foreign securities.
Political Risk. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war.
Pre-Payment/Call Risk. The risk that the principal repayment of a security will
occur at an unexpected time. Prepayment risk is the chance that the repayment of
a mortgage will occur sooner than expected. Call risk is the
54
<PAGE>
possibility that, during times of declining interest rates, a bond issuer will
"call" - or repay - higher yielding bonds before their stated maturity. Changes
in pre-payment rates can result in greater price and yield volatility. Pre-
payments and calls generally accelerate when interest rates decline. When
mortgage and other obligations are pre-paid or called, a Fund may have to
reinvest in securities with a lower yield. In this event, the Fund would
experience a decline in income - and the potential for taxable capital gains.
Further, with early prepayment, a Fund may fail to recover any premium paid,
resulting in an unexpected capital loss. Prepayment/call risk is generally low
for securities with a short-term maturity, moderate for securities with an
intermediate-term maturity, and high for securities with a long-term maturity.
Regulatory Risk. The risk associated with Federal and state laws which may
restrict the remedies that a lender has when a borrower defaults on loans. These
laws include restrictions on foreclosures, redemption rights after foreclosure,
Federal and state bankruptcy and debtor relief laws, restrictions on "due on
sale" clauses, and state usury laws.
Tax Risk. The risk that the issuer of the securities will fail to comply with
certain requirements of the Internal Revenue Code, which would cause adverse tax
consequences.
55
<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
Dean Witter Investment Management Inc. ("MSDW"), 1221 Avenue of the Americas,
New York, New York 10020, serves as investment subadvisor to Fifth Third
International Equity Fund.
As of September 30, 2000, Fifth Third Bank had approximately $ _____ billion of
assets under management, including approximately $ __ billion of assets of Fifth
Third Funds. As of September 30, 2000, Heartland had approximately $ __ billion
of assets under management, including approximately $ _____ million of assets
held by mutual funds. As of September 30, 2000, MSDW, together with its
affiliated institutional asset management companies, had approximately $ __
billion of assets under management, including approximately $ ___ billion of
assets held by mutual funds.
The management and subadvisory fees paid by the Funds for the fiscal year ended
July 31, 2000 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 Technology Fund 1.00%
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.
56
<PAGE>
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.
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.
Steven J. Mygrant has been the co-portfolio manager for the Technology Fund
since 2000. Since 1996, he has been the Director of Equity Analysis at Fifth
Third Bank. Prior to 1996, he was the Director of Equity Research at a large
mid-western bank. He is a member of the Association for Investment Management
and Research and the Cincinnati Society of Security Analysts. He has over 15
years of investment experience and is a Certified Financial Analyst. Steven
earned a B.S. and MBA from The Ohio State University.
Sunil M. Reddy has been the co-portfolio manager for the Technology Fund since
2000. Since 1997, he has been an Equity Analyst covering semiconductor,
semiconductor equipment, enterprise hardware and software sectors at Fifth Third
Bank. Prior to 1997, he was a portfolio manager at a large mid-western bank. He
is a Chartered Financial Analyst with over 10 years of investment experience and
is a member of the Cincinnati Society of Financial Analysts. Sunil earned a B.S.
in Electrical Engineering from The Ohio State University and a MBA from Case
Western Reserve University.
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 Dean Witter Investment 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 MSDW since 1980
and Managing Director of Morgan Stanley & Co. Incorporated
57
<PAGE>
since 1975. He is also a Director and Chairman of various registered investment
companies to which MSDW and certain of its affiliates provide investment
advisory services. Mr. Biggs holds a B.A. from Yale University and an M.B.A.
from New York University.
Ann Thivierge joined MSDW in 1986 and is a Managing Director. She has been a
member of MSDW's Asset Allocation Committee for eight years. She received a B.A.
from James Madison College, Michigan State University in International
Relations and received her M.B.A. from New York University in Finance.
Fund Management
FUND ADMINISTRATION
BISYS Fund Services Limited Partnership ("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
--------------------- ------------------------
<C> <S>
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 0.035% of the average aggregate daily net assets of all the
Funds.
Fund Management
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.
58
<PAGE>
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, Investment B, 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 Investment A and C 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, Investment B 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. The maximum investment is
[$250,000] for total purchases of Investment B
shares of a Fund offered by this Prospectus.
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 Investment Program
You may make monthly systematic investments in
Investment A shares or Investment B 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 1st or the 15th of each month,
or both. If the 1st or the 15th 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.
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<PAGE>
Shareholer Incormation
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:
Fifth Third Funds
P.O. Box 182706
Columbus, OH 43218-2706
By Express Mail:
Fifth Third Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
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<PAGE>
By Wire Transfer
For Subsequent Investments:
Instruct your bank to wire transfer your investment to:
Fifth Third Bank
Cincinnati, OH
A/C #99944318
ABA #042000314
Reference: Fifth Third Funds
FFC: Shareholder name, Fund name, and Account number
Note: Your bank may charge a wire transfer fee.
Systematic Investment Program
To begin making systematic investments or to increase the
amounts you already are investing:
. 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 182706
Columbus, OH 43218-2706
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<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, Investment B shares, or Investment C shares
through Fifth Third Securities, Inc. or the financial shares 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 first 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
during any period when (a) trading on the NYSE is restricted by applicable rules
and regulations of the SEC, (b) the NYSE is closed for other then customary
weekend and holiday closings, (c) the SEC has by order permitted such
suspension, or (d) an emergency exists as determined by the SEC. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send your request by regular
mail to: Fifth Third Funds, P.O. Box 182706, Columbus, Ohio 43218-2700, or by
express mail to: Fifth Third Funds, c/o BISYS Fund Services, 3435 Stelzer Road,
Columbus, Ohio 43219-3035.
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
Shares may be redeemed in any amount less than $50,000 by telephone.
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<PAGE>
Call 1-800-282-5706 with instructions as to how you wish
to receive your funds (mail, wire). The Funds make every
effort to insure that 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 182706
Columbus, OH 43218-2706
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<PAGE>
Shareholder Information
By overnight service
1.Write a letter of instruction indicating:
. 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
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219-3035
By wire transfer
(Option available only if previously set up on account.)
Call 1-800-282-5706 to request a wire transfer.
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 Withdrawal Plan
To activate this feature call 1-800-282-5706.
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
[CONFIRM]
. 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
64
<PAGE>
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.
65
<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
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<PAGE>
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
182706, Columbus, OH 43218-2706, 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 182706, Columbus, Ohio 43218-2706.
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.
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<PAGE>
Shareholder Information
Distribution Arrangements/ Sales Charges
This section describes the sales charges and fees you
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 Investment B Investment C
<S> <C> <C> <C>
Sales Charge (Load) Front-end sales charge No front-end sales charge. No front-end sales
(not applicable to A contingent deferred sales charge. A contingent
money market funds); charge (CDSC) will be deferred sales charge
reduced sales charges imposed on shares redeemed (CDSC) will be
available. within 6 years after imposed on shares
purchase; redeemed within 12
months after purchase;
Distribution/Service Subject to annual Subject to annual Subject to annual
(12b-1) Fee distribution and distribution and distribution fees of up to 0.75% of
shareholder servicing shareholder servicing the Fund's assets.
fees of up to 0.25% of fees of up to 1.00% of the
the Fund's assets. Fund's assets.
Fund Expenses Lower annual expenses [Higher annual expenses Higher annual
than Investment C than Investment A shares.] expenses than
shares. Investment A shares.
Conversion None Converts to Investment A None
shares after 8 years.
</TABLE>
Calculation of Sales Charges
Investment A Shares
Investment A shares are sold at their public
offering 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>
Your Investment Sales Charge Sales Charge
as a % of as a % of
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>
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<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>
Your Investment Sales Charge Sales Charge
as a % of as a % of
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 Reductions
You may qualify for reduced sales charges under the 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.
Investment B Shares
Investment B shares are offered at NAV, without any up-
front sales charge. Therefore, all of the money that you
send to the Funds is used to purchase Fund shares. If you
sell your Investment B shares before the end of the sixth
year after purchase, however, you will pay a 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
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<PAGE>
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).
Investment B shares are subject to the following CDSC
schedule::
<TABLE>
<CAPTION>
Year of Redemption After Purchase % of NAV (at time of purchase or sale if lower)
deducted from proceeds
<S> <C>
During the first year 5%
During the second year 4%
During the third or fourth years 3%
During the fifth year 2%
During the sixth year 1%
During the seventh or eight years 0%
</TABLE>
Sales Charge Waivers
Investment A Shares
The following transactions qualify for waivers of sales
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.
.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.
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<PAGE>
Investment B Shares
The CDSC will be waived under certain circumstances,
including the following:
. Minimum required distributions from an IRA or other
qualifying retirement plan to a shareholder who has
attained age 70 1/2.
. Redemptions from accounts following the death or
disability of the shareholder.
. Investors who purchased through a participant directed
defined benefit plan.
. Returns of excess contributions to certain retirement
plans.
. Distributions of less than 12% of the annual account
value under the Systematic Withdrawal Plan.
. Shares issued in a plan of reorganization sponsored by
Fifth Third Bank, or shares redeemed involuntarily in a
similar situation.
Investment C Shares
Class C shares are offered at NAV, without any up-front
sales charge. Therefore, all the money you send to the
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 Privilege
If you have sold Investment A or C shares and decide to
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
12b-1 fees compensate the Distributor and other dealers
and investment representatives for services and expenses
related to the sale and distribution of the Fund's
shares and/or for providing shareholder services. In
particular, these fees help to defray the Distributor's
costs of advancing brokerage commissions to investment
representatives.
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<PAGE>
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 which the
Distributor may use for shareholder servicing and
distribution.
.Investment B shares pay a 12b-1 fee at an annual rate
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.
.Investment C shares pay a 12b-1 fee of up to 0.75% of
the average daily net assets of the applicable Fund
which the Distributor may use 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.
Please note that Investment C shares pay a non-12b-1
shareholder servicing fee of up to 0.25% of the average
daily net assets of the applicable Fund.
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.
Conversion to Investment
A Shares Investment B shares convert automatically to Investment
A shares 8 years after purchase. After conversion, the
12b-1 fees applicable to your shares are reduced from
1.00% to 0.25% of the average daily net assets.
Dealers Incentives
BISYS, the distributor of Fund shares, in its
discretion, may pay all dealers selling Investment A
shares or Investment B shares all or a portion of the
sales charges it normally retains.
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 are
higher for Investment A shares than for Investment B
shares which are higher than for Investment C shares,
because Investment A shares have lower operating
expenses than
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<PAGE>
Investment B shares which have lower
operating expenses than Investment C shares.
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 quarterly by
the Fifth Third Cardinal 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.
Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price paid).
Any gain from the sale or exchange of Fund shares will generally also be subject
to tax.
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.
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<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.
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<PAGE>
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.
75
<PAGE>
Shareholder Information
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,
---------------------------------
Per Share Data 2000 1999 1998 1997 1996
---- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 20.26 $ 19.23 $ 13.16 $ 11.79
Income from Investment Operations:
Net investment income/(loss) (0.06) 0.03 0.08 0.12
Net realized and unrealized gains/(losses) from
investments 5.06 2.49 6.75 1.37
Total from Investment Operations 5.00 2.52 6.83 1.49
Distributions to shareholders from:
Net investment income -- (0.03) (0.09) (0.12)
Net realized gains on vestments (1.95) (1.46) (0.67) --
Total Distributions (1.95) (1.49) (0.76) (0.12)
Net Asset Value, End of Period $ 23.31 $ 20.26 $ 19.23 $ 13.16
Total Return (excludes sales charge) 26.48% 14.12% 54.02% 12.69%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.21% 1.00% 1.00% 0.99%
Net investment income/(loss) (0.29%) 0.10% 0.45% 0.98%
Expense waiver/reimbursement(b) 0.08% 0.37% 0.36% 0.03%
Supplemental data:
Net Assets at end of period (000s) $116,963 $520,068 $399,683 $134,469
Portfolio turnover(c) 34% 45% 37% 37%
</TABLE>
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<PAGE>
Fifth Third Quality Growth Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
Per Share Data 2000
----
<S> <C>
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
77
<PAGE>
Financial Highlights
Fifth Third Quality Growth Fund
Investment C Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31,
--------
1996*
-------
Per Share Data 2000 1999 1998 1997
---- ------- ------- -------
<S> <C> <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)
Ratios/Supplemental Data
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.
78
<PAGE>
Financial Highlights
Fifth Third Equity Income Fund
Investment A Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
--------
Year Ended July 31, 1997*
------------------- -------
Per Share Data 2000 1999 1998
---- ------- --------
<S> <C> <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)
Ratios/Supplemental Data
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>
79
<PAGE>
Fifth Third Equity Income
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
Per Share Data 2000
----
<S> <C>
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
80
<PAGE>
Financial Highlights
Fifth Third Equity Income Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
------------
Year Ended July 31, July 31,
------------------- --------
1997*
-----
Per Share Data 2000 1999 1998
---- ------ ------
<S> <C> <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)
Ratios/Supplemental Data
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.
81
<PAGE>
Financial Highlights
Fifth Third Technology Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended
----------
July 31, 2000
-------------
<S> <C>
Per Share Data
Net Asset Value, Beginning of Period $
Income from Investment Operations:
Net investment income
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
In excess of net investment income
Net realized gains
Total Distributions
Net Asset Value, End of Period $
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(c)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(d)
</TABLE>
82
<PAGE>
Fifth Third Technology Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
Per Share Data 2000
----
<S> <C>
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
83
<PAGE>
Financial Highlights
Fifth Third Technology Fund
Investment C Shares
<TABLE>
<CAPTION>
Year Ended
----------
July 31, 2000
-------------
<S> <C>
Per Share Data
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income
Net realized and unrealized gains/(losses) from investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
In excess of net investment income
Net realized gains
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(c)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(d)
</TABLE>
84
<PAGE>
Financial Highlights
Fifth Third Pinnacle Fund*
Investment A Shares
<TABLE>
<CAPTION>
Year Ended Year ended Period ended Year Ended
---------- ---------- ------------ ----------
July 31, July 31, July 31, December 31,
------- ------- ------- -------------------
2000 1999 1998** 1997 1996
---- ---- ------ -------- --------
Per Share Data
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 32.35 $ 27.71 $ 23.96 $ 22.47
Income from Investment Operations:
Net investment income/(loss) (0.09) (0.02) 0.13 0.05
Net realized and unrealized gain from
investments 5.57 5.13 8.25 5.04
Total from Investment Operations 5.48 5.11 8.38 5.09
Distributions to shareholders from:
Net investment income -- -- (0.13) (0.05)
Net realized gain on investments (0.63) (0.47) (4.50) (3.55)
Total Distributions (0.63) (0.47) (4.63) (3.60)
Net Asset Value, End of Period $ 37.20 $ 32.35 $ 27.71 $ 23.96
Total Return (excludes sales charge) 17.18% 18.58% (a) 35.40% 22.50%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.41% 1.28% (b) 1.12% 1.16%
Net investment income/(loss) (0.47%) (0.12%)(b) 0.46% 0.18%
Expense waiver/reimbursement(c) 0.02% 0.30% (b) 0.00% 0.00%
Supplemental data:
Net Assets at end of period (000s) $49,936 $35,549 $22,272 $16,461
Portfolio turnover(d) 51% 38% 50% 44%
</TABLE>
85
<PAGE>
Fifth Third Pinnacle Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
<S> <C>
Per Share Data 2000
----
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
86
<PAGE>
Financial Highlights
Fifth Third Pinnacle Fund*
Investment C Shares
<TABLE>
<CAPTION>
Year ended Year ended Period ended
-------------- -------------- ------------------
July 31, July 31, July 31,
Per Share Data -------------- -------------- ------------------
2000 1999 1998***
---- ---- -------
<S> <C> <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 5.50 2.16
investments
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)
Ratios/Supplemental Data
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.
87
<PAGE>
Financial Highlights
Fifth Third Balanced Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
---------------------------------------
Per Share Data 2000 1999 1998 1997 1996
-------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 14.99 $ 15.33 $ 11.75 $ 11.28
Income from Investment Operations:
Net investment income 0.20 0.27 0.27 0.27
Net realized and unrealized from investments 1.86 0.92 4.06 0.47
Total from Investment Operations 2.06 1.19 4.33 0.74
Distributions to shareholders from:
Net investment income (0.19) (0.28) (0.26) (0.27)
Net realized gain on investments (0.74) (1.25) (0.49) --
Total Distributions (0.93) (1.53) (0.75) (0.27)
Net Asset Value, End of Period $ 16.12 $ 14.99 $ 15.33 $ 11.75
Total Return (excludes sales charge) 14.30% 8.41% 38.45% 6.52%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.28% 1.00% 1.00% 1.00%
Net investment income/(loss) 1.22% 1.84% 2.05% 2.31%
Expense waiver/reimbursement(b) 0.06% 0.43% 0.40% 0.06%
Supplemental data:
Net Assets at end of period (000s) $79,686 $173,177 $122,765 $92,808
Portfolio turnover(c) 128% 135% 101% 61%
</TABLE>
88
<PAGE>
Fifth Third Balanced Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
<S> <C>
Per Share Data 2000
----
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
89
<PAGE>
Financial Highlights
Fifth Third Balanced Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
--------
Year ended July 31, 1996*
------------------------ -----
Per Share Data 2000 1999 1998 1997
------ ------ ------ ------ <C>
<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)
Ratios/Supplemental Data
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.
90
<PAGE>
Financial Highlights
Fifth Third Mid Cap Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
---------------------------------
Per Share Data 2000 1999 1998 1997 1996
------ -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 16.19 $ 16.98 $ 12.60 $ 12.59
Income from Investment Operations:
Net investment income/(loss) (0.10) (0.03) 0.02 0.06
Net realized and unrealized gains/(losses) from investments 1.17 0.98 5.55 0.11
Total from Investment Operations 1.07 0.95 5.57 0.17
Distributions to shareholders from:
Net investment income -- -- (0.02) (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)
Net Asset Value, End of Period $ 15.82 $ 16.19 $ 16.98 $ 12.60
Total Return (excludes sales charge) 7.29% 5.69% 47.17% 1.27%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.28% 1.01% 1.00% 1.00%
Net investment income/(loss) (0.59%) (0.19%) 0.10% 0.42%
Expense waiver/reimbursement(b) 0.11% 0.40% 0.37% 0.06%
Supplemental data:
Net Assets at end of period (000s) $27,966 $217,547 $186,066 $72,663
Portfolio turnover(c) 49% 44% 52% 54%
</TABLE>
91
<PAGE>
Fifth Third Mid Cap Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
<S> <C>
Per Share Data 2000
----
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
92
<PAGE>
Financial Highlights
Fifth Third Mid Cap Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
-------
Year ended July 31, 1996*
------------------- -----
Per Share Data 2000 1999 1998 1997
------ ------ ------ ------
<S> <C> <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)
Ratios/Supplemental Data
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.
93
<PAGE>
Financial Highlights
Fifth Third International Equity Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
------------------------------
Per Share Data 2000 1999 1998 1997 1996
------ ------ -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.56 $ 12.05 $ 10.74 $ 9.83
Income from Investment Operations
Net investment income/(loss) 0.03 0.09 0.04 0.01
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations 0.52 1.40 2.19 0.91
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
Total Return (excludes sales charge) 4.23% 13.29% 21.78% 9.26%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.52% 1.47% 1.38% 1.61%
Net investment income/(loss) 0.03% 0.66% 0.39% 0.32%
Expense waiver/reimbursement(c) 0.18% 0.35% 0.35% 0.05%
Supplemental data:
Net Assets at end of period (000s) $5,821 $163,297 $151,728 $120,349
Portfolio turnover(d) 42% 39% 60% 41%
</TABLE>
94
<PAGE>
Fifth Third International Equity Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
------------
July 31, 2000
-------------
<S> <C>
Per Share Data 2000
----
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
95
<PAGE>
Financial Highlights
Fifth Third International Equity Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
--------
Year ended July 31, 1996*
---------------------- -----
Per Share Data 2000 1999 1998 1997
------ ------ ------ ------
<S> <C> <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)
Ratios/Supplemental Data
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 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.
96
<PAGE>
Financial Highlights
Fifth Third Bond Fund For Income
Investment A Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
--------
Year ended July 31, 1997*
------------------------------ -----
Per Share Data 2000 1999 1998
-------- -------- --------
<S> <C> <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)
Ratios/Supplemental Data
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>
97
<PAGE>
Financial Highlights
Fifth Third Bond Fund For Income
Investment C Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
--------
Year ended July 31, 1997*
-------------------------------- -----
Per Share Data 2000 1999 1998**
-------- -------- --------
<S> <C> <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)
Ratios/Supplemental Data
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.
98
<PAGE>
Financial Highlights
Fifth Third Quality Bond Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
------------------------------------------------------
Per Share Data 2000 1999 1998 1997 1996
------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.96 $ 9.85 $ 9.52 $ 9.72
Investment Operations
Net investment income/(loss) 0.65 0.54 0.55 0.56
Net realized and unrealized gains/(losses) from investments (0.51) 0.12 0.32 (0.19)
Total from Investment Operations 0.14 0.66 0.87 0.37
Distributions to shareholders from:
Net investment income (0.47) (0.55) (0.54) (0.57)
In excess of net investment income -- -- -- --
Net realized gains (0.11) -- -- --
Total Distributions (0.58) (0.55) (0.54) (0.57)
Net Asset Value, End of Period $ 9.52 $ 9.96 $ 9.85 $ 9.52
Total Return (excludes sales charge) 1.26% 6.91% 9.43% 3.86%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 0.92% 0.75% 0.75% 0.75%
Net investment income/(loss) 4.85% 5.50% 5.71% 5.80%
Expense waiver/reimbursement(b) 0.17% 0.45% 0.41% 0.06%
Supplemental data:
Net Assets at end of period (000s) $ 9,826 $107,794 $91,789 $83,422
Portfolio turnover(c) 349% 279% 181% 117%
</TABLE>
99
<PAGE>
Fifth Third Quality Bond Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
-------------
July 31, 2000
-------------
Per Share Data 2000
----
<S> <C>
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
100
<PAGE>
Financial Highlights
Fifth Third Quality Bond Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
--------
Year ended July 31, 1996*
----------------------------------------- -----
Per Share Data 2000 1999 1998 1997
-------- -------- -------- --------
<S> <C> <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)
Ratios/Supplemental Data
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.
101
<PAGE>
Financial Highlights
Fifth Third U.S. Government Securities Fund
Investment A Shares
<TABLE>
<CAPTION>
Year ended July 31,
------------------------------------------------------
Per Share Data 2000 1999 1998 1997 1996
------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.82 $ 9.75 $ 9.55 $ 9.77
Income from Investment Operations:
Net investment income/(loss) 0.55 0.52 0.54 0.55
Net realized and unrealized gains/(losses) from investments (0.26) 0.07 0.19 (0.20)
Total from Investment Operations 0.29 0.59 0.73 0.35
Distributions to shareholders from:
Net investment income (0.47) (0.52) (0.53) (0.57)
Total Distributions (0.47) (0.52) (0.53) (0.57)
Net Asset Value, End of Period $ 9.64 $ 9.82 $ 9.75 $ 9.55
Total Return (excludes sales charge) 2.89% 6.17% 7.83% 3.63%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 0.95% 0.75% 0.75% 0.75%
Net investment income/(loss) 4.62% 5.30% 5.56% 5.67%
Expense waiver/reimbursement(b) 0.33% 0.53% 0.50% 0.29%
Supplemental data:
Net Assets at end of period (000s) $5,192 $41,550 $42,414 $30,754
Portfolio turnover(c) 93% 155% 169% 103%
</TABLE>
102
<PAGE>
Financial Highlights
Fifth Third U.S. Government Securities Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
-------------
Per Share Data July 31,
-------------
Year Ended July 31, 1996*
----------------------------------------- -------------
2000 1999 1998 1997
----- ------ ------- ------
<S> <C> <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)
Ratios/Supplemental Data
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.
103
<PAGE>
Financial Highlights
Fifth Third Municipal Bond Fund
Investment A Shares
<TABLE>
<CAPTION>
Period ended
------------
July 31,
Per Share Data ------------
Year ended July 31, 1997*
------------------------------ ------------
2000 1999 1998
---- ---- ----
<S> <C> <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)
Ratios/Supplemental Data
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>
104
<PAGE>
Financial Highlights
Fifth Third Municipal Bond Fund
Investment C Shares
<TABLE>
<CAPTION>
Year ended Year ended
---------- ----------
July 31, July 31,
Per Share Data -------- --------
2000 1999*** Period ended July 31,
---- ------- ---------------------
1998** 1997*
------- ---------
<S> <C> <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)
Ratios/Supplemental Data
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 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 Municipal 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.
105
<PAGE>
Financial Highlights
Fifth Third Ohio Tax Free Bond Fund
Investment A Shares
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------------
Per Share Data 2000 1999 1998 1997 1996
---- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.29 $ 10.31 $ 10.01 $ 9.99
Income from Investment Operations
Net investment income 0.46 0.42 0.43 0.40
Net realized and unrealized gains/(losses) from investments (0.29) 0.02 0.30 0.03
Total from Investment Operations 0.17 0.44 0.73 0.43
Distributions to shareholders from:
Net investment income (0.38) (0.42) (0.43) (0.41)
In excess of net investment income -- -- -- --
Net realized gains (0.06) (0.04) -- --
Total Distributions (0.44) (0.46) (0.43) (0.41)
Net Asset Value, End of Period $ 10.02 $ 10.29 $ 10.31 $ 10.01
Total Return (excludes sales charge) 1.63% 4.38% 7.49% 4.33%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 1.00% 0.74% 0.75% 0.74%
Net investment income/(loss) 3.68% 4.09% 4.27% 4.01%
Expense waiver/reimbursement(b) 0.21% 0.43% 0.37% 0.32%
Supplemental data:
Net Assets at end of period (000s) $22,008 $188,966 $168,800 $35,463
Portfolio turnover(c) 47% 42% 49% 30%
</TABLE>
106
<PAGE>
Fifth Third Ohio Tax-Free Bond Fund
Investment B Shares
<TABLE>
<CAPTION>
Period Ended
-------------
July 31, 2000
-------------
Per Share Data 2000
----
<S> <C>
Net Asset Value, Beginning of Period
Income from Investment Operations:
Net investment income/(loss)
Net realized and unrealized gains/(losses) from
investments
Total from Investment Operations
Distributions to shareholders from:
Net investment income
Net realized gains on vestments
Total Distributions
Net Asset Value, End of Period
Total Return (excludes sales charge)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses
Net investment income/(loss)
Expense waiver/reimbursement(b)
Supplemental data:
Net Assets at end of period (000s)
Portfolio turnover(c)
</TABLE>
107
<PAGE>
Financial Highlights
Fifth Third Ohio Tax Free Bond Fund
Investment C Shares
<TABLE>
<CAPTION>
Period ended
----------------
July 31,
Per Share Data --------
Year Ended July 31, 1996*
------------------------------------ -----
2000 1999 1998 1997
---- ------ ------ -----
<S> <C> <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)
Ratios/Supplemental Data
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.
108
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds Table of Contents
<S> <C>
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
</TABLE>
<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 Dean Witter Investment Management Inc. ("MSDW")
acts as investment subadvisor to Fifth Third International Equity 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.
2
<PAGE>
Fifth Third Quality Growth Fund LOGO
Fundamental Objective
Growth of capital. Income is a secondary objective.
Principal Investment
Strategies
Under normal market conditions, the Fund invests at
least 65% of total assets in common stocks of high
quality 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 Investment
Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund include
the 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.
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
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.
3
<PAGE>
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 Institutional Shares*
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
1999 [_]
The bar chart above does not
reflect the impact of any
applicable sales charges or account
fees, which would reduce returns.
<TABLE>
<S> <C>
Best quarter: Q[_] [_] [_]%
Worst quarter: Q[_] [_] [_]%
Year to Date Return (1/1/00 to 9/30/00) [_]%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/83 [_]% [_]% [_]% [_]%
(Since 12/31/82)
S&P 500(R) Index [_]% [_]% [_]% [_]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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 Objective
High level of current income consistent with capital
appreciation.
Principal Investment
Strategies
Under normal market conditions, the Fund invests at
least 65% of total assets in common stocks of U.S.
companies with a weighted average market value similar
to that of the Standard & Poor's 500 Composite Stock
Price Index focusing on stocks that pay an increasing
dividend.
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 corporate bonds, which at the time of investment,
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.
Principal Investment
Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund include
the 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.
Significant investment in large companies also creates
various risks for the Fund. For instance, larger, more
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 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.
6
<PAGE>
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.
7
<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 Institutional Shares*
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
1999 [_]
The bar chart above does not
reflect the impact of any
applicable sales charges or account
fees, which would reduce returns.
<TABLE>
<S> <C>
Best quarter: Q[_] [_] [_]%
Worst quarter: Q[_] [_] [_]%
Year to Date Return (1/1/00 to 9/30/00) [_]%
</TABLE>
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/83 [_]% [_]% [_]% [_]%
(Since 12/31/82)
S&P 500(R) Index [_]% [_]% [_]% [_]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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.
8
<PAGE>
Fifth Third Technology Fund LOGO
Fundamental Objective
Long-term capital appreciation
Principal Investment Strategies
Under normal market conditions, the Fund invests at
least 65% of total assets in the equity securities of
U.S. and, to a lesser extent, foreign technology
companies.
Technology companies are those that are engaged in
developing products, processes or services that provide
technological advances. Those companies may be in any
of a variety of industries, such as computer hardware,
software, electronic components and systems,
telecommunications, Internet, and media and information
services companies. They also may include companies in
more traditional industries, such as certain securities
brokers and consumer products retailers that have
extensively used technological advances to develop new
or to improve products or processes.
The Fund generally takes a growth approach to selecting
stocks, looking for established companies that appear
poised to grow because of new products, technology or
management, as well as new companies that are in the
developmental stage. Factors in identifying these
companies may include the quality of management,
financial strength, a strong position relative to
competitors and a stock price that appears reasonable
relative to its expected growth rate. The Fund may
invest in companies of any size, including small, high
growth companies. The Fund also may invest in companies
whose shares are being, or recently have been, offered
to the public for the first time.
The Fund reserves the right to invest up to 35% of
total assets in other securities, such as, corporate
bonds and government securities.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund include
the risks of investing in equity securities, such as
the risk of sudden and unpredictable drops in value or
periods of lackluster performance.
The Fund, by concentrating in technology stocks,
assumes the risks of holding technology stocks. For
example, technology stocks tend to:
. fluctuate in price more widely and rapidly than the
market as a whole
. underperform other types of stocks or be difficult
to sell when the economy is not robust, during
market downturns, or when technology stocks are out
of favor
. decline in price due to sector specific
developments
9
<PAGE>
. be more vulnerable than most stocks to the
obsolescence of existing technology, expired
patents, short product cycles, price competition,
market saturation and new market entrants.
To the extent that the Fund invests in mid cap and
small cap stocks, it takes on additional risks. For
instance, mid cap and small cap stocks tend to be less
liquid and more volatile than large cap stocks. Smaller
companies tend to be unseasoned issuers with new
products and less experienced management.
The prices of most growth stocks are based on future
expectations. As a result, those stocks tend to be more
sensitive than value stocks to negative earnings
surprises and changes in internal growth rates. Growth
stocks in particular may underperform during periods
when the market favors value stocks. The Fund's
performance may also suffer if certain stocks do not
perform as the portfolio management team expected.
Through active trading, the fund may have a high
portfolio turnover rate, which can mean higher taxable
distributions and lower performance due to increased
brokerage costs.
10
<PAGE>
Fifth Third Technology Fund LOGO
Volatility and Performance Information
This section would normally include a bar chart and a table showing how the
Technology Fund has performed and how its performance has varied from year to
year. Because the Fund has not been in operation for a full calendar year, the
bar chart and table are not shown.
11
<PAGE>
Fifth Third Pinnacle Fund LOGO
Fundamental Objective
Long-term capital appreciation.
Principal Investment
Strategies
Under normal market conditions, the Fund invests at
least 65% of total assets in common stocks and
convertible 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 Investment
Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund include
the risks of investing in equity securities, such as
the risk of sudden and unpredictable drops in value or
periods of lackluster performance.
Generally, growth oriented stocks may be sensitive to
market movements. The prices of growth stocks tend to
reflect future expectations, and when those
expectations are not met, prices generally fall.
Significant investment in large companies also creates
various risks for the Fund. For instance, larger, more
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.
12
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ][ ] [ ]%
Worst quarter: Q[ ][ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 3/4/85 [ ]% [ ]% [ ]% [ ]%
(Since 2/28/85)
S&P 500(R) Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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 Balanced Fund LOGO
Fundamental Objective
Capital appreciation and income.
Principal Investment Strategies
Under normal market conditions, the Fund
uses an asset allocation strategy, investing
in three primary categories of securities:
stocks, bonds and money market instruments.
The Fund intends to invest between 50% to
75% of total assets in common stocks and
convertible preferred stocks and convertible
corporate bonds, 25% to 40% of total assets
in U.S. Treasury bills, notes and bonds,
securities of U.S. Government agencies and
instrumentalities and corporate debt
securities, including mortgage-backed
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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund
include the risks associated with following
an asset allocation 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.
To the extent the Fund invests in stocks and
convertible securities, it assumes the risks
of equity investing, including sudden and
unpredictable drops in value and periods of
lackluster performance.
Significant investments in large companies
also creates various risks for the
14
<PAGE>
Fund. For instance, larger, more 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.
15
<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.
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 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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ][ ] [ ]%
Worst quarter: Q[ ][ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/83 [ ]% [ ]% [ ]% [ ]%
(Since 12/31/82)
S&P 500(R) Index [ ]% [ ]% [ ]% [ ]%
(Since 1/1/83)
LBAB Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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.
16
<PAGE>
Fifth Third Mid Cap Fund LOGO
Fundamental Objective
Growth of Capital. Income is a secondary
objective.
Principal Investment Strategies
Under normal market conditions, the Fund
expects to invest at least 65% of total
assets in common stocks of mid cap
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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the
Fund include the risks of investing in
equity securities, such as the risk of
sudden and unpredictable drops in value
or periods of lackluster performance.
Stocks of medium-sized companies can be
more sensitive to long market declines
than larger companies, in part because
they generally do not have the financial
resources that larger companies have.
Generally, growth oriented stocks are
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 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.
17
<PAGE>
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.
18
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/85 [ ]% [ ]% [ ]% [ ]%
(Since 12/31/84)
S&P Mid Cap 400(R) Index [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted
performance of the Fund for the period prior to 8/11/98 reflects the
performance 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 International Equity Fund LOGO
Fundamental Objective
Long-term capital appreciation.
Principal Investment Strategies
Under normal market conditions, the Fund invests at least
65% of total assets in equity securities of non-U.S.
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 strategy of selecting securities
in its portfolio. It allocates assets among geographic
regions and individual countries and sectors, rather than
emphasizing individual stock selection. The Fund
capitalizes on the significance of country and sector
selection in international equity portfolio returns by
over and underweighting countries and/or sectors based on
three factors: (i) valuation, (ii) fundamental change,
and (iii) market momentum/technicals.
The Fund's investment subadvisor analyzes both the global
economic environment and the economies of countries
throughout the world, focusing mainly on the
industrialized countries comprising the MSCI EAFE Index.
Although the Fund invests primarily in established foreign
securities markets, from time to time, it may also invest
in emerging market countries and, with regard to such
investments, may make global and regional allocations to
emerging markets, as well as allocations to specific
emerging market countries. 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) by investing
in "baskets" of common stocks and other equity
securities.
The Fund reserves the right to invest up to 35% of total
assets in other securities, such as equity securities of
U.S. companies.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
The principal risks of investing in the Fund include the
risks of investing in equity securities, such as, the risk
of sudden and unpredictable drops in value or periods of
lackluster performance.
Stocks of foreign companies present additional risks for
U.S. investors. Stocks of foreign companies tend to
be less liquid and more volatile than their U.S.
counterparts, in part because accounting standards and
market regulations tend to be less standardized and
economic and political climates less stable. Fluctuations
in exchange rates also may reduce or eliminate gains or
create losses. These risks usually are higher in emerging
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.
20
<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 of common
stocks in Europe, Australasia, and the Far East.
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*
1995 11.29
1996 8.54
1997 7.96
1998 19.34
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 8/18/94 [ ]% N/A N/A [ ]%
(Since 8/31/94)
EAFE Index [ ]% N/A N/A [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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 Bond Fund For Income LOGO
Fundamental Objective
High level of current income.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in the
following types of investment grade
securities: corporate securities, mortgage-
backed securities, securities of the U.S.
Treasury and U.S. Government agencies and
instrumentalities, and Yankee bonds.
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 money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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.
22
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/83 [ ]% [ ]% [ ]% [ ]%
(Since 1/1/83)
LBIGC [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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 Quality Bond Fund LOGO
Fundamental Objective
High current income. Capital growth is a
secondary objective.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in U.S.
Treasury bills, notes and 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 a bond fund
investing in lower quality securities. 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 money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other bank
and is not insured or guaranteed by the FDIC or any other government agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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
24
<PAGE>
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.
25
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/83 [ ]% [ ]% [ ]% [ ]%
(Since 1/1/83)
LBAB [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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.
26
<PAGE>
Fifth Third U.S. Government Securities Fund LOGO
Fundamental Objective
High level of current income. Capital growth
is a secondary objective.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 65% of total assets in U.S.
government securities. At the 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 and interest by the full faith and
credit of the U.S. government and obligations
issued by the agencies or instrumentalities
of the U.S. government but not supported by
such full faith and credit. 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 debt obligations
of the U.S. government and are backed by the
full faith and credit of the U.S. government.
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 money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other
bank and is not insured or guaranteed by the FDIC or any other government
agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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.
27
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/86 [ ]% [ ]% [ ]% [ ]%
(Since 1/1/86)
LBIGBI [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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.
28
<PAGE>
Fifth Third Municipal Bond Fund LOGO
Fundamental Objective
High level of current income that is exempt
from federal regular income taxes.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 80% of total assets in
municipal securities, which pay 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
20% of total assets in other securities, such
as money market instruments.
Principal Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other
bank and is not insured or guaranteed by the FDIC or any other government
agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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 Fund's performance may be affected by
political and economic factors at the state,
regional or national level. Those factors may
include budgetary
29
<PAGE>
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.
30
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/83 [ ]% [ ]% [ ]% [ ]%
(Since 12/31/82)
LBMBI [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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.
31
<PAGE>
Fifth Third Ohio Tax Free Bond Fund LOGO
Fundamental Objective
Current income exempt from federal income tax
and the personal income taxes imposed by the
State of Ohio and Ohio municipalities.
Principal Investment Strategies
Under normal market conditions, the Fund
invests at least 80% of net assets in
municipal securities which pay 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 Investment Risks
An investment in the Fund is not a deposit of Fifth Third Bank or any other
bank and is not insured or guaranteed by the FDIC or any other government
agency.
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.
Generally, the price of a bond moves in the
opposite direction from interest rates. New
bonds issued after a rise in rates offer
higher yields to investors. An existing bond
with a lower yield can appear attractive to
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 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
32
<PAGE>
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.
33
<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 Institutional Shares*
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
1999 [ ]
The bar chart above does not reflect the
impact of any applicable sales charges or
account fees, which would reduce returns.
Best quarter: Q[ ] [ ] [ ]%
Worst quarter: Q[ ] [ ] [ ]%
Year to Date Return (1/1/00 to 9/30/00) [ ]%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception Date Past Year Past 5 Years Past 10 Years Since Inception
<S> <C> <C> <C> <C> <C>
Institutional Shares* 1/1/87 [ ]% [ ]% [ ]% [ ]%
(Since 12/31/86)
LBMBI [ ]% [ ]% [ ]% [ ]%
</TABLE>
* The Fund first offered Institutional shares on 8/11/98. The quoted performance
of the Fund for the period prior to 8/11/98 reflects the performance 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.
34
<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, 2000.
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 Technology Pinnacle Balanced Mid Cap Equity
Fund Fund Fund 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% 1.00% 0.80% 0.80% 0.80% 1.00%
Distribution (12b-1) fees None None None None None None None
Other expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Total Annual Fund [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
Operating Expenses
Fee Waivers/1/
Net Total Annual Fund Operating Expenses [ ]% [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
</TABLE>
/1/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001.
35
<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 [ ]% [ ]% [ ]% [ ]% [ ]%
Total Annual Fund Operating Expenses [ ]% [ ]% [ ]% [ ]% [ ]%
Fee Waivers/1/
[ ]% [ ]% [ ]% [ ]% [ ]%
Net Total Annual Fund Operating Expenses
</TABLE>
/1/ Fifth Third Bank and/or BISYS have contractually agreed to waive fees and/or
reimburse expenses through November 30, 2001.
36
<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>
<S> <C> <C> <C> <C>
1 3 5 10
Fifth Third Quality Growth Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third Equity Income Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3
Fifth Third Technology Fund Year Years
Institutional Shares $[ ] $[ ]
1 3 5 10
Fifth Third Pinnacle Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third Balanced Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third Mid Cap Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
</TABLE>
37
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
1 3 5 10
Fifth Third International Equity Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
</TABLE>
Bond Funds
<TABLE>
<S> <C> <C> <C> <C>
1 3 5 10
Fifth Third Bond Fund For Income Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third Quality Bond Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third U.S. Government Securities Year Years Years Years
Fund
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third Municipal Bond Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
1 3 5 10
Fifth Third Ohio Tax Free Bond Fund Year Years Years Years
Institutional Shares $[ ] $[ ] $[ ] $[ ]
</TABLE>
38
<PAGE>
Additional Information About the Funds' Investments
Investment Practices
--------------------
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. The following
table describes the securities and techniques the Funds use, as well as the main
risks they pose. Equity securities are subject mainly to market risk. Fixed
income securities are primarily influenced by market, credit and prepayment
risks, although certain securities may be subject to additional risks. Following
the table is a more complete discussion of risk. You may also consult the
Statement of Additional Information for additional details regarding these and
other permissible investments.
<TABLE>
<CAPTION>
FUND NAME FUND CODE
--------- ---------
<S> <C>
Quality Growth Fund 1
Equity Income Fund 2
Technology Fund 3
Pinnacle Fund 4
Balanced Fund 5
Mid Cap Fund 6
International Equity Fund 7
Bond Fund for Income 8
Quality Bond Fund 9
U.S. Government Securities Fund 10
Municipal Bond Fund 11
Ohio Tax Free Bond Fund 12
</TABLE>
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
---------- ---------- ---------
<S> <C> <C>
American Depository Receipts (ADRs): ADRs are 1, 3-7 Market
foreign shares of a company held by a U.S. bank Political
that issues a receipt evidencing ownership. Foreign Investment
Asset-Backed Securities: Securities secured by 1, 5, 6, 8, 9 Pre-payment
company receivables, home equity loans, truck and Market
auto loans, leases, credit card receivables and Credit
other securities backed by other types of Interest Rate
receivables or other assets. Regulatory
Liquidity
Bankers' Acceptances: Bills of exchange or time 1-3, 5, 6, 8, 9, 11 Credit
drafts drawn on and accepted by a commercial Liquidity
bank. Maturities are generally six months or Market
less. Interest Rate
Bonds: Interest-bearing or discounted securities
that obligate the issuer to pay the bondholder a Market
specified sum of money, usually at specific Credit
intervals, and to repay the principal amount of Interest Rate
the loan at maturity.
Corporate: 1-11
Government: 1, 2, 4-11
</TABLE>
39
<PAGE>
<TABLE>
<S> <C> <C>
1-10
Call and Put Options: A call option gives the Management
buyer the right to buy, and obligates the seller Liquidity
of the option to sell, a security at a specified Credit
price. A put option gives the buyer the right to Market
sell, and obligates the seller of the option to Leverage
buy a security at a specified price.
Certificates of Deposit: Negotiable instruments 1-3, 5, 6, 8, 9, 10, 11 Market
with a stated maturity. Credit
Liquidity
Interest Rate
Collateralized Mortgage Obligations: 5, 8-10 Pre-Payment/Call
Mortgage-backed bonds that separate mortgage Interest Rate
pools into different maturity classes.
Commercial Paper: Secured and unsecured short-term 1, 3,-6, 8, 9, 11, 12 Credit
promissory notes issued by corporations and other Liquidity
entities. Maturities generally vary from a few Market
days to nine months. Interest Rate
Common Stock: Shares of ownership of a company. 1-7 Market
Convertible Securities: Bonds or preferred stock 1-7 Market
that convert to common stock. Credit
Derivatives: Instruments whose value is derived 1-12 Management
from an underlying contract, index or security, Market
or any combination thereof, including futures, Credit
options (e.g., put and calls), options on Liquidity
futures, swap agreements, and some Leverage
mortgage-backed securities. Interest Rate
Foreign Currency Transactions: Foreign currency 7 Foreign Investment
transactions include forward foreign currency Market
exchange contracts, foreign currency options, and Political
foreign currency futures transactions.
Foreign Securities: Stocks issued by foreign 1-3, 5-9, 11 Market
companies, as well as commercial paper of foreign Political
issuers and obligations of foreign banks, Liquidity
overseas branches of U.S. banks and supranational Foreign Investment
entities.
Futures and Related Options: A contract providing 1-12 Management
for the future sale and purchase of a specified Market
amount of a specified security, class of Credit
securities, or an index at a specified time in Liquidity
the future and at a specified price. Leverage
</TABLE>
40
<PAGE>
<TABLE>
<S> <C> <C>
High-Yield/High-Risk/Debt Securities: High-yield/ 8-11 Credit
high-risk/debt securities are securities that are Market
rated below investment grade by the primary Liquidity
rating agencies (e.g., BB or lower by Standard & Interest Rate
Poor's and Ba or lower by Moody's). These
securities are considered speculative and involve
greater risk of loss than investment grade debt
securities. Other terms commonly used to
describe such securities include "lower rated
bonds," "non-investment grade bonds" and "junk
bonds."
Illiquid Securities: Securities which may be 1-12 Liquidity
difficult to sell at an acceptable price. Market
Investment Company Securities: Shares of 1, 5-12 Market
investment companies. These investment
companies may include money market funds of Fifth
Third Funds and shares of other registered
investment companies for which the Adviser to a
Fund or any of their affiliates serves as
investment adviser, administrator or distributor.
Investment Grade Bonds: Interest-bearing or 1, 6, 8, 9, 11, 12 Market
discounted government or corporate securities Credit
that obligate the issuer to pay the bondholder a
specified sum of money, usually at specific
intervals, and to repay the principal amount of
the loan at maturity. Investment grade bonds are
those rated BBB or better by S&P or Baa or better
by Moody's or similarly rated by other nationally
recognized statistical rating organizations, or,
if not rated, determined to be of comparable
quality by the Adviser.
Money Market Instruments: Investment-grade, U.S. 1, 3-12 Market
dollar denominated debt securities that have Credit
remaining maturities of one year or less. These
securities may include U.S. government
obligations, commercial paper and other
short-term corporate obligations, repurchase
agreements collateralized with U.S. government
securities, certificates of deposit, bankers'
acceptances, and other financial institution
obligations. These securities may carry fixed or
variable interest rates.
Mortgage-Backed Securities: Debt obligations 1, 5, 6, 8-10 Pre-payment
secured by real estate loans and pools of loans. Market
These include collateralized mortgage obligations Credit
and real estate mortgage investment conduits. Regulatory
Municipal Securities: Securities issued by a state 11, 12 Market
or political subdivision to obtain funds for various Credit
public purposes. Municipal securities include (a) Political
</TABLE>
41
<PAGE>
<TABLE>
<S> <C> <C>
government ;ease certificates of participation Tax
issued by state or municipal authorities where Regulatory
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; (b) municipal notes and
tax-exempt commercial paper; (c) serial bonds; (e)
tax anticipation notes sold to finance working
capital needs of municipalities in anticipation of
receiving taxes at a later date; (f) bond anticipation
notes in anticipation of the issuance of long-
term bonds in the future; (g0 pre-refunded municipal
bonds whose timely payment of interest and
principal is ensured by an escrow of U.S.
government obligations; and (h0 general obligation
bonds.
Participation Interests: Interests in bank loans 11, 12 Interest Rate
made to corporations. Credit
Liquidity
Preferred Stocks: Preferred Stocks are equity 3, 5, 7 Market
securities that generally pay dividends at a
specified rate and have preference over common
stock in the payment of dividends and
liquidation. Preferred stock generally does not
carry voting rights.
Repurchase Agreements: The purchase of a security 1-12 Market
and the simultaneous commitment to return the Leverage
security to the seller at an agreed upon price on
an agreed upon date. This is treated as a loan.
Restricted Securities: Securities not registered 1-12 Liquidity
under the Securities Act of 1933, such as Market
privately placed commercial paper and Rule 144A
securities.
Reverse Repurchase Agreement: The sale of a 1-12 Market
security and the simultaneous commitment to buy Leverage
the security back at an agreed upon price on an
agreed upon date. This is treated as a borrowing
by a Fund.
Securities Lending: The lending of up to 33 1/3% 1-12 Market
of the Fund's total assets. In return the Fund Leverage
will receive cash, other securities, and/or Liquidity
letters of credit. Credit
Short-Term Trading: The sale of a security soon 1-12 Market
after its purchase. A portfolio engaging in such
trading will have higher turnover and transaction
expenses.
</TABLE>
42
<PAGE>
<TABLE>
<S> <C> <C>
Stock-Index Options: A security that combines 1-12 Management
features of options with securities trading using Market
composite stock indices. Credit
Time Deposits: Non-negotiable receipts issued by a 1-3, 5, 6, 8, 9, 11 Liquidity
bank in exchange for the deposit of funds. Credit
Market
U.S. Government Agency Securities: Securities 1-12 Interest Rate
issued by agencies and instrumentalities of the Credit
U.S. government. These include Ginnie Mae, Fannie
Mae, and Freddie Mac.
U.S. Treasury Obligations: Bills, notes, bonds, 1-12 Interest Rate
separately traded registered interest and
principal securities, and coupons under bank
entry safekeeping.
Variable and Floating Rate Instruments: 5, 8, 9, 11, 12 Credit
Obligations with interest rates which are reset Liquidity
daily, weekly, quarterly or some other period and Market
which may be payable to the Fund on demand.
Warrants: Securities, typically issued with 1-3, 5-7 Market
preferred stock or bonds, that give the holder Credit
the right to buy a proportionate amount of common
stock at a specified price.
When-Issued and Delayed Delivery Transactions: 1-12 Market
Purchase or contract to purchase securities at a Leverage
fixed price for delivery at a future date. Under Liquidity
normal market conditions, when-issued purchases Credit
and forward commitments will not exceed 20% of
the value of a Fund's total assets.
Yankee Bonds and Similar Debt Obligations: U.S. 7? Market
dollar denominated bonds issued by foreign Credit
corporations or governments. Sovereign bonds are Interest Rate
those issued by the government of a foreign
country. Supranational bonds are those issued by
supranational entities, such as the World Bank
and European Investment Bank. Canadian bonds are
those issued by Canadian provinces.
</TABLE>
43
<PAGE>
Investment Risks
----------------
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "Risk/Return Summary and Fund Expenses." Because of these risks,
the value of the securities held by the Funds may fluctuate, as will the value
of your investment in the Funds. Certain investments and Funds are more
susceptible to these risks than others.
Credit Risk. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade securities.
The price of a security can be adversely affected prior to actual default as its
credit status deteriorates and the probability of default rises.
Foreign Investment Risk. The risk associated with higher transaction costs,
delayed settlements, currency controls and adverse economic developments. This
also includes the risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments and may widen any losses. Exchange rate
volatility also may affect the ability of an issuer to repay U.S. dollar
denominated debt, thereby increasing credit risk. Foreign securities may also
be affected by incomplete or inaccurate financial information on companies,
social upheavals or political actions ranging from tax code changes to
governmental collapse. These risks are more significant in emerging
markets.
Interest Rate Risk. The risk that debt prices overall will decline over short
or even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of the Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon or pay-in-kind securities are generally affected to a greater extent
by interest rate changes. These securities tend to be more volatile than
securities which pay interest periodically.
Investment Style Risk. The risk that returns from a particular class or group
of stocks (e.g., value, growth, small cap, large cap) will trail returns from
other asset classes or the overall stock market. Groups or asset classes of
stocks tend to go through cycles of doing better - or worse - than common stocks
in general. These periods can last for periods as long as several years.
Additionally, a particular asset class or group of stocks could fall out of
favor with the market, causing the Fund to underperform funds that focus on
other types of stocks.
Leverage Risk. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Portfolio also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Portfolio's
hedging transactions will be effective.
Speculative. To the extent that a derivative is not used as a hedge, the
Portfolio is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivatives original cost.
Liquidity Risk. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market. The
seller may have to lower the price, sell other securities instead or forego an
investment opportunity, any of which could have a negative effect on Portfolio
management or performance. This
44
<PAGE>
includes the risk of missing out on an investment opportunity because the assets
necessary to take advantage of it are tied up in less advantageous
investments.
Management Risk. The risk that a strategy used by a Fund's portfolio manager
may fail to produce the intended result. This includes the risk that changes in
the value of a hedging instrument will not match those of the asset being
hedged. Incomplete matching can result in unanticipated risks.
Market Risk. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector
of the economy or the market as a whole. There is also the risk that the
current interest rate may not accurately reflect existing market rates. For
fixed income securities, market risk is largely, but not exclusively, influenced
by changes in interest rates. A rise in interest rates typically causes a fall
in values, while a fall in rates typically causes a rise in values. Finally,
key information about a security or market may be inaccurate or unavailable.
This is particularly relevant to investments in foreign securities.
Political Risk. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war.
Pre-Payment/Call Risk. The risk that the principal repayment of a security will
occur at an unexpected time. Prepayment risk is the chance that the repayment
of a mortgage will occur sooner than expected. Call risk is the possibility
that, during times of declining interest rates, a bond issuer will "call" - or
repay - higher yielding bonds before their stated maturity. Changes in pre-
payment rates can result in greater price and yield volatility. Pre-payments
and calls generally accelerate when interest rates decline. When mortgage and
other obligations are pre-paid or called, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income - and the potential for taxable capital gains. Further, with
early prepayment, a Fund may fail to recover any premium paid, resulting in an
unexpected capital loss. Prepayment/call risk is generally low for securities
with a short-term maturity, moderate for securities with an intermediate-term
maturity, and high for securities with a long-term maturity.
Regulatory Risk. The risk associated with Federal and state laws which may
restrict the remedies that a lender has when a borrower defaults on loans.
These laws include restrictions on foreclosures, redemption rights after
foreclosure, Federal and state bankruptcy and debtor relief laws, restrictions
on "due on sale" clauses, and state usury laws.
Tax Risk. The risk that the issuer of the securities will fail to comply with
certain requirements of the Internal Revenue Code, which would cause adverse tax
consequences.
45
<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
Dean Witter Investment Management Inc. ("MSDW"), 1221 Avenue of the Americas,
New York, New York 10020, serves as investment subadvisor to Fifth Third
International Equity Fund.
As of September 30, 2000, Fifth Third Bank had approximately $ _____ billion of
assets under management, including approximately $ _____ billion of assets of
Fifth Third Funds. As of September 30, 2000, Heartland had approximately $ _____
billion of assets under management, including approximately $ _____ million of
assets held by mutual funds. As of September 30, 2000, MSDW, together with its
affiliated institutional asset management companies, had approximately $ _____
billion of assets under management, including approximately $ _____ billion of
assets held by mutual funds.
The management and subadvisory fees paid by the Funds for the fiscal year ended
July 31, 2000 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 Technology Fund 1.00%
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.
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
46
<PAGE>
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.
Steven J. Mygrant has been the co-portfolio manager for the Technology Fund
since 2000. Since 1996, he has been the Director of Equity Analysis at Fifth
Third Bank. Prior to 1996, he was the Director of Equity Research at a large
mid-western bank. He is a member of the Association for Investment Management
and Research and the Cincinnati Society of Security Analysts. He has over 15
years of investment experience and is a Certified Financial Analyst. Steven
earned a B.S. and MBA from The Ohio State University.
Sunil M. Reddy has been the co-portfolio manager for the Technology Fund since
2000. Since 1997, he has been an Equity Analyst covering semiconductor,
semiconductor equipment, enterprise hardware and software sectors at Fifth Third
Bank. Prior to 1997, he was a portfolio manager at a large mid-western bank. He
is a Chartered Financial Analyst with over 10 years of investment experience and
is a member of the Cincinnati Society of Financial Analysts. Sunil earned a B.S.
in Electrical Engineering from The Ohio State University and a MBA from Case
Western Reserve University.
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 Dean Witter Investment 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 MSDW since 1980
and Managing Director of Morgan Stanley & Co. Incorporated since 1975. He is
also a Director and Chairman of various registered investment companies to
which MSDW and certain of its affiliates provide investment advisory services.
Mr. Biggs holds a B.A. from Yale University and an M.B.A. from New York
University.
Ann Thivierge joined MSDW in 1986 and is a Managing Director. She has been a
member of MSDW's asset allocation committee for eight years. She received a B.A.
from James Madison College, Michigan State University in International Relations
and received her M.B.A. from New York University in Finance.
Fund Administration
BISYS Fund Services Limited Partnership ("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:
47
<PAGE>
<TABLE>
<CAPTION>
Maximum Average Aggregate Daily
------------------------------ --------------------------
Administrative Fee Net Assets of the Trust
------------------------------ --------------------------
<C> <S>
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 0.035% of the average aggregate daily net assets of all the
Funds.
48
<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.
49
<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
your request 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.
50
<PAGE>
Shareholder Information
Exchanging Your Shares
You may exchange your Fund shares for Institutional 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.
Instructions for Exchanging Shares
To exchange 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 for
exchange procedures or call 1-888-799-5353.
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.
Shares of the new Fund must be held under the same
account name, with the same registration and tax
identification numbers, as 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.
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.
51
<PAGE>
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 Technology 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.
52
<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.
Distributions are taxable to shareholders even if they are paid from income or
gains earned by a Fund before a shareholder's investment (and thus were included
in the price paid).
Any gain from the sale or exchange of Fund shares will generally also be subject
to tax.
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.
53
<PAGE>
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.
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<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.
55
<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>
Year Ended Period Ended
-------------- ------------
Per share data July 31, 2000 July 31, 1999*
-------------- --------------
<S> <C> <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 5.89
investments
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)
Ratios/Supplemental Data
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.
56
<PAGE>
Financial Highlights
Fifth Third Equity Income Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------ -----------------------
Per share data July 31, 2000 July 31, 1999*
------------------ -----------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
57
<PAGE>
Financial Highlights
Fifth Third Technology Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
--------------------- ---------------------
Per share data July 31, 2000 July 31, 1999
--------------------- ---------------------
<S> <C> <C>
Net asset value, beginning of period $ 14.86
Income from investment operations:
Net investment income 0.04
Net realized and unrealized gains/(losses)
from investments 5.17
Total from investment operations 5.21
Distributions to shareholders from:
Net investment income (0.01)
In excess of net investment income -
Net realized gain on investments (0.55)
Total distributions (0.56)
Net asset value, end of period $ 19.51
Total return (excludes sales charge) 35.61%(a)
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses 0.82%(b)
Net investment income/(loss) 0.16%(b)
Expense waiver/reimbursement(c) 0.07%(b)
Supplemental data:
Net assets at end of period (000s) 6,946
Portfolio turnover(d) 15%
</TABLE>
58
<PAGE>
Financial Highlights
Fifth Third Pinnacle Fund*
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
-------------------- -----------------------
July 31, 2000 July 31, 1999**
Per share data -------------------- -----------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
59
<PAGE>
Financial Highlights
Fifth Third Balanced Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
---------- ------------
Per share data July 31, 2000 July 31, 1999*
------------- ---------------
<S> <C> <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)
Ratios/Supplemental Data
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.
60
<PAGE>
Financial Highlights
Fifth Third Mid Cap Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------ ---------------------
Per share data July 31, 2000 July 31, 1999*
------------------ ---------------------
<S> <C> <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 1.95
investments
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)
Ratios/Supplemental Data
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.
61
<PAGE>
Financial Highlights
Fifth Third International Equity Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------- ------------------------
Per share data July 31, 2000 July 31, 1999*
-------------------- ------------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
62
<PAGE>
Financial Highlights
Fifth Third Bond Fund For Income
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------- -----------------
Per share data July 31, 2000 July 31, 1999*
------------- -----------------
<S> <C> <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)
Ratios/Supplemental Data
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.
63
<PAGE>
Financial Highlights
Fifth Third Quality Bond Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------ -----------------------
Per share data July 31, 2000 July 31, 1999*
------------------ -----------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
64
<PAGE>
Financial Highlights
Fifth Third U.S. Government Securities Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------- -----------------------
Per share data July 31, 2000 July 31, 1999*
------------------- -----------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
65
<PAGE>
Financial Highlights
Fifth Third Municipal Bond Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------- ----------------------
Per share data July 31, 2000 July 31, 1999*
------------------- ----------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
66
<PAGE>
Financial Highlights
Fifth Third Ohio Tax Free Bond Fund
Institutional Shares
<TABLE>
<CAPTION>
Year Ended Period Ended
------------------- -----------------------
Per share data July 31, 2000 July 31, 1999*
------------------- -----------------------
<S> <C> <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)
Ratios/Supplemental Data
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.
67
<PAGE>
FIFTH THIRD FUNDS
(formerly Fountain Square Funds)
Combined Statement of Additional Information
December 1, 2000
This Combined Statement of Additional Information (the "SAI") relates to
the Prospectuses following portfolios (the "Funds") of Fifth Third Funds (the
"Trust") dated December 1, 2000:
. Fifth Third Quality Growth 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 Technology 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 Ohio Tax Exempt 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 of the Funds.
To receive a copy of any Prospectus, you may write the Trust or call toll-free
(888) 799-5353. This SAI is not a prospectus.
Fifth Third Funds
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45623
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION ABOUT THE TRUST.................................................................... 1
INVESTMENT OBJECTIVE AND POLICIES OF THE FUNDS......................................................... 3
Investment Objectives................................................................................. 3
Investment Limitations................................................................................ 3
Fundamental Limitations............................................................................... 3
Non-fundamental Limitations........................................................................... 5
Fundamental Limitations............................................................................... 6
Non-Fundamental Limitations........................................................................... 9
All Funds except Stock and Bond Funds................................................................. 9
ADDITIONAL RISKS AND INFORMATION CONCERNING CERTAIN INVESTMENT TECHNIQUES.............................. 9
Types of Investments.................................................................................. 9
Portfolio Turnover.................................................................................... 21
Investment Risks (Ohio Tax Free Fund and Ohio Money Market Fund....................................... 21
Special Restriction on Fifth Third Government Money Market Fund....................................... 22
Special Restriction on Fifth Third U.S. Treasury Money Market Fund.................................... 22
FIFTH THIRD FUNDS MANAGEMENT........................................................................... 22
Officers and Trustees................................................................................. 22
Trust Ownership....................................................................................... 23
Trustee Liability..................................................................................... 29
Codes of Ethics....................................................................................... 29
INVESTMENT ADVISORY SERVICES........................................................................... 30
Investment Advisors to the Trust...................................................................... 30
Advisory Fees......................................................................................... 30
Sub-advisor........................................................................................... 31
Sub-advisory Fees..................................................................................... 31
Administrative Services............................................................................... 31
Custody of Fund Assets................................................................................ 32
Transfer Agent and Dividend Disbursing Agent.......................................................... 32
BROKERAGE TRANSACTIONS................................................................................. 33
PURCHASING SHARES...................................................................................... 35
Distribution Plan and Administrative Services Agreement (Investment C Shares Only).................... 35
Purchases with Proceeds from Redemptions of Unaffiliated Mutual Fund Shares........................... 36
Conversion of Investment B Shares to Investment A Shares.............................................. 37
Conversion to Federal Funds........................................................................... 37
Exchanging Securities for Fund Shares................................................................. 37
Payments to Dealers................................................................................... 37
REDEEMING SHARES....................................................................................... 38
Redemption in Kind.................................................................................... 38
Postponement of Redemptions........................................................................... 38
DETERMINING NET ASSET VALUE............................................................................ 39
Determining Market Value of Securities................................................................ 39
Valuing Municipal Bonds............................................................................... 40
Use of Amortized Cost................................................................................. 40
Monitoring Procedures................................................................................. 40
Investment Restrictions............................................................................... 40
Trading in Foreign Securities......................................................................... 41
TAX STATUS............................................................................................. 41
The Funds' Tax Status................................................................................. 41
Shareholders' Tax Status.............................................................................. 41
Capital Gains......................................................................................... 42
State and Local Taxes................................................................................. 42
Foreign Taxes......................................................................................... 42
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
PERFORMANCE INFORMATION................................................................................ 43
Total Return.......................................................................................... 43
Tax-Equivalent Yield.................................................................................. 45
Tax Equivalency Table................................................................................. 45
PERFORMANCE COMPARISONS................................................................................ 46
FINANCIAL STATEMENTS................................................................................... 49
APPENDIX............................................................................................... 50
</TABLE>
ii
<PAGE>
GENERAL INFORMATION ABOUT THE TRUST
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated September 15, 1988.
The Trust's 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 shares of the following Funds and shares of
the following classes of each Fund:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Funds Classes
-----------------------------------------------------------------------------------------------------------------------
Investment A Investment B Investment C Institutional
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fifth Third Quality Growth Fund ("Quality X X X X
Growth Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Equity Income Fund ("Equity X X X X
Income Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Pinnacle Fund ("Pinnacle X X X X
Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Balanced Fund ("Balanced X X X X
Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Mid Cap Fund ("Mid Cap Fund") X X X X
-----------------------------------------------------------------------------------------------------------------------
Fifth Third International Equity Fund X X X X
("International Equity Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Bond Fund For Income ("Bond X X* X X
Fund Income")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Quality Bond Fund ("Quality X X X X
Bond Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third U.S. Government Securities X X* X X
Fund ("Government Securities Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Municipal Bond Fund X X* X X
("Municipal Bond Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Ohio Tax Free Bond Fund X X X X
("Ohio Tax Free Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Technology Fund ("Technology X X X X
Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Ohio Tax Exempt Money Market X X
Fund ("Ohio Money Market Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Government Money Market Fund X X
("Government Money Market Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Prime Money Market Fund X X X
("Prime Money Market Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third Tax Exempt Money Market Fund X X
("Tax Exempt Fund")
-----------------------------------------------------------------------------------------------------------------------
Fifth Third U.S. Treasury Money Market X
Fund ("U.S. Treasury Money Market Fund")
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
*These shares are currently not available to the public.
Each Fund, is an "open-end" management investment company, and other than
the Ohio Tax-Free Fund, is a "diversified" company, as those terms are defined
in the Investment Company Act of 1940, as amended (the "1940 Act"). Among other
things, a diversified fund must, with respect to 75% of its total assets, not
invest more than 5% of its total assets in any one issuer. A non-diversified
Fund, such as the Ohio Tax-Free Fund, may, with respect to 75% of its total
assets, invest more than 5% of its total assets in any one issuer.
[On October 30, 2000, the Fifth Third Cardinal Fund transferred all of its
assets and liabilities to the Quality Growth Fund in exchange for shares of the
Quality Growth Fund. Therefore, the Fifth Third Cardinal Fund is no longer in
existence.]
The Trustees are responsible for managing the business and affairs of the
Trust. All Funds are advised by Fifth Third Bank (the "Advisor"), except for the
Pinnacle Fund, which is advised by Heartland Capital Management, Inc.
("Heartland"). Fifth Third Bank and Heartland are wholly-owned subsidiaries of
Fifth Third Bancorp. Morgan Stanley Dean Witter Investment Management Inc.
serves as investment sub-advisor to the International Equity Fund. Fort
Washington Investment Advisors, Inc. serves as investment sub-advisor to the
Ohio Money Market Fund (collectively, the "Sub-advisors").
2
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
The prospectuses state the investment objective of each Fund and discuss
certain investment policies employed to achieve those objectives. The following
discussion supplements the description of the Funds' investment policies in the
prospectus.
Investment Objectives
Each Fund's investment objective is fundamental and may not be changed
without shareholder approval.
Investment Limitations
Fundamental Limitations
Stock and Bond Funds
Except as provided below, each Fund has adopted the following fundamental
investment limitations. As fundamental investment limitations, they cannot be
changed with respect to a Fund without approval of the holders or a majority of
that Fund's Shares.
Issuing Senior Securities and Borrowing Money. None of the Funds described
---------------------------------------------
herein will 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, Municipal Bond
Fund and Pinnacle Fund) may enter into futures contracts, as applicable.
The Funds described herein 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. None of the Funds
described herein will purchase any securities while any borrowings in excess of
5% of its total assets are outstanding. Currently, none of the Funds described
herein intend to borrow money.
Selling Short and Buying on Margin. None of the Funds described herein
----------------------------------
will 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 a Fund described herein (with
the exception of Ohio Tax Free Fund, Municipal Bond Fund and Pinnacle 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 Funds described herein will not mortgage, pledge, or
---------------
hypothecate any assets, except to secure permitted borrowings. In these cases,
a Fund may pledge assets as necessary to secure such borrowings. 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)
3
<PAGE>
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.
Lending Cash or Securities. The Funds described herein will not lend any
--------------------------
of their respective assets except portfolio securities up to one-third of the
value of total assets. This shall not prevent a Fund from purchasing or holding
U.S. government obligations, money market instruments, publicly or non-publicly
issued municipal bonds, variable rate demand notes, bonds, debentures, notes,
certificates of indebtedness, or other debt securities, entering into repurchase
agreements, or engaging in other transactions where permitted by a Fund's
investment objectives, policies and limitations or the Trust's Declaration of
Trust.
Investing in Commodities. None of the Funds described herein will purchase
------------------------
or sell commodities or commodity contracts except to the extent that the Funds
described herein (with the exception of Ohio Tax Free Fund, Government
Securities Fund, Municipal Bond Fund and Pinnacle Fund) may engage in
transactions involving financial futures contracts or options on financial
futures contracts.
Investing in Real Estate. None of the Funds described herein will purchase
------------------------
or sell real estate, including limited partnership interests, although each of
these Funds 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, none of the Funds described herein (with the exception
of Ohio Tax Free Fund) will purchase securities issued by any one issuer (other
than cash, cash items or securities issued or guaranteed by the government of
the United States or its agencies or instrumentalities and repurchase agreements
collateralized by such securities), if as a result more than 5% of the value of
its total assets would be invested in the securities of that issuer. None of
the Funds described herein will acquire more than 10% of the outstanding voting
securities of any one issuer.
Dealing in Puts and Calls. The Pinnacle Fund, Municipal Bond Fund and Ohio
-------------------------
Tax Free Fund will not buy or sell puts, calls, straddles, spreads, or any
combination of these.
Concentration of Investments. The Quality Growth Fund, Cardinal Fund,
----------------------------
Pinnacle Fund, Balanced Fund, Mid Cap Fund, Technology Fund and International
Equity Fund will not invest 25% or more of the values 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.
Neither the Ohio Tax Free Fund or the Municipal Bond Fund will purchase
securities if, as a result of such purchase, 25% or more of the value of its
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, their Funds described herein
may invest as temporary investments more than 25% of the value of its total
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.
4
<PAGE>
Underwriting. None of the Funds described herein will 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.
Non-Fundamental Limitations
Stock and Bond Funds
Except as provided below, each Fund has adopted the following non-
fundamental investment limitations. As non-fundamental investment limitations,
they may be changed by the Trustees without shareholder approval.
Investing in Restricted Securities. The Funds described herein 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 described herein 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.
Investing in Securities of Other Investment Companies. The Funds described
-----------------------------------------------------
herein 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 described herein 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 Warrants. None of the Quality Growth Fund, Equity Income
---------------------
Fund, Cardinal Fund, Balanced Fund, Mid Cap Fund, or International Equity Fund
may invest more than 5% of its net assets in warrants, including those acquired
in units or attached to other securities. 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 is entitled to
them in deliverable form without further payment or after segregating cash in
the amount of any further payment.
5
<PAGE>
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 a Fund's policy relating to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later increase
or decrease in percentage resulting from any change in value or net assets will
not result in a violation of such restriction. For purposes of its policies and
limitations, the Trust considers certificates of deposit and demand and time
deposits issued by a U.S. branch of a domestic bank or savings and loan having
capital, surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items."
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.
Fundamental Limitations
Money Market Funds
Except as provided below, each Fund has adopted the following fundamental
investment limitations. As fundamental investment limitations, they cannot be
changed with respect to a Fund without approval of the holders or a majority of
that Fund's Shares.
Selling Short and Buying on Margin. None of the Funds described herein
----------------------------------
will sell any securities short or purchase any securities on margin, but each
may obtain such short-term credit as may be necessary for clearance of purchases
and sales.
Issuing Senior Securities and Borrowing Money. None of the Funds described
---------------------------------------------
herein will issue senior securities, except that a Fund may borrow money
directly or through reverse repurchase agreements as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in excess of 5%
of the value of its total assets (except for the Government Money Market Fund)
or in an amount up to one-third of the value of its total assets, including the
amount borrowed, in order to meet redemption requests without immediately
selling portfolio instruments. Any direct borrowings need not be
collateralized. None of the Funds described herein considers the issuance of
separate classes of shares to involve the issuance of "senior securities" within
the meaning of this investment limitation.
Neither the Government Money Market Fund, Ohio Money Market Fund nor the
Tax Exempt Money Market Fund will purchase any securities while borrowings in
excess of 5% of its total assets are outstanding. The U.S. Treasury Money
Market Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage purposes. None of the Funds described herein has any
present intention to borrow money.
Pledging Securities or Assets. The Prime Money Market Fund will not pledge
-----------------------------
securities. None of the Government Money Market Fund, Tax Exempt Money Market
Fund, Ohio Money Market Fund or U.S. Treasury Money Market Fund will mortgage,
pledge, or hypothecate any
6
<PAGE>
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 10% of the value of total assets at the time of the pledge.
Investing in Commodities, Commodity Contracts, or Real Estate. 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.
Underwriting. The Prime Money Market Fund will not engage in underwriting
------------
of securities issued by others. The Tax Exempt Money Market Fund will not
underwrite any issue of securities, except as the 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.
Lending Cash or Securities. None of the Funds described herein will lend
--------------------------
any of its assets, except that the Government Money Market Fund may purchase or
hold U.S. government securities permitted by its investment objective, policies
and limitations, the Prime Money Market Fund may purchase or hold money market
instruments, including repurchase agreements and variable rate demand notes,
permitted by its investment objective and policies, the Tax Exempt Money Market
Fund may purchase or hold U.S. government securities permitted by its investment
objective, policies and limitations, and the U.S. Treasury Money Market Fund may
purchase or hold U.S. Treasury obligations, including repurchase agreements
permitted by its investment objective and policies.
Acquiring Voting Securities. The Prime Money Market Fund will not acquire
---------------------------
the voting securities of any issuer. It will not invest in securities of a
company for the purpose of exercising control or management.
The Tax Exempt Money Market Fund will not acquire more than 10% of the
outstanding voting securities of any one issuer. For purposes of this
limitation, non-governmental users of facilities financed by industrial
development or pollution control revenue bonds and banks issuing letters of
credit or comparable guarantees supporting variable rate demand municipal
securities are considered to be issuers.
Diversification of Investments. With respect to 75% of the value of its
------------------------------
total assets, the Prime Money Market Fund will not purchase securities issued by
any one issuer having a value of more than 5% of the value of its total assets
except repurchase agreements and U.S. government obligations. The total amount
of the remaining 25% of the value of the Prime Money Market Fund's total assets
may be invested in a single issuer if the Advisor believes such a strategy to be
prudent.
7
<PAGE>
The Prime Money Market Fund considers the type of bank obligations it
purchases to be cash items.
With respect to 75% of the value of its total assets, the Tax Except Money
Market Fund will not purchase securities issued by any one issuer (other than
cash, cash items or securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such securities), if as a result more than 5% of the value of
its total assets would be invested in the securities of that issuer. For
purposes of this limitation, non-governmental users of facilities financed by
industrial development or pollution control revenue bonds and banks issuing
letters of credit or comparable guarantees supporting variable rate demand
municipal securities are considered to be issuers.
Concentration of Investments. 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 Tax Exempt Money Market Fund will not purchase securities if, as a
result of such purchase, 25% or more of the value of its total assets would be
invested in any one industry; provided that, this limitation shall not apply to
industrial development bonds or other securities, the interest upon which is
paid from revenues of similar types of projects, securities issued or guaranteed
by the U.S. government, its agencies or instrumentalities, or variable rate
demand municipal securities supported by letters of credit or guarantees.
Dealing in Puts and Calls. The Tax Exempt Money Market Fund will not buy
-------------------------
or sell puts, calls, straddles, spreads, or any combination of these.
Investing in Securities of Other Investment Companies. Each of the Prime
-----------------------------------------------------
Money Market Fund and the U.S. Treasury Money Market Fund acquire up to 3% of
the total outstanding securities of other investment companies. Each of these
Funds will limit its investments in the securities of other investment companies
to those of money market funds having investment objectives and policies similar
to its own. Each of these Funds will purchase securities of other investment
companies only in open-market transactions involving no more than customary
broker's commissions. However, there is no limitation applicable to securities
of any investment company acquired in a merger, consolidation, 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 such shares would
be subject to such customary expenses.
8
<PAGE>
Non-Fundamental Limitations
Money Market Funds
Except as provided below, each Fund has adopted the following non-
fundamental investment limitations. As non-fundamental investment limitations,
they may be changed by the Trustees without shareholder approval.
Investing in Securities of Other Investment Companies. Each of the
-----------------------------------------------------
Government Money Market Fund, the Tax Exempt Money Market Fund and Ohio Money
Market Fund can acquire up to 3% of the total outstanding securities of other
investment companies. Each of these Funds will limit its investments in the
securities of other investment companies to those of money market funds having
investment objectives and policies similar to its own. Each of these Funds will
purchase securities of other investment companies only in open-market
transactions involving no more than customary broker's commissions. However,
there is on limitation applicable to securities of any investment company
acquired in a merger, consolidation, 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 such shares would
be subject to such customary expenses.
Investing in Illiquid Securities. None of the Funds described herein will
--------------------------------
invest more than 10% of the value of its net assets in illiquid securities.
Investing in Restricted Securities. Neither the Prime Money Market nor the
----------------------------------
Tax Exempt Money Market Fund will invest more than 10% of the value of its net
assets in securities which are subject to restrictions on resale under federal
securities laws.
For the purposes of its policies and limitations, each of the Funds
described herein considers certificates of deposit and demand and time deposits
issued by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items."
ADDITIONAL RISKS AND INFORMATION CONCERNING CERTAIN INVESTMENT
TECHNIQUES
Types of Investments
Bank Instruments. The Prime Money Market Fund, the Tax Exempt Money
----------------
Market Fund, the Ohio Money Market Fund, the Quality Bond Fund, the Quality
Growth Fund, the Technology Fund, the Mid Cap Fund, the Balanced Fund, the
Equity Income Fund, the Bond Fund For Income, the Cardinal Fund, the Pinnacle
Fund and the Municipal Bond Fund may
9
<PAGE>
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: (a) Eurodollar Certificates of Deposit issued by foreign branches
of U.S. or foreign banks; (b) Eurodollar Time Deposits, which are U.S. dollar-
denominated deposits in foreign branches of U.S. or foreign banks; and (c)
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, the Ohio Tax
-----------------
Free Fund, the Municipal Bond Fund and the Pinnacle Fund, 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 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.
10
<PAGE>
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,
-------------------
the Ohio Tax Free Fund, the Municipal Bond Fund and the Pinnacle Fund, may
purchase put options on stock indices listed on national securities exchanges or
traded in the over-the-counter market. A stock index fluctuates with changes in
the market values of the 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, the Ohio Tax Free Fund, the Municipal Bond Fund and
the Pinnacle Fund, 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 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
11
<PAGE>
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, the Ohio Tax Free Fund, the Municipal Bond Fund and
the Pinnacle Fund, 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 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. No Fund will 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.
12
<PAGE>
"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.
Purchasing Put Options on Portfolio Securities. The Funds other than
----------------------------------------------
the Fifth Third Money Market funds, Ohio Tax Free Fund, Municipal Bond Fund and
Pinnacle Fund, 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, Ohio Tax Free Fund, Municipal Bond Fund and
Pinnacle Fund, 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, Ohio Tax Free Fund, Municipal Bond Fund and the Pinnacle Fund, 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.
13
<PAGE>
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.
Certain debt securities such as, but not limited to, mortgage-related
securities, collateralized mortgage obligations (CMO's), asset backed securities
and securitized loan receivables, as well as securities subject to prepayment of
principal prior to the stated maturity date, are expected to be repaid prior to
their stated maturity dates. As a result, the effective maturity of these
securities is expected to be shorter than the stated maturity. For purposes of
compliance with stated maturity policies and calculation of the Quality Bond
Fund's weighted average maturity, the effective maturity of such securities will
be used.
Convertible Securities. The Quality Growth Fund, the Technology Fund, the
----------------------
Mid Cap Fund, the Balanced Fund, the International Equity Fund, the Cardinal
Fund, the Pinnacle 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 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 Technology Fund, the Mid Cap Fund,
--------
the Balanced Fund, the International Equity Fund, and the Equity Income Fund may
invest in warrants except as limited above. 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
14
<PAGE>
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 and the Ohio Money Market 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 of that Fund. Examples of Municipal
Securities are (a) 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; (b) municipal notes and tax-exempt commercial
paper; (c) serial bonds; (e) tax anticipation notes sold to finance working
capital needs of municipalities in anticipation of receiving taxes at a later
date; (f) bond anticipation notes sold in anticipation of the issuance of long-
term bonds in the future; (g) pre-refunded municipal bonds whose timely payment
of interest and principal is ensured by an escrow of U.S. government
obligations; and (h) general obligation bonds.
Participation Interests. The Ohio Tax Free Fund, the Municipal Bond Fund, the
-----------------------
Ohio Money Market Fund and the Tax Exempt Money Market Fund may invest in
participation interests. Participation interests include the underlying
securities and any related guaranty, letter of credit, or collateralization
arrangement which a Fund would be allowed to invest in directly. The financial
institutions from which the Ohio Tax Free Fund, the Municipal Bond Fund, the
Ohio Money Market 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, the Ohio Money Market 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, the Ohio
----------------
Money Market 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
15
<PAGE>
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 retain a portion of their assets in cash. Any portion
of a Fund's assets retained in cash will reduce the Fund's return and, in the
case of a bond fund and Money Market fund, the Fund's yield.
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 International Equity Fund values its assets daily in U.S. dollars, the
International Equity Fund may not convert its holdings of foreign currencies to
U.S. dollars daily. The International Equity 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 International Equity Fund will engage in foreign currency exchange
transactions in connection with its portfolio investments. The International
Equity 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 International Equity 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 International Equity Fund's best interest to do so. The
International Equity Fund will not speculate in foreign currency exchange.
The International Equity 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
16
<PAGE>
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 International Equity 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. 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 International Equity 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 International Equity 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 International Equity Fund would not have to exercise their put
option. Likewise, if the International Equity 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
International Equity Fund would not have to exercise its call. Instead, the
International Equity 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 International Equity Fund's ability to establish and close out
positions on such options is subject to the maintenance of a liquid secondary
market. Although the International Equity 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
17
<PAGE>
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, 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 International Equity Fund may be
able to achieve many of the same objectives as it would through the use of
forward foreign currency exchange contracts. The International Equity 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 International Equity 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 International
Equity 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.
18
<PAGE>
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. 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. Except as provided above, the Funds, other
-----------------------------
than the Government Money Market Fund, 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
19
<PAGE>
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.
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
20
<PAGE>
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.
Temporary and Defensive Investments. Each Fund (other than the Money
-----------------------------------
Market funds) may hold up to 100% of its assets in cash or short-term debt
securities for temporary defensive purposes. A Fund will adopt a temporary
defensive position when, in the opinion of the Advisor, such a position is more
likely to provide protection against adverse market conditions than adherence to
the Fund's other investment policies. The types of short-term instruments in
which the Fund may invest for such purposes include short-term money market
securities, such as repurchase agreements, and securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities, certificates of
deposit, time deposits and bankers' acceptances of certain qualified financial
institutions and corporate commercial paper, which at the time of purchase are
rated at least within the "A" major rating category by Standard & Poor's
Corporation ("S&P") or the "Prime" major rating category by Moody's Investor's
Service, Inc. ("Moody's"), or, if not rated, issued by companies having an
outstanding long-term unsecured debt issued rated at least within the "A"
category by S&P or Moody's.
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 and Funds
in existence for less than one year:
<TABLE>
<CAPTION>
Fiscal year ended Fiscal year ended
July 31, 2000 July 31, 1999
------------- -------------
<S> <C> <C>
Government Securities Fund 93%
Quality Bond Fund 349%
Ohio Tax Free Fund 47%
Quality Growth Fund 34%
Mid Cap Fund 49%
Balanced Fund 128%
International Equity Fund 42%
Equity Income Fund 69%
Bond Fund For Income 104%
Municipal Bond Fund 110%
Cardinal Fund 15%*
Pinnacle Fund 51%
</TABLE>
_________________
* reflects period October 1, 1998 through July 31, 1999.
Investment Risks (Ohio Tax Free Fund and Ohio Money Market 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 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
21
<PAGE>
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.
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
22
<PAGE>
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.
Trust Ownership
As of [ __,2000,] the Officers and Trustees owned less than 1% of any class
of any Fund.
As of [ __,2000,] the following persons owned 5% or more of any class of
Shares of a Fund:
Fifth Third Quality Growth Fund-Investment A Shares
---------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Quality Growth Fund-Investment C Shares
---------------------------------------------------
23
<PAGE>
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Quality Growth Fund-Institutional Shares
----------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Services R
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Expediter
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Cardinal Fund-Investment A Shares
---------------------------------------------
FISERV Securities Inc. ______%
One Commerce Square Club 53
2005 Market Street
Philadelphia, PA 19103
Fifth Third Cardinal Fund-Investment C Shares
---------------------------------------------
FISERV Securities Inc. ______%
Trade House Club 53
2005 Market St., 11th Floor
Philadelphia, PA 19103
Fifth Third Cardinal Fund-Institutional Shares
----------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Services R
38 Fountain Square
Cincinnati, OH 45263
Fifth Third Pinnacle Fund-Investment A Shares
---------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Pinnacle Fund-Investment C Shares
---------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Pinnacle Fund-Institutional Shares
----------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Services R
24
<PAGE>
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Expediter
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Equity Income Fund-Investment A Shares
--------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Equity Income Fund-Investment C Shares
--------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Equity Income Fund-Institutional Shares
---------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Balanced Fund-Investment A Shares
---------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Balanced Fund-Investment C Shares
---------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Balanced Fund-Institutional Shares
----------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Services R
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Expediter
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Mid Cap Fund-Investment A Shares
--------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
25
<PAGE>
Fifth Third Mid Cap Fund-Investment C Shares
--------------------------------------------
FISERV Securities Inc. ______%
Trade House Account
2005 Market St.
Philadelphia, PA 19103
Fifth Third Mid Cap Fund-Institutional Shares
---------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Services R
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Expediter
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third International Equity Fund-Investment A Shares
---------------------------------------------------------
FISERV Securities ______%
Trade House Account
2005 Market Street
Philadelphia, PA 19103
Fifth Third International Equity Fund-Investment C Shares
---------------------------------------------------------
FISERV Securities ______%
2005 Market Street
Philadelphia, PA 19103
Donaldson Lufkin Jenrette ______%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
Fifth Third International Equity Fund-Institutional Shares
----------------------------------------------------------
Fifth Third Bank & Investment Services ______%
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank & Investment Services ______%
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Technology Fund-Investment A Shares
-----------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market Street
Philadelphia, PA 19103
Fifth Third Technology Fund-Investment C Shares
-----------------------------------------------
FISERV Securities Inc.
Trade House Account Club 53 ______%
2005 Market Street
Philadelphia, PA 19103
Fifth Third Technology Fund-Institutional Shares
------------------------------------------------
Fifth Third Bank Trust ______%
38 Fountain Square 1090 F2
Cincinnati, OH 45263
26
<PAGE>
Fifth Third Bank Trust ______%
38 Fountain Square 1090 F2
Cincinnati, OH 45263
Fifth Third Bond Fund for Income-Investment A Shares
----------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Bond Fund for Income-Investment C Shares
----------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Bond Fund for Income-Institutional Shares
-----------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Quality Bond Fund-Investment A Shares
-------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Quality Bond Fund-Investment C Shares
-------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Quality Bond Fund-Institutional Shares
--------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Services R
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Expediter
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Government Securities Fund-Investment A Shares
----------------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Government Securities Fund-Investment C Shares
----------------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
27
<PAGE>
Fifth Third Government Securities Fund-Institutional Shares
-----------------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Securities C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Trust and Investment Securities R
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Bank ______%
Expediter
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Municipal Bond Fund-Investment A Shares
---------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Municipal Bond Fund-Institutional Shares
----------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Securities C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Ohio Tax Free Fund-Investment A Shares
--------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Ohio Tax Free Fund-Investment C Shares
--------------------------------------------------
FISERV Securities Inc. ______%
Trade House Account Club 53
2005 Market St.
Philadelphia, PA 19103
Fifth Third Ohio Tax Free Fund-Institutional Shares
---------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third Government Money Market Fund-Investment A Shares
------------------------------------------------------------
Fifth Third Bank Trust Dept ______%
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Government Money Market Fund-Institutional Shares
-------------------------------------------------------------
Fifth Third Bank Trust Dept ______%
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Prime Money Market Fund-Investment A Shares
-------------------------------------------------------
Fifth Third Bank Trust Dept ______%
38 Fountain Square Plaza
Cincinnati, OH 45202
28
<PAGE>
Fifth Third Prime Money Market Fund-Institutional Shares
--------------------------------------------------------
Fifth Third Bank Trust Dept ______%
38 Fountain Square Plaza
Cincinnati, OH 45202
Fifth Third Tax Exempt Money Market Fund-Investment A Shares
------------------------------------------------------------
FISERV Investor Securities Inc. ______%
Non NSCC House Account
2005 Market St., 14/th/ Floor
Philadelphia, PA 19103
Fifth Third Tax Exempt Money Market Fund-Institutional Shares
-------------------------------------------------------------
Fifth Third Bank ______%
Trust and Investment Services C
38 Fountain Square Plaza
Cincinnati, OH 45263
Fifth Third U.S. Treasury Money Market Fund-Institutional Shares
----------------------------------------------------------------
Fifth Third Bank Trust Dept ______%
38 Fountain Square Plaza
Cincinnati, OH 45202
BISYS Fund Services ______%
3435 Stelzer Rd.
Columbus, OH 43219
Trustees' Compensation
Aggregate Compensation
Name and Position with Trust from Trust*+
---------------------------- ------------
Edward Burke Carey, Trustee $____
Lee A. Carter, Trustee $____
Albert E. Harris, Trustee, Chairman of the Board $____
* Information is furnished for the fiscal year ended July 31, 2000. The Trust
is the only investment company in the Fund complex.
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.
Codes of Ethics
Each of the Trust, Fifth Third Bank, Heartland, Morgan Stanley Dean Witter
Investment Management Inc., and Fort Washington Investment Advisors, Inc. as
investment advisor or investment sub-advisor to one or more Funds, and BISYS, as
distributor of Fund shares, has adopted a code of
29
<PAGE>
ethics pursuant to Rule 17j-1 under the 1940 Act. Each code permits personnel
subject to the code to invest in securities that may be purchased or held by the
Funds.
INVESTMENT ADVISORY SERVICES
Investment Advisors to the Trust
Fifth Third Bank serves as investment advisor to all Funds other than
Pinnacle Fund. 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.
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 (other than Funds in existence for less than
one year) and the amounts of those fees that were voluntarily waived or
reimbursed by the Advisor for the fiscal years ended July 31, 2000, July 31,
1999, and July 31, 1998 (amounts in thousands):
<TABLE>
<CAPTION>
Year ended Amount Year ended Amount Year ended Amount
Fund Name July 31, 2000 Waived-2000 July 31, 1999 Waived-1999 July 31, 1998 Waived-1998
--------- ------------- ----------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Government Securities Fund $ 261 $ 38 $ 228 $33
Quality Bond Fund 680 -- 545 --
Ohio Tax Free Bond Fund 1,122 79 980 --
Quality Growth Fund 4,920 -- 3,810 --
Mid Cap Fund 1,753 -- 1,725 --
Balanced Fund 1,673 -- 1,217 --
International Equity Fund 1,634 -- 1,471 --
Equity Income Fund 1,311 -- 1,088 --
Bond Fund For Income 1,369 -- 938 --
Municipal Bond Fund 661 -- 591 --
Cardinal Fund 1,364* -- n/a n/a
Pinnacle Fund 586 -- 129 --
Government Money Market Fund 2,789 -- 1,284 52
Prime Money Market Fund 1,657 83 1,762 88
Tax Exempt Money Market Fund 185 60* n/a n/a
U.S. Treasury Money Market Fund 3,707 1,298 2,795 978
</TABLE>
_______________
*Reflects operations for the period October 1, 1998 through July 31, 1999.
30
<PAGE>
Sub-advisors
Morgan Stanley Dean Witter Investment 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 Dean Witter Investment Management Inc. Fort
Washington Investment Advisors, Inc. is the Sub-advisor to Ohio Money Market
Fund under the terms of a Sub-advisory Agreement between Fifth Third Bank and
Fort Washington Investment Advisors, Inc. Fort Washington Investment Advisors,
Inc. is a subsidiary of The Western and Southern Life Insurance Company.
Sub-advisory Fees
For its sub-advisory services, each of Morgan Stanley Dean Witter
Investment Management Inc. ("Morgan Stanley") and Fort Washington Investment
Advisors, Inc. ("Fort Washington") receives an annual sub-advisory fee paid by
the Advisor as described in the prospectus.
For the year ended July 31, 1998, Morgan Stanley earned fees from
International Equity Fund of $777,259. For the year ended July 31, 1999, Morgan
Stanley earned fees from International Equity Fund of $735,375. Fort Washington
earned fees of $___________ for the Ohio Money Market Fund for the period from
__________, 1999 to July 31, 1999. For the year ended July 31, 2000, Morgan
Stanley earned fees of $___________ from the International Equity Fund and Fort
Washington earned fees of $____________ for the Ohio Money Market Fund.
Administrative Services
BISYS Fund Services L.P., 3435 Stelzer Road, Columbus, Ohio 43219, provided
administrative personnel and services to the Funds (other than Funds in
existence for less than one year) for the fees set forth in the prospectus. The
following shows all fees earned by BISYS for providing administrative services
to the Funds, and the amounts of those fees that were voluntarily waived, for
the years ended July 31, 1998, July 31, 1999, and July 31, 2000 (amounts in
thousands):
<TABLE>
<CAPTION>
Year ended Amount Year ended Amount Year ended Amount
Fund Name July 31, 2000 Waived-2000 July 31, 1999 Waived-1999 July 31, 1998 Waived-1998
--------- ------------- ----------- ------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Government Securities Fund $ 83 $ 46 $ 76 $41
Quality Bond Fund 217 120 180 99
Ohio Tax Free Fund 358 176 324 142
Quality Growth Fund 1,079 290 865 100
Mid Cap Fund 385 156 383 116
Balanced Fund 367 91 277 116
International Equity Fund 292 -- 265 --
Equity Income Fund 288 75 247 113
Bond Fund For Income 437 70 310 111
Municipal Bond Fund 211 116 196 108
Cardinal Fund 400* 25 n/a n/a
Pinnacle Fund 129 9 22 11
Government Money Market Fund 1,245 697 582 321
Prime Money Market Fund 741 372 801 441
Tax Exempt Money Market Fund 66* 37 n/a n/a
U.S. Treasury Money Market Fund 1,659 927 1,267 699
</TABLE>
________________
*Reflects operations for the period October 1, 1998 through July 31, 1999.
31
<PAGE>
Fifth Third Bank performs sub-administration services on behalf of each
Fund (other than Funds in existence for less than one year), for which it
receives compensation from BISYS Fund Services L.P. For the years ended July 31,
1998, July 31, 1999, and July 31, 2000, Fifth Third Bank earned the following
sub-administrative fees (amounts in thousands):
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
Fund Name July 31, 2000 July 31, 1999 July 31, 1998
--------- --------------- --------------- ---------------
<S> <C> <C> <C>
Government Securities Fund $ $ 12 $ 10
Quality Bond Fund $ $ 31 $ 24
Ohio Tax Free Fund $ $ 51 $ 44
Quality Growth Fund $ $154 $118
Mid Cap Fund $ $ 55 $ 53
Balanced Fund $ $ 52 $ 38
International Equity Fund $ $ 41 $ 36
Equity Income Fund $ $ 41 $ 33
Bond Fund for Income $ $ 62 $ 42
Municipal Bond Fund $ $ 30 $ 27
Cardinal Fund $ 68 n/a
Pinnacle Fund $ 18 $ 3
Government Money Market Fund $ $174 $ 79
Prime Money Market Fund $ $104 $109
Tax Exempt Money Market Fund $ 11 n/a
U.S. Treasury Money Market Fund $ $232 $172
</TABLE>
Custody of Fund Assets
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, 2000, July 31, 1999, and July
31, 1998, those fees were approximately $________, $510,000 and $449,000,
respectively.
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. The following shows all fees earned by Fifth Third for
providing transfer agency and dividend disbursing agency services, and the
amounts of those fees that were voluntarily waived, for the years ended July 31,
2000, July 31, 1999, and July 31, 1998 (amounts in thousands):
<TABLE>
<CAPTION>
Year Ended July 31, Year Ended July 31, Year Ended July 31,
Fund Name 2000 1999 1998
--------- ----------------------------------------------------------------------
<S> <C> <C> <C>
Government Securities Fund $ $16 $12
Quality Bond Fund $ $28 $19
Ohio Tax Free Fund $ $44 $28
Quality Growth Fund $ $90 $25
Mid Cap Fund $ $51 $36
Balanced Fund $ $32 $14
International Equity Fund $ $73 $51
</TABLE>
32
<PAGE>
<TABLE>
<S> <C> <C> <C>
Equity Income Fund $ $ 30 $24
Bond Fund for Income $ $ 28 $22
Municipal Bond Fund $ $ 25 $23
Cardinal Fund $ 28 n/a
Pinnacle Fund $ 38 $10
Government Money Market Fund $ $285 $14
Prime Money Market Fund $ $ 23 $28
Tax Exempt Money Market Fund $ 52 n/a
U.S. Treasury Money Market Fund $ $ 35 $25
</TABLE>
BISYS Fund Services Limited Partnership ("BISYS") serves as the sub-
transfer agent for the Funds. The fee paid for this service is based upon the
level of the Fund's average daily net assets ("asset based fee") plus out-of-
pocket expenses. In the event, the combined net assets of all of the Funds fall
below $3.5 billion at any time during the period, the fee paid shall be the sum
of the asset-based fee and an account-based fee.
LEGAL COUNSEL
Ropes & Gray, Suite 800 East, One Franklin Square, 1301 K Street, N.W.,
Washington, D.C. 20005 is counsel to the Funds.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Advisors and Sub-advisors look for prompt execution
of the order at a favorable price. In working with dealers, the Advisors and
Sub-advisors 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-advisors make decisions on portfolio
transactions and selects brokers and dealers subject to guidelines established
by the Trustees.
The Advisors and Sub-advisors 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-advisors 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-advisors 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, 2000, the Funds paid brokerage commissions in exchange for the brokerage and
research services described above in the following amounts: 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 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
33
<PAGE>
Pinnacle, $134,823 of the $134,823 total brokerage commissions paid. For the
fiscal year ended July 31, 1998, the Funds paid brokerage commissions in
exchange for the brokerage and research services described above in the
following amounts:
Research services provided by brokers may be used by the Advisors and Sub-
advisors in advising the Funds and other accounts. To the extent that receipt of
these services may supplant services for which the Advisors and Sub-advisors 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-advisors, the
Advisors and Sub-advisors 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-
advisors 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-advisors 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, 2000, the Funds acquired securities
of the Funds' regular brokers or dealers or their parents as follows:
Fund Security Principal/Shares Market Value
---- -------- ---------------- ------------
Quality Bond Fund
Balanced Fund
International Equity
Equity Income Fund
Cardinal Fund
Mid Cap Fund
Brokerage commissions paid by the Funds in secondary trading are as follows:
34
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
Fund Name July 31, 2000 July 31, 1999 July 31, 1998
---------
<S> <C> <C> <C>
Government Securities Fund $ n/a $ 1,250
Quality Bond Fund $ n/a $ 300
Ohio Tax Free Fund $ $ 2,768 n/a
Quality Growth Fund $ $ 405,47 $495,026
Mid Cap Fund $ $313,878 $230,000
Balanced Fund $ $145,176 $111,172
International Equity Fund $ $114,330 $163,055
Equity Income Fund $ $281,046 $156,975
Bond Fund For Income n/a $ 625
Municipal Bond Fund $ 2,740 $ 2,000
Cardinal Fund $ $231,463 $118,629
Pinnacle Fund $141,898 $ 16,967
Government Money Market Fund n/a n/a
Prime Money Market Fund n/a n/a
Tax Exempt Money Market Fund n/a n/a
U.S. Treasury Money Market Fund n/a n/a
</TABLE>
PURCHASING SHARES
Shares of the Funds are sold at their net asset value, less any applicable
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 B 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, Investment B 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.
35
<PAGE>
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 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 compensate the distributor 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.
Pursuant to the Plan, with respect to Investment B Shares, the Funds which
offer Investment B Shares, are authorized to compensate the distributor at the
annual rate of up to 1.00% of the average aggregate net asset value of the
Investment B Shares of each applicable Fund held during the month. [Investment B
Shares are new and the Funds have not accrued or paid any 12b-1 fees for these
Shares.]
Pursuant to the Plan, with respect to Investment C Shares, the Funds are
authorized to compensate the distributor 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, 2000,
the Distribution Plan received $_______ pursuant to the Plan. 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, 2000, the Funds paid $________ to Fifth
Third Bank to compensate BHC Securities, Inc. for providing administrative
services to Investment C Shares of the Funds.
Purchases with Proceeds from Redemptions of Unaffiliated Mutual Fund Shares
Investors may purchase Investment A Shares of the Funds at net asset value,
without a sales charge, with the proceeds from the redemption of shares of an
unaffiliated mutual fund that is not a money market or stable net asset value
fund. If the purchase of Investment A Shares is made with proceeds from the
redemption of mutual fund shares that were not sold with a sales charge or
commission, the investor must have held such mutual fund shares for at least 90
days to be eligible for the purchase of Investment A Shares at net asset value.
The purchase must be made within 60 days of the redemption, and the Funds must
be notified by the investor in writing, or by his financial institution, at the
time the purchase is made.
36
<PAGE>
Conversion of Investment B Shares to Investment A Shares
A shareholder's Investment B Shares of the Fund, including all Shares
received as dividends or distributions with respect to such Shares, will
automatically convert to Investment A Shares of the Fund at the end of eight
years following the issuance of such Shares, consequently, they will no longer
be subject to the higher expenses borne by Investment B Shares. The conversion
rate will be determined on the basis of the relative per Share net asset values
of the two classes and may result in a shareholder receiving either a greater or
fewer number of Investment A Shares than the Shares so converted.
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 funds.
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, in the opinion of the Advisor, 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:
37
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF INVESTMENT INVESTMENT INVESTMENT
INVESTMENT ($) A SHARES B SHARES C SHARES
-------------- -------- -------- --------
<S> <C> <C> <C>
Under 50,000 3.825%
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 0.50%*
</TABLE>
______________
* A 1% contingent deferred sales charge shall apply on any portion redeemed
within one year of purchase. Such charge will be applied to the value of the
assets redeemed at the time of purchase or at the time of redemption, whichever
is lower. Payment is available to those financial professionals with an
agreement with the Distributor which provides for such payment. The Distributor
currently imposes no additional conditions on an any financial professional to
amend its agreement with the Distributor to provide for such payment.
Brokers and agents may charge a transaction fee on the purchase or sale of
shares by shareholders.
REDEEMING SHARES
Shares are redeemed at the next computed net asset value after a Fund
receives the redemption request, less any contingent deferred sales charge.
Redemption procedures are explained in the prospectus under "Redeeming Shares."
Although the Funds do not charge for telephone redemptions, they reserve the
right to charge a fee for the cost of wire-transferred redemptions.
Investment A Shares and Investment C Shares redeemed within one (1) year of
purchase and Investment B Shares redeemed within six (6) years 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 B and/or 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 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
38
<PAGE>
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.
DETERMINING NET ASSET VALUE
Net asset values of the Funds generally may 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.
Determining Market Value of Securities
The value of the Funds' portfolio securities (with the exception of 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.
39
<PAGE>
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.
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 values. 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 values. 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, SEC rules require that a Money Market fund
limit its investments to instruments that, in the opinion of the Trustees or
their delegate, 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 or their
delegate 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.
40
<PAGE>
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. 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 regular trading on the New York Stock Exchange. In computing the net
asset value, the Funds (other than the Money Market Funds) value 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.
41
<PAGE>
TAX STATUS
Qualification as a Regulated Investment Company
Each Fund intends to qualify annually as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). In order to so qualify and to qualify for the special tax treatment
accorded regulated investment companies and their Shareholders, a Fund must,
among other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to certain securities loans, and gains from the
sale of stock, securities, and foreign currencies, or other income (including
but not limited to gains from options, futures, or forward contracts) derived
with respect to its business of investing in such stock, securities, or
currencies; (b) each year distribute at least 90% of its dividends, interest
(including tax-exempt interest), certain other income and the excess, if any, of
its net short-term capital gains over its net long-term capital losses; and (c)
diversify its holdings so that, at the end of each fiscal quarter (i) at least
50% of the market value of the Fund's assets is represented by cash, cash items,
U.S. Government securities, securities of other regulated investment companies,
and other securities, limited in respect of any one issuer to a value not
greater than 5% of the value of the Fund's total assets and 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one issuer or of two
or more issuers that the Fund controls and that are engaged in the same,
similar, or related trades or businesses.
If a Fund qualifies as a regulated investment company that is accorded
special tax treatment, the Fund will not be subject to federal income tax on
income paid to its shareholders in the form of dividends (including capital gain
dividends). If a Fund failed to qualify as a regulated investment company
accorded special tax treatment in any taxable year, the Fund would be subject to
tax on its taxable income at corporate rates, and all distributions from
earnings and profits, including any distributions of net tax-exempt income and
net long-term capital gains, would be taxable to shareholders as ordinary
income.
If a Fund fails to distribute in a calendar year substantially all of its
ordinary income for the year and substantially all its net capital gain income
for the one-year period ending October 31 of the year (and any retained amount
from the prior calendar year), the Fund will be subject to a non-deductible 4%
excise tax on the undistributed amounts.
Distributions
Each Fund will distribute at least annually any taxable income or realized
capital gains. Distributions of any taxable net investment income and net
short-term capital gain are taxable as ordinary income. Distributions of each
Fund's net capital gain (i.e., the excess of a Fund's net long-term capital gain
over net short-term capital loss), if any, are
42
<PAGE>
taxable as long-term capital gains, regardless of how long a Shareholder has
held Fund shares. Distributions of taxable income or capital gains are taxable
to Fund shareholders whether received in cash or in Fund shares through
automatic reinvestment. Any dividend declared by a Fund to Shareholders of
record on a date in October, November or December generally is deemed to have
been received by its Shareholders on December 31 of such year (and paid by the
Fund on or before such time) provided that the dividend actually is paid during
January of the following year.
If a Fund makes a distribution in excess of its current and accumulated
"earnings and profits" in any taxable year, the excess distribution will be
treated as a return of capital to the extent of a Shareholder's tax basis in
Fund shares, and thereafter as capital gain. A return of capital is not
taxable, but it reduces the Shareholder's tax basis in the shares, thus reducing
any loss or increasing any gain on a subsequent taxable disposition of those
shares.
Selling Shares
Shareholders who sell Fund Shares will generally recognize gain or loss in
an amount equal to the difference between their adjusted tax basis in the Fund
Shares and the amount received. If Fund Shareholders hold their Fund Shares as
capital assets, the gain or loss will be a capital gain or loss. The tax rate
generally applicable to net capital gains recognized by individuals and other
noncorporate taxpayers is (i) the same as the maximum ordinary income tax rate
for gains recognized on the sale of capital assets held for one year or less or
(ii) 20% for gains recognized on the sale of capital assets held for more than
one year (as well as capital gain dividends). For taxable years beginning after
December 31, 2000, the maximum capital gain tax rate for capital assets
(including Fund Shares) held by a non-corporate Shareholder for more than 5
years will be 8 percent and 18 percent (rather than 10 percent and 20 percent).
The 18-percent rate applies only to assets the holding period for which begins
after December 31, 2000 (including by way of an election to mark the asset to
the market, and to pay the tax on any gain thereon, as of January 2, 2001). The
mark-to-market election may be disadvantageous from a federal tax perspective,
and Shareholders should consult their tax advisors before making such an
election.
Any loss will be treated as a long-term capital loss to the extent of any
capital gain dividends received with respect to those Fund Shares. For purposes
of determining whether Fund Shares have been held for six months or less, the
holding period is suspended for any periods during which your risk of loss is
diminished as a result of holding one or more other positions in substantially
similar or related property, or through certain options or short sales. In
addition, any loss realized on a sale or exchange of Fund Shares will be
disallowed to the extent that Fund Shareholders replace the disposed of Fund
Shares with other Fund Shares within a period of 61 days beginning 30 days
before and ending 30 days after the date of disposition, which could, for
example, occur as a result of automatic dividend reinvestment. In such an
event, a Fund Shareholder's basis in the replacement Fund Shares will be
adjusted to reflect the disallowed loss.
43
<PAGE>
Borrowing
If a Fund Shareholder borrows money to buy Fund Shares, such Shareholder
may not deduct the interest on that loan. Under Internal Revenue Service rules,
Fund Shares may be treated as having been bought with borrowed money even if the
purchase of the Fund Shares cannot be traced directly to borrowed money.
Hedging
If a Fund engages in hedging transactions, including hedging transactions
in options, futures contracts, and straddles, or other similar transactions, it
will be subject to special tax rules (including constructive sales, mark-to-
market, straddle, wash sale, and short sale rules), the effect of which may be
to accelerate income to the Fund, defer losses to the Fund, cause adjustments in
the holding periods of the Fund's securities, or convert short-term capital
losses into long-term capital losses. These rules could therefore affect the
amount, timing and character of distributions to shareholders.
Certain of a Fund's hedging activities (including its transactions, if any,
in foreign currencies or foreign currency-denominated instruments) are likely to
produce a difference between its book income and its taxable income. If a
Fund's book income exceeds its taxable income, the distribution (if any) of such
excess will be treated as (i) a dividend to the extent of the Fund's remaining
earnings and profits (including earnings and profits arising from tax-exempt
income), (ii) thereafter as a return of capital to the extent of the recipient's
basis in the shares, and (iii) thereafter as gain from the sale or exchange of a
capital asset. If the Fund's book income is less than its taxable income, the
Fund could be required to make distributions exceeding book income to qualify as
a regulated investment company that is accorded special tax treatment.
Discount Securities
A Fund's investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a discount may)
require the Fund to accrue and distribute income not yet received. In order to
generate sufficient cash to make the requisite distributions, a Fund may be
required to sell securities in its portfolio that it otherwise would have
continued to hold.
Backup Withholding
The Funds will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends and other distributions paid to
any Shareholder who has provided either an incorrect tax identification number
or no number at all, or who is subject to withholding by the Internal Revenue
Service for failure to properly include on his or her tax return payments of
interest or dividends.
44
<PAGE>
The foregoing discussion and the one below regarding the Ohio Tax Free
Fund, the Municipal Bond Fund and the Tax Exempt Money Market Fund under "TAX
STATUS" is only a summary of some of the important Federal tax considerations
generally affecting purchasers of the Funds' Shares. No attempt has been made
to present a detailed explanation of the Federal income tax treatment of the
Funds, and this discussion is not intended as a substitute for careful tax
planning. Accordingly, potential purchasers of the Funds' Shares are urged to
consult their tax advisers with specific reference to their own tax situation.
Foreign Shareholders should consult their tax advisers regarding the U.S. and
foreign tax consequences of an investment in the Funds. In addition, this
discussion is based on tax laws and regulations that are in effect on the date
of this Statement of Additional Information; such laws and regulations may be
changed by legislative, judicial or administrative action, and such changes may
be retroactive.
Additional Tax Information Concerning the Ohio Tax Free Fund, the Municipal Bond
Fund and the Tax Exempt Money Market Fund
Federal Taxation. As indicated in their respective Prospectuses, the Ohio
Tax Free Fund, the Municipal Bond Fund and the Tax Exempt Money Market Fund are
designed to provide individual Shareholders with current tax-exempt interest
income. None of these Funds is intended to constitute a balanced investment
program or is designed for investors seeking capital appreciation. Shares of
the Funds may not be suitable for tax-exempt institutions, retirement plans
qualified under Section 401 of the Code, H.R. 10 plans, and individual
retirement accounts because such institutions, plans and accounts are generally
tax-exempt and, therefore, would not gain any additional benefit from the Funds'
dividends being tax-exempt, and such dividends would ultimately be taxable to
the plan and account beneficiaries when distributed to them.
The Code permits a regulated investment company that invests at least 50%
of its total assets in tax-free municipal securities (at the close of each
quarter of the Fund's taxable year) to pass through to its investors, tax-free,
net municipal securities interest income to the extent such interest would be
exempt if earned directly. Because the Ohio Tax Free Fund, the Municipal Bond
Fund and the Tax Exempt Money Market Fund intend to be qualified to pay such
exempt-interest dividends, these Funds will be limited in their ability to enter
into taxable transactions, such as forward commitments, repurchase agreements,
securities lending transactions, financial futures and options contracts on
financial futures, tax-exempt bond indices and other assets. The policy of the
Ohio Tax Free Fund, the Municipal Bond Fund and the Tax Exempt Money Market Fund
is to pay at least annually as dividends substantially all of each Fund's
municipal securities interest income net of certain deductions. An exempt-
interest dividend is any dividend or part thereof derived from interest
excludable from gross income and designated as an exempt-interest dividend in a
written notice mailed to Shareholders after the close of such Fund's taxable
year, but the aggregate of such dividends may not exceed the net municipal
securities interest received by each Fund during the taxable year.
45
<PAGE>
Exempt-interest dividends may be treated by Shareholders of the Ohio Tax
Free Fund, the Municipal Bond Fund and the Tax Exempt Money Market Fund as items
of interest excludable from their gross income. However, each such Shareholder
is advised to consult his or her tax adviser with respect to whether exempt-
interest dividends would remain excludable if such Shareholder were treated as a
"substantial user" or a "related person" to such user with respect to facilities
financed through any of the tax-exempt obligations held by such Funds. In
addition, exempt-interest dividends may be taxable for federal alternative
minimum tax purposes and for state and local purposes.
The Ohio Tax Free Fund, the Municipal Bond Fund and the Tax Exempt Money
Market Fund will distribute substantially all of any investment company taxable
income for each taxable year. In general, a Fund's investment company taxable
income will be its taxable income subject to certain adjustments and excluding
the excess of any net long-term capital gains for the taxable year over the net
short-term capital loss, if any, for such year. Distributions of such income
will be taxable to Shareholders as ordinary income. The dividends-received
deduction for corporations is not expected to apply to such distributions.
Because Fund expenses attributable to earning tax-exempt income do not
reduce the Fund's current earnings and profits, a portion of any distribution in
excess of the Fund's net tax-exempt and taxable income may be considered as paid
out of the Fund's earnings and profits and may therefore be treated as a taxable
dividend (even though that portion represents a return of the Fund's capital).
Shareholders receiving social security or railroad retirement benefits may
be taxed on a portion of those benefits as a result of receiving tax-exempt
income (including exempt-interest dividends distributed by the Funds).
A Fund's investments in municipal securities issued at a discount and
certain other portfolio positions will require the Fund to accrue and distribute
income and gains not yet received. In such cases, a Fund may be required to
sell assets (including when it is not advantageous to do so) to generate the
cash necessary to distribute as dividends to its shareholders all of its income
and gains and therefore eliminate any tax liability at the Fund level.
Like the other Funds, if for any taxable year the Ohio Tax Free Fund, the
Municipal Bond Fund and the Tax Exempt Money Market Fund do not qualify for the
special tax treatment afforded regulated investment companies, all of such
Fund's taxable income will be subject to tax at regular corporate rates (without
any deduction for distributions to Shareholders), and municipal securities
interest income, although not taxable to the Funds themselves, would be taxable
to Shareholders as ordinary income when distributed as dividends.
Foreign Taxes
46
<PAGE>
Dividends and interest received by a Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on the Fund's securities. Tax conventions between
certain countries and the United States may reduce or eliminate these taxes.
Foreign countries generally do not impose taxes on capital gains with respect to
investments by foreign investors. If at the end of a Fund's fiscal year more
than 50% of the value of its total assets represents securities of foreign
corporations, the Fund will be eligible to make an election permitted by the
Code to treat any foreign taxes paid by it on securities it has held for at
least the minimum period specified in the Code as having been paid directly by
the Fund's Shareholders in connection with the Fund's dividends received by
them. In this case, Shareholders generally will be required to include in U.S.
taxable income their pro rata share of such taxes, and those Shareholders who
are U.S. citizens, U.S. corporations and, in some cases, U.S. residents will be
entitled to deduct their share of such taxes. Alternatively, such Shareholders
who hold Fund Shares (without protection from risk of loss) on the ex-dividend
date and for at least 15 other days during the 30-day period surrounding the ex-
dividend date will be entitled to claim a foreign tax credit for their share of
these taxes. If a Fund makes the election, it will report annually to its
Shareholders the respective amounts per share of the Fund's income from sources
within, and taxes paid to, foreign countries and U.S. possessions.
47
<PAGE>
With respect to Ohio Tax Free Fund, Municipal Bond Fund, Ohio Money Market
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, Ohio Money Market 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, Ohio Money Market 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 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 the Funds (other
than the Money Market Funds) 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.
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<PAGE>
PERFORMANCE INFORMATION
Total Return (1)
Institutional Shares
Average Annual Total Return
For the Period Ended July 31, 2000
<TABLE>
<CAPTION>
Since
Fund Name 1 Year 5 Years 10 Years Inception
--------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities Fund
Quality Bond Fund
Ohio Tax Free Bond Fund
Quality Growth Fund
Mid Cap Fund
Balanced Fund
International Equity Fund
Equity Income Fund
Bond Fund for Income
Municipal Bond Fund
Cardinal Fund
Pinnacle Fund
Government Money Market Fund
Prime Money Market Fund
Tax Exempt Money Market Fund
U.S. Treasury Money Market Fund
</TABLE>
Investment A Shares
Average Annual Total Returns
For the Period Ended July 31, 2000
<TABLE>
<CAPTION>
Since
Fund Name 1 Year 5 Years 10 Years Inception
--------- ------ ------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities Fund
Quality Bond Fund
Ohio Tax Free Bond Fund
Quality Growth Fund
Mid Cap Fund
Balanced Fund
International Equity Fund
Equity Income Fund
Bond Fund for Income
Municipal Bond Fund
Cardinal Fund
Pinnacle Fund
Government Money Market Fund
Prime Money Market Fund
Tax Exempt Money Market Fund
</TABLE>
49
<PAGE>
Investment C Shares
Average Annual Total Return
For the Period Ended July 31, 2000
<TABLE>
<CAPTION>
Since
Fund Name 1 Year 5 Years 10 Years Inception
------ ------- -------- ---------
<S> <C> <C> <C> <C>
U.S. Government Securities Fund
Quality Bond Fund
Ohio Tax Free Bond Fund
Quality Growth Fund
Mid Cap Fund
Balanced Fund
International Equity Fund
Equity Income Fund
Bond Fund for Income
Cardinal Fund
Pinnacle Fund
</TABLE>
_____________
(1) Investment B Shares are a new class of Shares, and as of the date of this
Statement of Additional Information, there is no performance history.
Yield (1)
In addition to total returns, the Funds may advertise yields for each of
the share classes. The 30-day SEC yield for the 30 days ended July 31, 2000
were as follows:
<TABLE>
<CAPTION>
Institutional Shares Investment A Shares Investment
-------------------- ------------------- ----------
C Shares
--------
<S> <C> <C> <C>
U.S. Government Securities Fund
Quality Bond Fund
Ohio Tax Free Bond Fund
Balanced Fund
Bond Fund for Income
Municipal Bond Fund
</TABLE>
_____________
(1) Investment B Shares are a new class of Shares, and as of the date of this
Statement of Additional Information, there is no performance history.
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.
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<PAGE>
Tax-Equivalent Yield
The Ohio Tax Free Bond Fund, the Ohio Money Market 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, 2000, was
____%, while the tax-equivalent yield for the Municipal Bond fund for the 30-
day period ended July 31, 2000, was ____%. 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.
Tax Equivalency Table
The Ohio Tax Free Fund, the Ohio Money Market 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 2000
STATE OF OHIO
FEDERAL TAX BRACKET:
<S> <C> <C> <C> <C> <C>
15.00% 28.00% 31.00% 36.00% 39.60%
<CAPTION>
COMBINED FEDERAL AND STATE TAX BRACKET:
<S> <C> <C> <C> <C> <C>
19.425% 33.012% 37.650% 43.228% 46.828%
SINGLE $1- $26,251- $63,551- $132,601- OVER
RETURN 26,250 63,550 132,600 288,350 $288,351
Tax-Exempt Yield Taxable Yield Equivalent
1.50% 1.86% 2.24% 2.41% 2.64% 2.82%
2.00% 2.48% 2.99% 3.21% 3.52% 3.76%
2.50% 3.10% 3.73% 4.01% 4.40% 4.70%
3.00% 3.72% 4.48% 4.81% 5.28% 5.64%
3.50% 4.34% 5.22% 5.61% 6.17% 6.58%
4.00% 4.96% 5.97% 6.42% 7.05% 7.52%
4.50% 5.58% 6.72% 7.22% 7.93% 8.46%
5.00% 6.21% 7.46% 8.02% 8.81% 9.40%
5.50% 6.83% 8.21% 8.82% 9.69% 10.34%
6.00% 7.45% 8.96% 9.62% 10.57% 11.28%
</TABLE>
The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Therefore, there is a possibility that your yield may
be higher than those disclosed in the table. 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.
51
<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 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
52
<PAGE>
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 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%
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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)
. 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
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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.
FINANCIAL STATEMENTS
The financial statements for the Funds for the fiscal year ended July 31,
2000 are incorporated herein by reference to the Annual Report to Shareholders
of the Fifth Third Funds dated July 31, 2000. (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.
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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 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
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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
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.
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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:
. 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.
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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 Registrants Post-Effective Amendment No. 29 on Form N-
1A filed on or about October 1, 1999).
(viii) Amendment No. 15 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 31 on Form N-
1A filed on or about March 15, 2000).
(ix) Amendment No. 16 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 33 on Form N-
1A filed on June 14, 2000).
(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) Rights of Shareholders. The following portions of the Registrant's
Declaration of Trust define the rights of Shareholders.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided into
transferable Shares, without par value. Subject to the provisions of
Section 5 of this Article III, each Share shall have voting rights as
provided in Article VIII hereof, and holders of the Shares of any Series
shall be entitled to receive dividends, when and as declared with respect
thereto in the manner provided in Article X, Section 1 hereof. The Shares
of any Series may be issued in two or more Classes, as the Trustees may
authorize pursuant to Article XII, Section 8 hereof. Unless the Trustees
have authorized the issuance of Shares of a Series in two or more Classes,
each Share of a Series shall represent an equal proportionate interest in
the assets and liabilities of the Series with each other Share of the same
Series, none having priority or preference over another. If the Trustees
have authorized the issuance of Shares of a Series in two or more Classes,
then the Classes may have such variations as to dividend, redemption, and
voting rights, net asset values, expenses borne by the Classes, and other
matters as the Trustees have authorized provided that each Share of a Class
shall represent an equal proportionate interest in the assets and
liabilities of the class with each other Share of the same Class, none
having priority or preference over another. The number of Shares authorized
shall be unlimited. The Trustees may from time to time divide or combine
the Shares of any Series or Class into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Series or
Class.
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Section 4. No Pre-emptive Rights.
Shareholders shall have no pre-emptive or other right to subscribe to any
additional Shares or other securities issued by the Trust.
Fifth Third Balanced Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Bond Fund for Income;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Cardinal Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Prime Money Market Fund;
Investment A Shares;
Investment B Shares;
Institutional Shares;
Fifth Third Equity Income Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Government Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third International Equity Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Mid Cap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Ohio Tax Free Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
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Fifth Third Pinnacle Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Quality Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Quality Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Tax Exempt Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third U.S. Government Securities Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares; and
Fifth Third U.S. Treasury Money Market Fund;
Institutional Shares;
Fifth Third Technology Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Ohio Tax Exempt Money Market Fund;
Investment A Shares;
Institutional Shares;
Shares of any Series or Class established in this Section 5 shall have the
following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration received by the
Trust for the issue or sale of Shares of a particular Series or Class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series or
Class for all purposes, subject only to the rights of creditors, and shall
be so recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits and proceeds thereof, from whatever
source derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds, in whatever form the same
may be, are herein referred to as "assets belonging to" that Series or
Class. In the event that there are any assets, income, earnings, profits
and proceeds thereof, funds or payments which are not readily identifiable
as belonging to any particular Series or Class (collectively, "General
Assets"), the Trustees shall allocate such General Assets to, between or
among any one or more of the Series or Classes established and designated
from time to time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable, and any General Assets so allocated to
a particular Series or Class shall belong to that Series or Class.
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Each such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
(b) Liabilities Belonging to Series or Class. The assets belonging to each
particular Series or Class shall be charged with the liabilities of the Trust in
respect to that Series or Class and all expenses, costs, charges and reserves
attributable to that Series or Class, and any general liabilities of the Trust
which are not readily identifiable as belonging to any particular Series or
Class shall be allocated and charged by the Trustees to and among any one or
more of the Series or Classes established and designated from time to time in
such manner and on such basis as the Trustees in their sole discretion deem fair
and equitable. The liabilities, expenses, costs, charges and reserves so charged
to a Series or Class are herein referred to as "liabilities belonging to" that
Series or Class. Each allocation of liabilities belonging to a Series or Class
by the Trustees shall be conclusive and binding upon the Shareholders of all
Series or Classes for all purposes.
(c) Dividends, Distributions, Redemptions, Repurchases and Indemnification.
Notwithstanding any other provisions of this Declaration, including, without
limitation, Article X, no dividend or distribution (including, without
limitation, any distribution paid upon termination of the Trust or of any Series
or Class) with respect to, nor any redemption or repurchase of the Shares of any
Series or Class shall be effected by the Trust other than from the assets
belonging to such Series or Class, nor except as specifically provided in
Section 1 of Article XI hereof, shall any Shareholder of any particular Series
or Class otherwise have any right or claim against the assets belonging to any
other Series or Class except to the extent that such Shareholder has such a
right or claim hereunder as a Shareholder of such other Series or Class.
(d) Voting. Notwithstanding any of the other provisions of this Declaration,
including, without limitation, Section 1 of Article VIII, only Shareholders of a
particular Series or Class shall be entitled to vote on any matters affecting
such Series or Class. Except with respect to matters as to which any particular
Series or Class is affected, all of the Shares of each Series or Class shall, on
matters as to which such Series or Class is entitled to vote, vote with other
Series or Classes so entitled as a single class. Notwithstanding the foregoing,
with respect to matters which would otherwise be voted on by two or more Series
or Classes as a single class, the Trustees may, in their sole discretion, submit
such matters to the Shareholders of any or all such Series or Classes,
separately.
(e) Fraction. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligation of a whole Share of that Series or
Class, including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust or of any
Series or Class.
(f) Exchange Privilege. The Trustees shall have the authority to provide that
the holders of Shares of any Series or Class shall have the right to exchange
said Shares for Shares of one or more other Series or Classes in accordance with
such requirements and procedures as may be established by the Trustees.
(g) Combination of Series or Classes. The Trustees shall have the authority,
without the approval of the Shareholders of any Series or Class, unless
otherwise required by applicable law, to combine the assets and liabilities
belonging to a single Series or Class with the assets and liabilities of one or
more other Series or Classes.
(h) Elimination of Series or Classes. At any time that there are no Shares
outstanding of any particular Series or Class previously established and
designated, the Trustees may amend this Declaration of Trust to abolish that
Series or Class and to rescind the establishment and designation thereof.
ARTICLE IV
THE TRUSTEES
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Section 2. Election of Trustees at Meeting of Shareholders.
On a date fixed by the Trustees, which shall be subsequent to the initial
public offering of Shares, the Shareholders shall elect Trustees. The
number of Trustees shall be determined by the Trustees pursuant to Article
IV, Section 5.
Section 3. Term of Office of Trustees.
The Trustees shall hold office during the lifetime of this Trust, and until
its termination as hereinafter provided; except (a) that any Trustee may
resign his office at any time by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument signed by at least two-thirds
of the number of Trustees prior to such removal, specifying the date when
such removal shall become effective; (c) that any Trustee who requests in
writing to be retired or who has become mentally or physically
incapacitated may be retired by written instrument signed by a majority of
the other Trustees, specifying the date of his retirement; and (d) a
Trustee may be removed at any special meeting of Shareholders of the Trust
by a vote of two-thirds of the outstanding Shares.
Section 7. Ownership of Assets.
The assets belonging to each Series or Class shall be held separate and
apart from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustee. All of the
assets belonging to each Series or Class or owned by the Trust shall at all
times be considered as vested in the Trustees. No Shareholder shall be
deemed to have a severable ownership interest in any individual asset
belonging to any Series or Class or owned by the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in a Series or Class.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers.
Subject to the provisions set forth in Article III, Section 5(d), the
Shareholders shall have the power to vote, (i) for the election of Trustees
as provided in Article IV, Section 2; (ii) for the removal of Trustees as
provided in Article IV, Section 3(d); (iii) with respect to any investment
adviser or sub-investment adviser as provided in Article VII, Section 1;
(iv) with respect to the amendment of this Declaration of Trust as provided
in Article XII, Section 7; (v) to the same extent as the shareholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders; and (vi) with
respect to such additional matters relating to the Trust as may be required
by law, by this Declaration of Trust, or the By-Laws of the Trust or any
regulation of the Trust or the Commission or any State, or as the Trustees
may consider desirable. Each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote, and each fractional Share
shall be entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares of a Series or Class are issued, the
Trustees may exercise all rights of Shareholders of such Series or Class
with respect to matters affecting such Series or Class, and may take any
action with respect to the Trust or such Series or Class required or
permitted by law, this Declaration of Trust or any By-Laws of the Trust to
be taken by Shareholders.
Section 2. Meetings.
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A Shareholders meeting shall be held as specified in Section 2 of Article
IV at the principal office of the Trust or such other place as the Trustees
may designate. Special meetings of the Shareholders may be called by the
Trustees or the Chief Executive Officer of the Trust and shall be called by
the Trustees upon the written request of Shareholders owning at least one-
tenth of the outstanding Shares of all Series and Classes entitled to vote.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting.
Section 3. Quorum and Required Vote.
Except as otherwise provided by law, to constitute a quorum for the
transaction of any business at any meeting of Shareholders there must be
present, in person or by proxy, holders of more than fifty percent of the
total number of outstanding Shares of all Series and Classes entitled to
vote at such meeting. When any one or more Series or Classes is entitled to
vote as a single Series or Class, more than fifty percent of the shares of
each such Series of Class entitled to vote shall constitute a quorum at a
Shareholder's meeting of that Series or Class. If a quorum shall not be
present for the purpose of any vote that may properly come before the
meeting, the Shares present in person or by proxy and entitled to vote at
such meeting on such matter may, by plurality vote, adjourn the meeting
from time to time to such place and time without further notice than by
announcement to be given at the meeting until a quorum entitled to vote on
such matter shall be present, whereupon any such matter may be voted upon
at the meeting as though held when originally convened. Subject to any
applicable requirement of law or of this declaration of Trust or the By-
Laws, a plurality of the votes cast shall elect a Trustee, and all other
matters shall be decided by a majority of the votes cast and entitled to
vote thereon.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends to the
Shareholders of any Series or Class, and the amount of such dividends and
the payment of them shall be wholly in the discretion of the Trustees. Such
dividends may be accrued and automatically reinvested in additional Shares
(or fractions thereof) of the relevant Series or Class or paid in cash or
additional Shares of such Series or class, all upon such terms and
conditions as the Trustees may prescribe.
(d) All dividends and distributions on Shares of a particular Series or
Class shall be distributed pro rata to the holders of that Series or Class
in proportion to the number of Shares of that Series or Class held by such
holders and recorded on the books of the Trust or its transfer agent at the
date and time of record established for that payment.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class at any time
desires to dispose of Shares of such Series or Class recorded in his name,
he may deposit a written request (or such other form of request as the
Trustees may from time to time authorize) requesting that the Trust
purchase his Shares, together with such other instruments or authorizations
to effect the transfer as the Trustees may from time to time require, at
the office of the Transfer Agent, and the Trust shall purchase his Shares
out of assets belonging to such Series or Class. The purchase price shall
be the net asset value of his shares reduced by any redemption charge as
the Trustees from time to time may determine.
Payment for such Shares shall be made by the Trust to the Shareholder of
record within that time period required under the 1940 Act after the
request (and, if required, such other instruments or authorizations of
transfer) is deposited, subject to the right of the Trustees to postpone
the date of payment pursuant to Section 4 of this Article X. If the
redemption is postponed beyond the date on which it would normally occur by
reason of a declaration by the Trustees suspending the right of redemption
pursuant to Section 4 of this Article X, the right of the Shareholder to
have his Shares purchased by the Trust shall be similarly suspended, and he
may withdraw his request (or such other instruments or authorizations of
transfer)
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from deposit if he so elects; or, if he does not so elect, the purchase
price shall be the net asset value of his Shares determined next after
termination of such suspension (reduced by any redemption charge), and
payment therefor shall be made within the time period required under the
1940 Act.
Section 5. Trust's Right to Redeem Shares.
The Trust shall have the right to cause the redemption of Shares of any
Series or Class in any Shareholder's account for their then current net
asset value and promptly make payment to the Shareholder (which payment may
be reduced by any applicable redemption charge), if at any time the total
investment in the account does not have a minimum dollar value determined
from time to time by the Trustees in their sole discretion.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of Shareholders.
The Trustees, officers, employees or agents of the Trust shall have no
power to bind any Shareholder of any Series or Class personally or to call
upon such Shareholder for the payment of any sum of money or assessment
whatsoever, other than such as the Shareholder may at any time agree to pay
by way of subscription to any Shares or otherwise.
No Shareholder or former Shareholder of any Series or Class shall be liable
solely by reason of his being or having been a Shareholder for any debt,
claim, action, demand, suit, proceeding, judgement, decree, liability or
obligation of any kind, against, or with respect to the Trust or any Series
or Class arising out of any action taken or omitted for or on behalf of the
Trust or such Series or Class, and the Trust or such Series or Class shall
be solely liable therefor and resort shall be had solely to the property of
the relevant Series or Class of the Trust for the payment or performance
thereof.
Each Shareholder or former Shareholder of any Series or Class (or their
heirs, executors, administrators or other legal representatives or, in case
of a corporate entity, its corporate or general successor) shall be
entitled to be indemnified and reimbursed by the Trust to the full extent
of such liability and the costs of any litigation or other proceedings in
which such liability shall have been determined, including, without
limitation, the fees and disbursements of counsel if, contrary to the
provisions hereof, such Shareholder or former Shareholder of such Series or
Class shall be held to be personally liable. Such indemnification and
reimbursement shall come exclusively from the assets of the relevant Series
or Class.
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any act or
obligation of the Trust or any Series or Class and satisfy any judgment
thereon.
Section 3. Express Exculpatory Clauses and Instruments.
The Trustees shall use every reasonable means to assure that all persons
having dealings with the Trust or any Series or Class shall be informed
that the property of the Shareholders and the Trustees, officers, employees
and agents of the Trust or any series or Class shall not be subject to
claims against or obligations of the Trust or any other Series or Class to
any extent whatsoever. The Trustees shall cause to be inserted in any
written agreement, undertaking or obligation made or issued on behalf of
the Trust or any Series or Class (including certificates for Shares of any
Series or Class) an appropriate reference to the provisions of this
Declaration, providing that neither the Shareholders, the Trustees, the
officers, the employees nor any agent of the Trust or any Series or Class
shall be liable thereunder, and that the other parties to such instrument
shall look solely to the assets belonging to the relevant Series or class
for the payment of any claim thereunder or for the performance thereof; but
the omission of such provisions
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<PAGE>
from any such instrument shall not render any Shareholder, Trustee,
officer, employee or agent liable, nor shall the Trustee, or any officer,
agent or employee of the Trust or any Series or Class be liable to anyone
for such omission. If, notwithstanding this provision, any Shareholder,
Trustee, officer, employee or agent shall be held liable to any other
person by reason of the omission of such provision from any such agreement,
undertaking or obligation, the Shareholder, Trustee, officer, employee or
agent shall be indemnified and reimbursed by the Trust.
ARTICLE XII
MISCELLANEOUS
Section 3. Establishment of Record Dates.
The Trustees may close the Share transfer books of the Trust maintained
with respect to any Series or Class for a period not exceeding sixty (60)
days preceding the date of any meeting of Shareholders of the Trust or any
Series or Class, or the date for the payment of any dividend or the making
of any distribution to Shareholders, or the date for the allotment of
rights, or the date when any change or conversion or exchange or Shares of
any Series or Class shall go into effect; or in lieu of closing the Share
transfer books as aforesaid, the Trustees may fix in advance a date, not
exceeding sixty (60) days preceding the date of any meeting of Shareholders
of the Trust or any Series or Class, or the date for the payment of any
dividend or the making of any distribution to Shareholders of any Series or
Class, or the date for the allotment of rights, or the date when any change
or conversion or exchange of Shares of any Series or Class shall go into
effect, or the last day on which the consent or dissent of Shareholders of
any Series or Class may be effectively expressed for any purpose, as a
record date for the determination of the Shareholders entitled to notice
of, and, to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend or distribution, or to any
such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of shares, or to exercise the right to give
such consent or dissent, and in such case such Shareholders and only such
Shareholders as shall be Shareholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend or distribution, or to receive such allotment or
rights, or to exercise such rights, as the case may be, notwithstanding,
after such date fixed aforesaid, any transfer of any Shares on the books of
the Trust maintained with respect to any Series or Class. Nothing in the
foregoing sentence shall be construed as precluding the Trustees from
setting different record dates for different Series or Classes.
Section 4. Termination of Trust.
(c) Subject to a Majority Shareholder Vote by such Series or Class, the
Trustees may at any time sell and convert into money all the assets of the
Trust or any Series of Class. Upon making provision for the payment of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, belonging to each Series or Class, the Trustees shall
distribute the remaining assets belonging to each Series or Class ratably
among the holders of the outstanding Shares of that Series or Class.
Section 5. Offices of the Trust, Filing of Copies, Headings, Counterparts.
The Trust shall maintain a usual place of business in Massachusetts, which,
initially, shall be 2 Oliver Street, c/o CT Corporate Systems, Boston,
Massachusetts, and shall continue to maintain an office at such address
unless changed by the Trustees to another location in Massachusetts. The
Trust may maintain other offices as the Trustees may from time to time
determine. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Massachusetts Secretary of State and the Boston City
Clerk, as well as any other governmental office where such filing may from
time to time be required. Headings are placed herein for convenience of
reference only and in case of any conflict, the
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<PAGE>
text of this instrument, rather than the headings shall control. This
instrument may be executed in any number of counterparts each of which
shall be deemed an original.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings.
A special meeting of the Shareholders of the Trust or of a particular
Series or Class shall be called by the Secretary whenever ordered by the
Trustees, the Chairman or requested in writing by the holder or holders of
at least one-tenth of the outstanding Shares of the Trust or of the
relevant Series or Class, entitled to vote. If the Secretary, when so
ordered or requested, refuses or neglects for more than two days to call
such special meeting, the Trustees, Chairman or the Shareholders so
requesting may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the
Secretary.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 2. No indemnification.
No indemnification shall be provided hereunder to a Trustee or officer
against any liability to the Trust or any Series or Class or the
Shareholders of any Series or Class by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of his office.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of
each Series or Class a written financial report of the transactions of that
Series or Class including financial statements which shall at least
annually be certified by independent public accountants.
(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, L, and M to the 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).
(B) Exhibits N and 0 to the 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).
(C) Exhibits P and Q to the Investment Advisory Contract dated May
25, 2000 are filed herewith.
(ii) Sub-Advisory Agreement for the Fifth Third International Equity
Fund (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).
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<PAGE>
(iv) Sub-Advisory Agreement dated April 27, 2000 including Exhibit A for
the Fifth Third Ohio Tax Exempt Money Market Fund between Fifth
Third Bank and Fort Washington Investment Advisors, Inc. is filed
herewith.
(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, B and C to the Distribution Agreement
dated March 15, 2000 are filed herewith.
(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 dated
March 15, 2000 is filed herewith.
(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).
(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) Form of Amended Schedule A to Transfer Agency and Accounting
Services Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 33 filed on or about June 14,
2000).
(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).
C-10
<PAGE>
(A) Amendment to the Management and Administration Agreement
dated January 1, 2000 is filed herewith.
(B) Amended Schedule A to the Management and Administration
Agreement dated March 15, 2000 is filed herewith.
(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) Amendment to the Sub-Administration Agreement dated
January 1, 2000 is filed herewith.
(B) Amended Schedule A to the Sub-Administration Agreement
dated March 15, 2000 is filed herewith.
(iv) Sub-Transfer Agency Agreement including Schedules A, B, and C
is filed herewith.
(i) Opinion of Ropes & Gray is filed herewith.
(j) (ii) Consent of Ropes & Gray is filed herewith.
(k) Not applicable.
(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 dated December 1, 1995 including
Exhibits A and B dated March 15, 2000 is filed herewith.
(ii) Rule 12b-1 Agreement including Exhibits A and B dated September
20, 2000 is filed herewith.
(iii) Investment B Rule 12b-1 Plan dated April 1, 2000 including
Exhibit A as amended March 15, 2000 is filed herewith.
(iv) Investment B Rule 12b-1 Agreement including Exhibits A and B
dated September 20, 2000 is filed herewith.
(n) Amended and Restated Multiple Class Plan including Exhibit A, as
amended March 15, 2000 is filed herewith.
(p)(i) Codes of Ethics for Fifth Third Funds.
(p)(ii) Code of Ethics for Fifth Third Bank.
(p)(iii) Code of Ethics for BISYS Fund Services.
(p)(iv) Code of Ethics for Morgan Stanley Dean Witter Investment Management
Inc.
Item 24. Persons Controlled by or Under Common Control with Registrant
None
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<PAGE>
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
FIFTH THIRD BANK
<TABLE>
<CAPTION>
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
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.
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
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.
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 DEAN WITTER INVESTMENT 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).
MORGAN STANLEY ASSET MANAGEMENT
Officers (Principals and Managing Directors)
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. Biggs, 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
C-13
<PAGE>
<TABLE>
<S> <C>
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
Margaret 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
Ann Thivierge, Managing Director Michael F. Klein, Principal
Horacio A. Valeiras, Managing Director Paul W. Klug, Jr., Principal
James R. Tanner, Managing Director George Kosby, Principal
Mama C. Whittington, Managing Director Steven K. Kreider, Principal
Richard G. Woolworth, Jr., Managing Director Michael B. Kushma, Principal
Richard B. Worley, Managing Director Khoon-Min Lim, Principal
Warren J. Ackerman, 111, Principal Marianne J. Lippmann, Principal
Susan S. Akers, Principal William David Lock, Principal
Robert E. Angevine, Principal Jeremy Lodewick, Principal
W. David Armstrong, Principal Gordon W. Loery, Principal
Eileen M. Barron, Principal Yvonne Lonorley, Principal
Gerald P. Barth-Wehrenalp, Principal Andrew John Mack, Principal
Glenn E. Becker, Principal Gary J. Mangino, Principal
Richard M. Behler, Principal Angelo G. Maniowoekis, Principal
Stephen H. Belgrad, Principal James J. Manley, Principal
William Bentley, Principal Jeffrey Margolis, Principal
Theodore R. Bigman, Principal Ian Martin, Principal
E. Clayton Boggs, Principal M. Paul Martin, Principal
Stuart H. Bohart, Principal Teresa E. Martini, Principal
Richard F. Brereton, Principal Walter Maynard, Jr., Principal
Andrew C. Brown, Principal Phoebe Mcbee, Principal
Jeffry P. Brown, Principal Alexis C. McCarthy, Principal
Angelica T. Cantlon, Principal Milesh Modi, Principal
Mary Ann Milias St. Peter, Principal Yoshiro Okawa, Principal
Paul F. O'Brien, Principal Christopher G. Petrow, Principal
Wayne D. Peterson, Principal Akash Prakash, Principal
Andreas Ludwig J. Povell, Principal Gail H. Reeke, Principal
Narayan Rachmachandran, Principal Christine 1. Reilly, Principal
Ronald R. Reese, Principal Stepano Russo, Principal
Christian G. Roth, Principal James H. Scott, Principal
James D. Schmid, Principal Roberto M. Sella, Principal
Kiat Seng Seah, Principal Andy B. Skov, Principal
Stephen C. Sexauer, Principal Joseph P. Stadler, Principal
Kim L. Spellman, Principal Ram K. Sunclaram, Principal
Kunihiko Sugio, Principal Lorraine Truten, Principal
Ann D. Thivierge, Principal Roberto Vedovetto, Principal
Elizabeth A. Vale, Principal
</TABLE>
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<PAGE>
Marjorie M. Wilcox, Principal Ram Willner, Principal
Philip W. Winters, Principal Bruce Wolfe, Principal
Peter John Wright, 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 Mutual Funds, The BB&T Mutual Funds Group,
The Coventry Group, 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., Metamarkets.com Funds, Meyers Investment Trust, MMA Praxis Mutual Funds,
M.S.D.&T. Funds, Old Westbury Funds, Pacific Capital Funds, The Republic
Investor Trust, Sefton Funds Trust, SSgA International Liquidity Fund, Summit
Investment Trust, Variable Insurance Funds, The Victory Portfolios, The Victory
Variable Insurance Funds, USAllianz Variable Insurance Products Trust and
Vintage Funds, Inc., each of which is an investment management company.
(b) Directors, officers and partners of BISYS, as of September 21, 2000 were as
follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with
Business Address Positions and Offices with BISYS Registrant
------------------ -------------------------------- --------------------------
<S> <C> <C>
WC Subsidiary Corp. Sole Limited Partner None
150 Clove Road
Little Falls, NJ 07424
BISYS Fund Services, Inc. Sole General Partner None
3435 Stelzer Road
Columbus, Ohio 43219
Dennis Sheehan Executive Officer None
3435 Stelzer Road
Columbus, Ohio 43219
William Tomko Supervising Principal None
3435 Stelzer Road
Columbus, Ohio 43219
Gregory Trichtinger Vice President None
3435 Stelzer Road
Columbus, Ohio 433219
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
Andrew Corbin Vice President None
3435 Stelzer Road
Columbus, Ohio 43219
Robert Tuch Assistant Secretary None
3435 Stelzer Road
Columbus, Ohio 43219
Olu T. Lawal Fin-Op None
3435 Stelzer Road
Columbus, Ohio 43219
</TABLE>
(c) Not applicable.
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
Forth Washington Investment Advisers, Inc. (Sub-Advisor to the Fifth Third Ohio
Tax Exempt Money Market Fund)
420 East Fourth Street
Cincinnati, Ohio 45202
Item 29. Management Services
Not applicable.
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<PAGE>
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Washington, District of Columbia on the 29th day of September 2000.
FIFTH THIRD FUNDS
BY: /s/ Stephen G. Mintos
--------------------------------------------
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 and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* /s/ Stephen G. Mintos President
-----------------------
Stephen G. Mintos (Principal Executive Officer) September 29, 2000
* /s/ Gary R. Tenkman Treasurer (Principal Financial
---------------------
Gary R. Tenkman and Accounting Officer) September 29, 2000
* /s/ Edward Burke Carey Trustee September 29, 2000
------------------------
Edward Burke Carey
* /s/ Lee A. Carter Trustee September 29, 2000
-------------------
Lee A. Carter
* /s/ Albert E. Harris Chairman and Trustee September 29, 2000
----------------------
Albert E. Harris
</TABLE>
*By: /s/ Alyssa Albertelli
-----------------------------
Alyssa Albertelli, as Attorney-in-fact pursuant to Powers of Attorney filed
herewith
C-18
<PAGE>
EXHIBIT INDEX
(d) (i) (C) Exhibits P and Q to the Investment Advisory Contract
(d) (iv) Sub-Advisory Agreement including Exhibit A between Fifth Third
Bank and Fort Washington Investment Advisers, Inc
(e) (i) (A) Amended Schedules A, B and C to Distribution Agreement
(e) (ii) (A) Amended Exhibit A to Administrative Service Agreement
(h) (ii) (A) Amendment to Management and Administration Agreement
(h) (ii) (B) Amended Schedule A to Management and Administration Agreement
(h) (iii) (A) Amendment to Sub-Administration Agreement
(h) (iii) (B) Amended Schedule A to Sub-Administration Agreement
(h) (iv) Sub-Transfer Agency Agreement including Exhibits A-C
(i) Opinion of Ropes & Gray
(j) (ii) Consent of Ropes & Gray
(m) (i) Amended Rule 12b-1 Plan including Exhibits A and B
(m) (ii) Form of Rule 12b-1 Agreement including Exhibits A and B
(m) (iii) Investment B Rule 12b-1 Plan including Exhibit A
(m) (iv) Investment B Rule 12b-1 Agreement including Exhibits A and B
(n) Amended and Restated Multiple Class Plan including Exhibit A
(p) (i) Code of Ethics for Fifth Third Funds
(p) (ii) Code of Ethics for Fifth Third Bank
(p) (iii) Code of Ethics for BISYS Fund Services
(p) (iv) Code of Ethics for Morgan Stanley Dean Witter Investment
Management Inc.
