<PAGE> 1
THE MONEY MARKET PORTFOLIOS
INVESTOR SHARES
Compass Capital Funds(SM) ("Compass Capital" or the "Fund") consist of
twenty-eight investment portfolios. This Prospectus describes the Investor
Shares of five of those portfolios (the "Portfolios") which are being offered to
investors establishing accounts through Janney Montgomery Scott:
NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO
NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO
OHIO MUNICIPAL MONEY MARKET PORTFOLIO
PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO
VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO
SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, PNC BANK, NATIONAL ASSOCIATION OR ANY OTHER BANK AND ARE NOT
INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENTS IN THE PORTFOLIOS INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. THERE
CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
This Prospectus contains information that a prospective investor needs to
know before investing. Please keep it for future reference. A Statement of
Additional Information dated May 31, 1996 (as supplemented from time to time)
has been filed with the Securities and Exchange Commission (the "SEC"). The
Statement of Additional Information may be obtained free of charge from the Fund
by calling (800) 441-7762. The Statement of Additional Information, as
supplemented from time to time, is incorporated by reference into this
Prospectus.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE PORTFOLIOS ARE INTENDED ONLY FOR
RESIDENTS OF THE RESPECTIVE STATES INDICATED.
- --------------------------------------------------------------------------------
PROSPECTUS May 31, 1996
<PAGE> 2
THE MONEY MARKET PORTFOLIOS OF COMPASS CAPITAL FUNDS
The Money Market Portfolios of Compass Capital Funds consist of eight
short-term investment alternatives. The Portfolios described in this Prospectus
invest in tax-exempt instruments. A detailed description of each Portfolio
begins on page 10.
<TABLE>
<S> <C>
COMPASS CAPITAL PORTFOLIO LIPPER PEER GROUP
- NJ MUNICIPAL MONEY MARKET - NJ TAX-EXEMPT MONEY MARKET FUNDS
- NC MUNICIPAL MONEY MARKET - OTHER STATES TAX-EXEMPT MONEY MARKET
- OH MUNICIPAL MONEY MARKET FUNDS
- PA MUNICIPAL MONEY MARKET - OHIO TAX-EXEMPT MONEY MARKET FUNDS
- VA MUNICIPAL MONEY MARKET - PA TAX-EXEMPT MONEY MARKET FUNDS
- OTHER STATES TAX-EXEMPT MONEY MARKET
FUNDS
</TABLE>
PNC Asset Management Group, Inc. ("PAMG") serves as the Fund's investment
adviser. PNC Institutional Management Corporation ("PIMC") serves as the
sub-adviser to the Portfolios as described in this Prospectus.
UNDERSTANDING THE COMPASS CAPITAL MONEY MARKET PORTFOLIOS
This Prospectus has been crafted to provide detailed, accurate and
comprehensive information on the Compass Capital Portfolios. We intend this
document to be an effective tool as you explore different directions in money
market investing. You may wish to use the table of contents on the back cover to
find descriptions of the Portfolios, including the investment objectives,
portfolio management styles, risks and charges and expenses.
CONSIDERING THE RISKS IN MONEY MARKET INVESTING
There can be no assurance that any mutual fund will achieve its investment
objective, or that any Portfolio will be able to maintain a stable net asset
value of $1.00 per share. The Portfolios may invest in municipal securities
backed by the credit of foreign banks, which may be subject to risks in addition
to those inherent in U.S. investments. Each Portfolio will concentrate in the
securities of issuers located in a particular state, and is non-diversified,
which means that its performance may be dependent upon the performance of a
smaller number of securities than diversified investment portfolios. See "What
Additional Investment Policies And Risks Apply?"
INVESTING IN THE COMPASS CAPITAL FUNDS
For information on how to purchase and redeem shares of the Portfolios, see
"How Are Shares Purchased" and "How Are Shares Redeemed?"
2
<PAGE> 3
WHAT ARE THE EXPENSES OF THE PORTFOLIOS?
- --------------------------------------------------------------------------------
Below is a summary of the annual operating expenses expected to be incurred
by Investor Shares of the Portfolios after fee waivers for the current fiscal
year ending September 30, 1996 as a percentage of average daily net assets. An
example based on the summary is also shown.
ANNUAL PORTFOLIO OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
NEW JERSEY MUNICIPAL MONEY NORTH CAROLINA MUNICIPAL MONEY OHIO MUNICIPAL MONEY
MARKET PORTFOLIO MARKET PORTFOLIO MARKET PORTFOLIO
-------------------------- ------------------------------ --------------------
INVESTOR A INVESTOR A INVESTOR A
-------------------------- ------------------------------ --------------------
<S> <C> <C> <C>
Advisory fees
(after fee waivers)(1)................ .05% .06% .06%
12b-1 fees(2)........................... .10 .10 .10
Other operating expenses
(after fee waivers)(1)................ .71 .70 .70
----------- ------------- --------
Shareholder servicing fee............. .25 .25 .25
Shareholder processing fee............ .15 .15 .15
Other expenses........................ .31 .30 .30
------------ -------------- ---------
Total Portfolio operating expenses
(after fee waivers)(1)................ .86% .86% .86%
=========== ============= ========
</TABLE>
- ------------------
(1) "Other expenses" includes the administration fees payable by the Portfolios.
Without waivers, advisory fees would be .45% and administration fees would
be .18% for each Portfolio. PAMG and the Portfolios' administrators are
under no obligation to waive or continue waiving their fees, but have
informed the Fund that they expect to waive fees as necessary to maintain
the Portfolios' total operating expenses during the remainder of the current
fiscal year at the levels set forth in the table. The information in the
table is based on the advisory fees, administration fees and other expenses
payable after fee waivers for the fiscal year ended September 30, 1995, as
restated to reflect current expenses and fee waivers. Without waivers,
"Other operating expenses" would be .86%, .82% and .77%, respectively, and
"Total Portfolio operating expenses" would be 1.41%, 1.37%, and 1.32%,
respectively.
(2) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the rules of the NASD.
3
<PAGE> 4
WHAT ARE THE EXPENSES OF THE PORTFOLIOS? (Continued)
ANNUAL PORTFOLIO OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
PENNSYLVANIA MUNICIPAL MONEY VIRGINIA MUNICIPAL MONEY
MARKET PORTFOLIO MARKET PORTFOLIO
---------------------------- ------------------------
INVESTOR A INVESTOR A
---------------------------- ------------------------
<S> <C> <C>
Advisory fees (after fee waivers)(1).......................... .06% .05%
12b-1 fees(2)................................................. .10 .10
Other operating expenses (after fee waivers)(1)............... .70 .71
------------ ----------
Shareholder servicing fee................................... .25 .25
Shareholder processing fee.................................. .15 .15
Other expenses.............................................. .30 .31
------------- -----------
Total Portfolio operating expenses (after fee waivers)(1)..... .86% .86%
============ ==========
</TABLE>
- ------------------
(1) "Other expenses" includes the administration fees payable by the Portfolios.
Without waivers, advisory fees would be .45% and administration fees would
be .18% for each Portfolio. PAMG and the Portfolios' administrators are
under no obligation to waive or continue waiving their fees, but have
informed the Fund that they expect to waive fees as necessary to maintain
the Portfolios' total operating expenses during the remainder of the current
fiscal year at the levels set forth in the table. The information in the
table is based on the advisory fees, administration fees and other expenses
payable after fee waivers for the fiscal year ended September 30, 1995, as
restated to reflect current expenses and fee waivers. Without waivers,
"Other operating expenses" would be .75% and .86%, respectively, and "Total
Portfolio operating expenses" would be 1.30% and 1.41%, respectively.
(2) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the rules of the NASD.
4
<PAGE> 5
EXAMPLE
An investor in Investor Shares would pay the following expenses on a $1,000
investment assuming (1) 5% annual return, and (2) redemption at the end of each
time period:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
New Jersey Municipal Money Market
A Shares............................................... $9 $27 $48 $106
North Carolina Municipal Money Market
A Shares............................................... 9 27 48 106
Ohio Municipal Money Market
A Shares............................................... 9 27 48 106
Pennsylvania Municipal Money Market
A Shares............................................... 9 27 48 106
Virginia Municipal Money Portfolio
A Shares............................................... 9 27 48 106
</TABLE>
The foregoing Tables and Example are intended to assist investors in
understanding the expenses the Portfolios pay. Investors bear these expenses
either directly or indirectly. They do not reflect any charges that may be
imposed by brokers or other institutions directly on their customer accounts in
connection with investments in the Portfolios.
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
INVESTMENT RETURN OR OPERATING EXPENSES. ACTUAL INVESTMENT RETURN AND OPERATING
EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
5
<PAGE> 6
WHAT ARE THE PORTFOLIOS' FINANCIAL HIGHLIGHTS?
- --------------------------------------------------------------------------------
The following financial information has been derived from the financial
statements incorporated by reference into the Statement of Additional
Information and has been audited by the Portfolios' independent accountants.
This financial information should be read together with those financial
statements. For the period shown there were no outstanding Investor Shares of
the Virginia Municipal Money Market Portfolio. Further information about the
performance of the Portfolios is available in the Fund's annual shareholder
reports. Both the Statement of Additional Information and the annual shareholder
reports may be obtained from the Fund free of charge by calling (800) 441-7762.
6
<PAGE> 7
FINANCIAL HIGHLIGHTS
(FOR AN INVESTOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
OHIO MUNICIPAL MONEY
MARKET PORTFOLIO
--------------------
INVESTOR A SHARES
--------------------
FOR THE
PERIOD
YEAR 10/5/93(1)
ENDED THROUGH
9/30/95 9/30/94
-------- --------
<S> <C> <C>
Net asset value at beginning of period........................................................ $ 1.00 $ 1.00
-------- --------
Income from investment operations
Net investment income..................................................................... 0.0310 0.0199
Net realized gain (loss) on investments................................................... -- --
-------- --------
Total from investment operations..................................................... 0.0310 0.0199
-------- --------
Less distributions
Distributions from net investment income.................................................. (0.0310) (0.0199)
Distributions from net realized capital gains............................................. -- --
-------- --------
Total distributions.................................................................. (0.0310) (0.0199)
-------- --------
Net asset value at end of period.............................................................. $ 1.00 $ 1.00
======== ========
Total return.................................................................................. 3.15% 2.01%
Ratios/Supplemental data
Net assets at end of period (in thousands)................................................ $ 75 $ 28
Ratios of expenses to average net assets
After advisory/administration fee waivers............................................... 0.80% 0.62%(2)
Before advisory/administration fee waivers.............................................. 1.26% 1.26%(2)
Ratios of net investment income to average net assets
After advisory/administration fee waivers............................................... 3.02% 1.94%(2)
Before advisory/administration fee waivers.............................................. 2.56% 1.30%(2)
</TABLE>
- -------------
(1) Commencement of operations.
(2) Annualized.
7
<PAGE> 8
FINANCIAL HIGHLIGHTS (Continued)
(FOR AN INVESTOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NORTH CAROLINA
PENNSYLVANIA MUNICIPAL MONEY
MUNICIPAL MONEY MARKET PORTFOLIO
MARKET PORTFOLIO ----------------
-------------------- INVESTOR A
INVESTOR A SHARES SHARES
-------------------- ----------------
<S> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
FOR THE FOR THE
PERIOD PERIOD
YEAR 12/28/93(1) 2/14/95(1)
ENDED THROUGH THROUGH
9/30/95 9/30/94 9/30/95
-------- -------- ----------------
<S> <C> <C> <C>
Net asset value at beginning of period....................................... $ 1.00 $ 1.00 $ 1.00
-------- -------- --------
Income from investment operations
Net investment income.................................................... 0.0302 0.0153 0.0194
Net realized gain (loss) on investments.................................. -- -- --
-------- -------- --------
Total from investment operations.................................... 0.0302 0.0153 0.0194
-------- -------- --------
Less distributions
Distributions from net investment income................................. (0.0302) (0.0153) (0.0194)
Distributions from net realized capital gains............................ -- -- --
-------- -------- --------
Total distributions................................................. (0.0302) (0.0153) (0.0194)
-------- -------- --------
Net asset value at end of period............................................. $ 1.00 $ 1.00 $ 1.00
======== ======== ========
Total return................................................................. 3.06% 1.58% 1.95%
Ratios/Supplemental data
Net assets at end of period (in thousands)............................... $ 750 $ 139 $ 53
Ratios of expenses to average net assets
After advisory/administration fee waivers.............................. 0.82% 0.65%(2) 0.83%(2)
Before advisory/administration fee waivers............................. 1.24% 1.22%(2) 1.36%(2)
Ratios of net investment income to average net assets
After advisory/administration fee waivers.............................. 3.03% 2.11%(2) 3.05%(2)
Before advisory/administration fee waivers............................. 2.61% 1.54%(2) 2.52%(2)
</TABLE>
- -------------
(1) Commencement of operations.
(2) Annualized.
8
<PAGE> 9
FINANCIAL HIGHLIGHTS (Continued)
(FOR AN INVESTOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NEW JERSEY MUNICIPAL
MONEY MARKET PORTFOLIO+
-------------------------
INVESTOR A SHARES
-------------------------
FOR THE PERIOD
1/16/96(1) THROUGH
1/31/96
-------------------------
<S> <C>
Net asset value at beginning of period........................................................... $ 1.00
--------
Income from investment operations
Net investment income........................................................................ 0.00
Net realized gain (loss) on investments...................................................... --
--------
Total from investment operations........................................................ 0.00
--------
Less distributions
Distributions from net investment income..................................................... 0.00
Distributions from net realized capital gains................................................ --
--------
Total distributions..................................................................... 0.00
--------
Net asset value at end of period................................................................. $ 1.00
=======================
Total return..................................................................................... 2.66%(2)
Ratios/Supplemental data
Net assets at end of period (in thousands)................................................... $21,662
Ratios of expenses to average net assets
After advisory/administration fee waivers.................................................. 0.71%(2)
Before advisory/administration fee waivers................................................. 1.20%(2)
Ratios of net investment income to average net assets
After advisory/administration fee waivers.................................................. 2.66%(2)
Before advisory/administration fee waivers................................................. 2.17%(2)
</TABLE>
- -------------
+ The Portfolio commenced operations on July 1, 1991 as the New Jersey
Municipal Money Market Fund, a separate investment portfolio (the
"Predecessor New Jersey Municipal Money Market Portfolio") of Compass
Capital Group, which was organized as a Massachusetts business trust. On
January 13, 1996, the assets and liabilities of the Predecessor New Jersey
Municipal Money Market Portfolio were transferred to this Portfolio, and
were combined with the assets of a pre-existing portfolio of investments
maintained by the Fund.
(1) Commencement of operations of Investor A Class. Prior to its transfer to the
Fund, the Predecessor New Jersey Municipal Money Market Portfolio offered
one class of shares, which is now known as the Service Class.
(2) Annualized.
9
<PAGE> 10
WHAT ARE THE PORTFOLIOS?
- --------------------------------------------------------------------------------
MUNICIPAL PORTFOLIOS
The investment objective of the New Jersey Municipal Money Market
Portfolio, North Carolina Municipal Money Market Portfolio, Ohio Municipal Money
Market Portfolio, Pennsylvania Municipal Money Market Portfolio and Virginia
Municipal Money Market Portfolio is, for each Portfolio, to seek as high a level
of current income exempt from Federal, and to the extent possible, state income
tax of the specific state in which a Portfolio concentrates, as is consistent
with maintaining liquidity and stability of principal. The Portfolios pursue
this objective by investing substantially all of their assets in short-term
obligations issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia, and their political subdivisions,
agencies, instrumentalities and authorities ("Municipal Obligations").
The Portfolios seek to achieve their investment objectives by primarily
investing in:
(A) fixed and variable rate notes and similar debt instruments rated
MIG-2, VMIG-2 or Prime-2 or higher by Moody's Investors Service,
Inc. ("Moody's"), SP-2 or A-2 or higher by Standard & Poor's Ratings
Group ("S&P"), AA or higher by Duff & Phelps Credit Co. ("D&P") or
F-2 or higher by Fitch Investors Service, Inc. ("Fitch");
(B) tax-exempt commercial paper and similar debt instruments rated
Prime-2 or higher by Moody's, A-2 or higher by S&P, Duff 2 or higher
by D&P or F-2 or higher by Fitch;
(C) municipal bonds rated Aa or higher by Moody's or AA or higher by
S&P, D&P or Fitch;
(D) unrated notes, paper or other instruments that are of comparable
quality as determined by the Portfolios' sub-adviser under
guidelines established by the Fund's Board of Trustees; and
(E) municipal bonds and notes which are guaranteed as to principal and
interest by the U.S. Government or an agency or instrumentality
thereof or which otherwise depend directly or indirectly on the
credit of the United States.
During normal market conditions, at least 80% of each Portfolio's net
assets will be invested in securities which are Municipal Obligations. In
addition, under normal conditions each Portfolio intends to invest at least 65%
of its net assets in Municipal Obligations of issuers located in the particular
state indicated by its name ("State-Specific Obligations"). During temporary
defensive periods, each Portfolio may invest without limitation in obligations
that are not Municipal Obligations and may hold without limitation uninvested
cash reserves.
Each Portfolio may invest without limitation in private activity bonds the
interest on which is an item of tax preference for purposes of the Federal
alternative minimum tax ("AMT Paper"). Interest on AMT Paper that is received by
taxpayers subject to the Federal alternative minimum tax is taxable.
Each Portfolio may invest 25% or more of its net assets in Municipal
Obligations the interest on which is paid solely from revenues of similar
projects. To the extent a Portfolio's assets are invested in Municipal
Obligations payable from the revenues of similar projects or are invested in
private activity bonds, the Portfolio will be subject to the peculiar risks
presented by the laws and economic conditions relating to such projects and
bonds to a greater extent than it would be if its assets were not so invested.
10
<PAGE> 11
------------------------------------
QUALITY, MATURITY AND DIVERSIFICATION
All securities acquired by the Portfolios will be determined at the time of
purchase by the Portfolios' sub-adviser, under guidelines established by the
Fund's Board of Trustees, to present minimal credit risks and will be "Eligible
Securities" as defined by the SEC. Eligible Securities are (a) securities that
either (i) have short-term debt ratings at the time of purchase in the two
highest rating categories by at least two unaffiliated nationally recognized
statistical rating organizations ("NRSROs") (or one NRSRO if the security is
rated by only one NRSRO), or (ii) are comparable in priority and security with
an instrument issued by an issuer which has such ratings, and (b) securities
that are unrated (including securities of issuers that have long-term but not
short-term ratings) but are of comparable quality as determined in accordance
with guidelines approved by the Board of Trustees.
Each Portfolio is managed so that the average maturity of all instruments
held by it (on a dollar-weighted basis) will not exceed 90 days. In no event
will a Portfolio purchase securities which mature more than 397 days from the
date of purchase (except for certain variable and floating rate instruments and
securities collateralizing repurchase agreements). Securities in which the
Portfolios invest may not earn as high a level of income as longer term or lower
quality securities, which generally have greater market risk and more
fluctuation in market value.
The Portfolios are classified as non-diversified portfolios, under the
Investment Company Act of 1940 (the "1940 Act"). Investment returns on a
non-diversified portfolio typically are dependent upon the performance of a
smaller number of securities relative to the number held in a diversified
portfolio. Consequently, the change in value of any one security may affect the
overall value of a non-diversified portfolio more than it would a diversified
portfolio.
WHAT ADDITIONAL INVESTMENT POLICIES AND RISKS APPLY?
- --------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS. The two principal classifications of Municipal
Obligations are "general obligation" securities and "revenue" securities.
General obligation securities are secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of principal and interest.
Revenue securities are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Revenue securities include private activity bonds which
are not payable from the unrestricted revenues of the issuer. Consequently, the
credit quality of private activity bonds is usually directly related to the
credit standing of the corporate user of the facility involved. Municipal
Obligations may also include "moral obligation" bonds, which are normally issued
by special purpose public authorities. If the issuer of moral obligation bonds
is unable to meet its debt service obligations from current revenues, it may
draw on a reserve fund, the restoration of which is a moral commitment but not a
legal obligation of the state or municipality which created the issuer.
Also included within the general category of Municipal Obligations are
participation certificates in a lease, an installment purchase contract, or a
conditional sales contract ("lease obligations") entered into by a state or
political subdivision to finance the acquisition or construction of equipment,
land or facilities. Although lease obligations are not general obligations of
the issuer for which the state or other governmental body's unlimited taxing
power is pledged, certain lease obligations are backed by a covenant to
appropriate money to make the lease obligation payments. However, under certain
lease obligations, the state or governmental body has no obligation to make
these payments in future years unless money is appropriated on a yearly basis.
Although "non-appropriation" lease obligations are
11
<PAGE> 12
secured by the leased property, disposition of the property in the event of
foreclosure might prove difficult. These securities represent a relatively new
type of financing that is not yet as marketable as more conventional securities.
Each Portfolio may acquire "stand-by commitments" with respect to Municipal
Obligations held by it. Under a stand-by commitment, a dealer agrees to purchase
at the Portfolio's option specific Municipal Obligations at a specified price.
The acquisition of a stand-by commitment may increase the cost, and thereby
reduce the yield, of the Municipal Obligation to which such commitment relates.
Each Portfolio will acquire stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its rights thereunder for trading
purposes.
The amount of information regarding the financial condition of issuers of
Municipal Obligations may not be as extensive as that which is made available by
public corporations, and the secondary market for Municipal Obligations may be
less liquid than that for taxable obligations. Accordingly, the ability of a
Portfolio to buy and sell tax-exempt securities may, at any particular time and
with respect to any particular securities, be limited.
The Portfolios may invest in tax-exempt derivative securities relating to
Municipal Obligations, including tender option bonds, participations, beneficial
interests in trusts and partnership interests.
Opinions relating to the validity of Municipal Obligations and to the
exemption of interest thereon from Federal or state income tax are rendered by
counsel to the respective issuers or sponsors at the time of issuance. The Fund
and its investment adviser will rely on such opinions and will not review
independently the underlying proceedings relating to the issuance of Municipal
Obligations or the bases for such opinions.
CORPORATE AND BANK OBLIGATIONS. To the extent consistent with their
respective investment objectives, the Portfolios may invest in debt obligations
of domestic or foreign corporations and banks, and may acquire commercial
obligations issued by Canadian corporations and Canadian counterparts of U.S.
corporations, as well as Europaper, which is U.S. dollar-denominated commercial
paper of a foreign issuer. Bank obligations may include certificates of deposit,
notes, bankers' acceptances and fixed time deposits. These obligations may be
general obligations of the parent bank or may be limited to the issuing branch
or subsidiary by the terms of the specific obligation or by government
regulation. The Money Market Portfolio may also make interest-bearing savings
deposits in commercial and savings banks in amounts not in excess of 5% of its
total assets. For purposes of determining the permissibility of an investment in
bank obligations, the total assets of a bank are determined on the basis of the
bank's most recent annual financial statements.
Commercial paper issues include securities issued by corporations without
registration under the Securities Act of 1933 (the "1933 Act") in reliance on
the exemption in Section 3(a)(3), and commercial paper issued in reliance on the
so-called "private placement" exemption in Section 4(2) ("Section 4(2) paper").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws in that any resale must similarly be made in an exempt transaction. Section
4(2) paper is normally resold to other institutional investors through or with
the assistance of investment dealers which make a market in Section 4(2) paper,
thus providing liquidity.
U.S. GOVERNMENT OBLIGATIONS. The Portfolios may also purchase obligations
issued or guaranteed by the U.S. Government or its agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government are backed by the full faith and credit of the United States.
Others are backed by the right of the issuer to borrow from the U.S. Treasury or
are backed only by the credit of the agency or instrumentality issuing the
obligation.
MORTGAGE-RELATED SECURITIES. Although under normal market conditions they
do not expect to do so, each Portfolio may invest in mortgage-related securities
issued by the U.S. Government or its agencies or instrumentalities or issued by
private companies. Mortgage-related securities may include collateralized
mortgage obligations ("CMOs") issued by the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation or other U.S. Government
agencies or instrumentalities or issued by private companies. The average life
of mortgage-related
12
<PAGE> 13
securities is likely to be less than the original maturity of the mortgage pools
underlying the securities as a result of mortgage prepayments. For this and
other reasons, a mortgage-related security's stated maturity may be shortened
and, therefore, it may be difficult to predict precisely the security's total
return to the particular Portfolio. In addition, in periods of falling interest
rates, the rate of mortgage prepayments tends to increase. During such periods,
the reinvestment of prepayment proceeds by the particular Portfolio will
generally be at lower rates than the rates on the prepaid obligations.
VARIABLE AND FLOATING RATE INSTRUMENTS. Each Portfolio may purchase rated
and unrated variable and floating rate instruments, which may have a stated
maturity in excess of 13 months but will, in any event, permit a Portfolio to
demand payment of the principal of the instrument at least once every 13 months
upon not more than thirty days' notice (unless the instrument is guaranteed by
the U.S. Government or an agency or instrumentality thereof). These instruments
may include variable amount master demand notes that permit the indebtedness
thereunder to vary in addition to providing for periodic adjustments in the
interest rate. Issuers of unrated variable and floating rate instruments must
satisfy the same criteria as set forth above for the particular Portfolio.
REPURCHASE AGREEMENTS. Each Portfolio may agree to purchase securities from
broker-dealers and financial institutions subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). The
securities held subject to a repurchase agreement may have stated maturities
exceeding 13 months, so long as the repurchase agreement itself matures in less
than 13 months. Default by or bankruptcy of the seller would, however, expose
the Portfolio to possible loss because of adverse market action or delays in
connection with the disposition of the underlying obligations.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS. Each Portfolio may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"forward commitment" basis. These transactions involve a commitment by a
Portfolio to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), and permit a
Portfolio to lock in a price or yield on a security it owns or intends to
purchase, regardless of future changes in interest rates. When-issued and
forward commitment transactions involve the risk, however, that the price or
yield obtained in a transaction may be less favorable than the price or yield
available in the market when the delivery takes place.
SECURITIES LENDING. A Portfolio may seek additional income by lending
securities on a short-term basis. The securities lending agreements will require
that the loans be secured by collateral in cash, U.S. Government securities or
irrevocable bank letters of credit maintained on a current basis equal in value
to at least the market value of the loaned securities. A Portfolio may not make
such loans in excess of 33 1/3% of the value of its total assets. Securities
loans involve risks of delay in receiving additional collateral or in recovering
the loaned securities, or possibly loss of rights in the collateral if the
borrower of the securities becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. Each Portfolio may enter into reverse
repurchase agreements for temporary purposes (such as to obtain cash to meet
redemption requests when the liquidation of portfolio securities is deemed
disadvantageous or inconvenient). A reverse repurchase agreement involves a sale
by a Portfolio of securities that it holds concurrently with an agreement by the
Portfolio to repurchase the same securities at an agreed-upon price and date.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by a Portfolio may decline below the price of the securities the
Portfolio is obligated to repurchase.
INVESTMENT COMPANIES. In connection with the management of their daily cash
positions, each Portfolio may invest in securities issued by other investment
companies which invest in short-term, high quality debt securities and which
determine their net asset value per share based on the amortized cost or
penny-rounding method of valuation. Securities of other investment companies
will be acquired by a Portfolio within the limits prescribed by the 1940 Act. As
a shareholder of another investment company, a Portfolio would bear, along with
other shareholders, its pro rata portion
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<PAGE> 14
of the other investment company's expenses, including advisory fees. These
expenses would be in addition to the advisory fees and other expenses the
Portfolio bears directly in connection with its own operations.
UNINVESTED CASH RESERVES. Each Portfolio may hold uninvested cash reserves
pending investment during temporary defensive periods or if, in the opinion of
the Portfolios' sub-adviser, suitable obligations are unavailable. During normal
market periods, no more than 20% of a Portfolio's assets will be held
uninvested. Uninvested cash reserves will not earn income.
ILLIQUID SECURITIES. No Portfolio will knowingly invest more than 10% of
the value of its net assets in securities that are illiquid. Variable and
floating rate instruments that cannot be disposed of within seven days,
repurchase agreements and time deposits that do not provide for payment within
seven days after notice, without taking a reduced price, are subject to this 10%
limit. Each Portfolio may purchase securities which are not registered under the
1933 Act but which can be sold to "qualified institutional buyers" in accordance
with Rule 144A under the 1933 Act. These securities will not be considered
illiquid so long as the sub-adviser determines, acting under guidelines approved
and monitored by the Board, that an adequate trading market exists for that
security. This investment practice could have the effect of increasing the level
of illiquidity in a Portfolio during any period that qualified institutional
buyers become uninterested in purchasing these restricted securities.
ADDITIONAL RISK CONSIDERATIONS. The concentration of investments by the
Portfolios in State-Specific Obligations raises special investment
considerations. Changes in the economic condition and governmental policies of a
state and its political subdivisions could adversely affect the value of a
Portfolio's shares.
Certain matters relating to the states in which the Portfolios invest are
described below. For further information, see "Special Considerations Regarding
State-Specific Obligations" in the Statement of Additional Information.
OHIO. While diversifying more into the service and other non-manufacturing
areas, the economy of Ohio continues to rely in part on durable goods
manufacturing largely concentrated in motor vehicles and equipment, steel,
rubber products and household appliances. As a result, general economic activity
in Ohio, as in many other industrially developed states, tends to be more
cyclical than in some other states and in the nation as a whole. Agriculture is
an important segment of the Ohio economy with over half the State's area devoted
to farming and approximately 15% of total employment in agribusiness. In prior
years, the State's overall unemployment rate was commonly somewhat higher than
the national figure. For example, the reported 1990 average monthly State rate
was 5.7%, compared to the 5.5% national figure. However, for the last four years
the State rates were below the national rates (5.5% versus 6.1% in 1994). The
unemployment rate and its effects vary among particular geographic areas of the
State. There can be no assurance that future national, regional or state-wide
economic difficulties and the resulting impact on State or local government
finances generally will not adversely affect the market value of Ohio Municipal
Obligations held in the Portfolio or the ability of particular obligors to make
timely payments of debt service on (or lease payments relating to) those
obligations.
PENNSYLVANIA. Although the General Fund of the Commonwealth (the principal
operating fund of the Commonwealth) experienced deficits in fiscal 1990 and
1991, tax increases and spending decreases resulted in surpluses the following
three years; as of June 30, 1994, the General Fund has a surplus of $892.9
million. The deficit in the Commonwealth's unreserved/undesignated funds also
has been eliminated, and there was a surplus of $79.2 million as of June 30,
1994. Rising unemployment, a relatively high proportion of persons 65 and older
in the Commonwealth and court ordered increases in healthcare reimbursement
rates place increased pressures on the tax resources of the Commonwealth and its
municipalities. The Commonwealth has sold a substantial amount of bonds over the
past several years, but the debt burden remains moderate. The recession has
affected Pennsylvania's economic base, with income and job growth at levels
below national averages. Employment growth has shifted to the trade and service
14
<PAGE> 15
sectors, with losses in more high-paid manufacturing positions. A new governor
took office in January 1995, but the Commonwealth is likely to continue to show
fiscal restraint.
NORTH CAROLINA. Growth of North Carolina tax revenues slowed considerably
during fiscal 1990-92 requiring tax increases and budget adjustments, including
hiring freezes and restrictions, spending constraints, changes in the timing of
certain collections and payments, and other short-term budget adjustments, that
were needed to comply with North Carolina's constitutional mandate for a
balanced budget. Fiscal years 1993, 1994 and 1995, however, ended with a
positive General Fund balance each year. By law, 25% of such positive fund
balance was required to be reserved in the General Fund of North Carolina as
part of a "Savings Reserve" (subject to a maximum reserve of 5% of the preceding
fiscal year's operating appropriation). An additional portion of such positive
fund balance was reserved in the General Fund as part of a "Reserve for Repair
and Renovation of State Facilities," leaving the remaining unrestricted fund
balance at the end of each such year available for future appropriations.
VIRGINIA. Because of Northern Virginia, with its proximity to Washington,
DC and Hampton Roads, which has the nation's largest concentration of military
installations, the Federal government has a greater impact on Virginia relative
to its size than any states other than Alaska and Hawaii. Virginia's economy has
continued to grow over the last decade, and while per capita income has grown
both faster and slower than the U.S. average from year to year, per capita
income continues to be above the national average. Virginia's unreserved general
fund balances have continued to grow in recent years from a low in 1991. The
Virginia Constitution requires a balanced budget and, since 1993, the funding of
a Revenue Stabilization Fund. Current debt levels are well below limits
established by the Constitution.
NEW JERSEY. The State of New Jersey generally has a diversified economic
base consisting of, among others, commerce and service industries, selective
commercial agriculture, insurance, tourism, petroleum refining and
manufacturing, although New Jersey's manufacturing industry has experienced a
downward trend in the last few years. New Jersey is a major recipient of Federal
assistance and, of all the states, is among the highest in the amount of Federal
aid received. Therefore, a decrease in Federal financial assistance may
adversely affect the financial condition of New Jersey and its political
subdivisions and instrumentalities. While New Jersey's economic base has become
more diversified over time and thus its economy appears to be less vulnerable
during recessionary periods, a recurrence of high levels of unemployment could
adversely affect New Jersey's overall economy and the ability of New Jersey and
its political subdivisions and instrumentalities to meet their financial
obligations. In addition, New Jersey maintains a balanced budget which restricts
total appropriation increases to only 5% annually with respect to any
municipality or county, the balanced budget plan may actually adversely affect a
particular municipality's or county's ability to repay its obligations.
WHAT ARE THE PORTFOLIOS' FUNDAMENTAL INVESTMENT LIMITATIONS?
- --------------------------------------------------------------------------------
A Portfolio's investment objective and policies may be changed by the
Fund's Board of Trustees without shareholder approval. However, shareholders
will be given at least 30 days' notice before any such change. No assurance can
be provided that a Portfolio will achieve its investment objective.
Each Portfolio has also adopted certain fundamental investment limitations
that may be changed only with the approval of a "majority of the outstanding
shares of a Portfolio" (as defined in the Statement of Additional Information).
Several of the Portfolios' fundamental investment policies, which are set forth
in full in the Statement of Additional Information, are summarized below.
15
<PAGE> 16
NO PORTFOLIO MAY:
1. invest 25% or more of its total assets in one or more issuers
conducting their principal business activities in the same industry;
2. borrow money except for temporary purposes in amounts up to
one-third of the value of its total assets at the time of such borrowing.
Whenever borrowings exceed 5% of a Portfolio's total assets, the Portfolio
will not make any additional investments; and
3. invest less than 80% of its net assets in instruments the interest
on which is exempt from regular Federal income tax or in instruments which
are subject to AMT, except during defensive periods or during periods of
unusual market conditions.
As a non-fundamental investment restriction, each Portfolio will not hold
any securities (except U.S. Government securities and related repurchase
agreements) that would cause, at the end of any tax quarter, more than 5% of its
total assets to be invested in securities of any one issuer, except that up to
50% of a Portfolio's total assets may be invested without regard to this
limitation so long as no more than 25% of the Portfolio's total assets are
invested in any one issuer (except U.S. Government securities and related
repurchase agreements).
The investment limitations stated above are applied at the time investment
securities are purchased.
In order to permit the sale of its shares in certain states, the Fund may
make commitments more restrictive than the investment policies and limitations
described in this Prospectus. If the Fund determines that any commitment is no
longer in the best interests of a Portfolio, it will revoke the commitment by
terminating sales of shares of the Portfolio in the state involved.
WHO MANAGES THE FUND?
- --------------------------------------------------------------------------------
BOARD OF TRUSTEES
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees. The following individuals were elected by shareholders
on January 4, 1996 to serve as trustees of Compass Capital Funds:
WILLIAM O. ALBERTINI--Executive Vice President and Chief Financial Officer
of Bell Atlantic Corporation.
RAYMOND J. CLARK--Treasurer of Princeton University.
ROBERT M. HERNANDEZ--Vice Chairman and Chief Financial Officer of USX
Corporation.
ANTHONY M. SANTOMERO--Deputy Dean of The Wharton School, University of
Pennsylvania.
DAVID R. WILMERDING, JR.--President of Gates, Wilmerding, Carper &
Rawlings, Inc.
INVESTMENT ADVISER AND SUB-ADVISER
The Adviser to Compass Capital Funds is PNC Asset Management Group, Inc.
("PAMG"). PAMG was organized in 1994 to perform advisory services for investment
companies, and has its principal offices at 1835 Market Street, Philadelphia,
Pennsylvania 19103. PAMG is an indirect wholly-owned subsidiary of PNC Bank
Corp., a multi-bank holding company. PNC Institutional Management Corporation
("PIMC"), a wholly-owned subsidiary of PAMG, serves as each Portfolio's
sub-adviser. PIMC's principal business address is 400 Bellevue Parkway,
Wilmington, Delaware 19809.
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<PAGE> 17
As adviser, PAMG is responsible for the overall investment management of
the Portfolios. As sub-adviser, PIMC is responsible for the day-to-day
management of the Portfolios, and generally makes all purchase and sale
investment decisions for the Portfolios. PIMC also provides research and credit
analysis. Portfolio transactions for a Portfolio may be directed through
broker/dealers who sell Fund shares, subject to the requirements of best
execution.
For their investment advisory and sub-advisory services, PAMG and PIMC are
entitled to fees, computed daily on a Portfolio-by-Portfolio basis and payable
monthly, at the annual rates set forth below. All sub-advisory fees payable to
PIMC are paid by PAMG, and do not represent an extra charge to the Portfolios.
MAXIMUM ANNUAL CONTRACTUAL FEE RATE
FOR EACH PORTFOLIO (BEFORE WAIVERS)
<TABLE>
<CAPTION>
INVESTMENT SUB-ADVISORY
AVERAGE DAILY NET ASSETS ADVISORY FEE FEE
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
first $1 billion..................................................... .450% .400%
$1 billion - $2 billion.............................................. .400 .350
$2 billion - $3 billion.............................................. .375 .325
greater than $3 billion.............................................. .350 .300
</TABLE>
For more information about the advisory fees the Portfolios expect to pay
for the current fiscal year, see "What Are the Expenses of the Portfolios?" For
the fiscal year ended September 30, 1995, the Portfolios (other than the New
Jersey Municipal Money Market Portfolio) paid investment advisory fees at the
following annual rates (expressed as a percentage of average daily net assets)
after voluntary fee waivers: Ohio Municipal Money Market Portfolio, .07%;
Pennsylvania Municipal Money Market Portfolio, .09%; North Carolina Municipal
Money Market Portfolio, .05%; and Virginia Municipal Money Market Portfolio, 0%.
For the period from March 1, 1995 through January 13, 1996, the Predecessor New
Jersey Municipal Money Market Portfolio (as defined on page 9) paid investment
advisory fees, after voluntary fee waivers, to its former adviser pursuant to
the investment advisory agreement then in effect at the annual rate of 0.40% of
its average daily net assets. For the period from January 13, 1996 through
January 31, 1996, the New Jersey Municipal Money Market Portfolio paid
investment advisory fees, after voluntary fee waivers, at the annual rate of
0.06% of its average daily net assets.
------------------------------------
ADMINISTRATORS
Compass Capital Group, Inc. ("CCG"), PFPC Inc. ("PFPC"), and Compass
Distributors, Inc. ("CDI") (the "Administrators") serve as the Fund's
co-administrators. CCG and PFPC are indirect wholly-owned subsidiaries of PNC
Bank Corp. CDI is a wholly-owned subsidiary of Provident Distributors, Inc.
("PDI"). A majority of the outstanding stock of PDI is owned by its officers and
the remaining outstanding stock is owned by Pennsylvania Merchant Group Ltd.
The Administrators generally assist the Fund in all aspects of its
administration and operation, including matters relating to the maintenance of
financial records and fund accounting. As compensation for these services, CCG
is entitled to receive a fee, computed daily and payable monthly, at an annual
rate of .03% of each Portfolio's average daily net assets, and PFPC and CDI are
entitled to receive a combined fee, computed daily and payable monthly, at an
annual rate of .15% of the first $500 million of each Portfolio's average daily
net assets, .13% of the next $500 million of each Portfolio's average daily net
assets, .11% of the next $1 billion of each Portfolio's average daily net assets
and
17
<PAGE> 18
.10% of each Portfolio's average daily net assets in excess of $2 billion. From
time to time the Administrators may waive some or all of their administration
fees from a Portfolio.
For information about the operating expenses the Portfolios expect to pay
for the current fiscal year, see "What Are The Expenses Of The Portfolios?"
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN
PNC Bank serves as the Portfolios' custodian and PFPC serves as their
transfer agent and dividend disbursing agent.
------------------------------------
DISTRIBUTION AND SERVICE PLAN
Under the Fund's Distribution and Service Plan (the "Plan"), Investor
Shares of the Portfolios bear the expense of payments ("distribution fees") made
to CDI, as the Fund's distributor (the "Distributor"), or affiliates of PNC
Bank, National Association ("PNC Bank") for distribution and sales support
services. The distribution fees will be used primarily to compensate the
Distributor for distribution services and to compensate the Distributor and PNC
Bank affiliates for sales support services provided in connection with the
offering and sale of Investor Shares. The distribution fees may also be used to
reimburse the Distributor and PNC Bank affiliates for related expenses,
including payments to brokers, dealers, financial institutions and industry
professionals ("Service Organizations") for sales support services and related
expenses. Janney Montgomery Scott, 1801 Market Street, Philadelphia, PA
19103-1675, will act as Service Organization for the Investor A Shares offered
by this Prospectus. Distribution fees payable under the Plan will not exceed
.10% (annualized) of the average daily net asset value of each Portfolio's
outstanding Investor A Shares. Payments under the Plan are not tied directly to
out-of-pocket expenses and therefore may be used by the recipients as they
choose (for example, to defray their overhead expenses).
Under the Plan, the Fund intends to enter into service agreements with
Service Organizations (including PNC Bank and its affiliates) with respect to
each class of Investor Shares pursuant to which Service Organizations will
render certain support services to their customers who are the beneficial owners
of Investor Shares. In consideration for a shareholder servicing fee of up to
.25% (annualized) of the average daily net asset value of Investor Shares owned
by their customers, Service Organizations may provide one or more of the
following services: responding to customer inquiries relating to the services
performed by the Service Organization and to customer inquiries concerning their
investments in Investor Shares; providing information periodically to customers
showing their positions in Investor Shares; and other similar shareholder
liaison services. In consideration for a separate shareholder processing fee of
up to .15% (annualized) of the average daily net asset value of Investor Shares
owned by their customers, Service Organizations may provide one or more of these
additional services to such customers: processing purchase and redemption
requests from customers and placing orders with the Fund's transfer agent or the
Distributor; processing dividend payments from the Fund on behalf of customers;
providing sub-accounting with respect to Investor Shares beneficially owned by
customers or the information necessary for sub-accounting; and other similar
services.
Service Organizations may charge their clients additional fees for account
services. Customers who are beneficial owners of Investor Shares should read
this Prospectus in light of the terms and fees governing their accounts with
Service Organizations.
The Glass-Steagall Act and other applicable laws, among other things,
prohibit banks from engaging in the business of underwriting securities. It is
intended that the services provided by Service Organizations under their service
18
<PAGE> 19
agreements will not be prohibited under these laws. However, state securities
laws may differ from the interpretations of Federal law on this issue, and banks
and financial institutions may be required to register as dealers pursuant to
state law.
------------------------------------
EXPENSES
Expenses are deducted from the total income of each Portfolio before
dividends and distributions are paid. Expenses include, but are not limited to,
fees paid to PAMG and the Administrators, transfer agency and custodian fees,
trustee fees, taxes, interest, professional fees, shareholder servicing and
processing fees, fees and expenses in registering and qualifying the Portfolios
and their shares for distribution under Federal and state securities laws,
expenses of preparing prospectuses and statements of additional information and
of printing and distributing prospectuses and statements of additional
information to existing shareholders, expenses relating to shareholder reports,
shareholder meetings and proxy solicitations, insurance premiums, the expense of
independent pricing services, and other expenses which are not expressly assumed
by PAMG or the Fund's service providers under their agreements with the Fund.
Any general expenses of the Fund that do not belong to a particular investment
portfolio will be allocated among all investment portfolios by or under the
direction of the Board of Trustees in a manner the Board determines to be fair
and equitable.
HOW ARE SHARES PURCHASED?
- --------------------------------------------------------------------------------
The following procedures are only applicable to purchases of shares by
investors establishing accounts through Janney Montgomery Scott ("JMS") and its
affiliates. Other investors should refer to the Fund's regular Prospectus for
information on purchasing shares.
INTRODUCTION
Investor A Shares are sold to the public and to Service Organizations (as
defined above) acting on behalf of their customers. See "Distribution and
Service Plan." JMS will act as Service Organization for its customers and
customers of its affiliates with respect to all shares offered by this
Prospectus.
Investor A Shares in the Portfolios may be purchased without a sales load
through an account maintained by the investor with JMS or its affiliate (a "JMS
Account") in accordance with procedures established in connection with the
requirements of the JMS Account. All purchase orders are transmitted by JMS
directly to PFPC, the Fund's transfer agent.
PURCHASES THROUGH A JMS ACCOUNT. Purchases of shares may be effected
through an investor's JMS Account through procedures established in connection
with the requirements of the JMS Account. In such event, beneficial ownership of
the shares will be recorded by JMS and will be reflected in the account
statements provided by JMS to such investors. JMS may impose minimum investor
account requirements. Although JMS does not impose a sales charge for purchases
of shares, depending on the terms of an investor's JMS Account, JMS may charge
an investor's JMS Account fees for automatic investment and other services
provided to the JMS Account. Information concerning JMS Account requirements,
services and charges should be obtained from JMS. This Prospectus should be read
in conjunction with any information received from JMS.
19
<PAGE> 20
JMS may offer investors the ability to purchase shares under an automatic
purchase program (a "Purchase Program") established by it. An investor who
participates in a Purchase Program will have his "free-credit" cash balances in
his JMS Account automatically invested in shares designated by the investor as
the "Primary Janney Class" for his Purchase Program. The frequency of
investments and the minimum investment requirement may be established by JMS and
the Fund. In addition, JMS may require a minimum amount of cash and/or
securities to be deposited in a JMS Account for participants in its Purchase
Program. The description of the particular JMS Purchase Program should be read
for details, and any inquiries concerning a JMS Account under a Purchase Program
should be directed to JMS. A participant in a Purchase Program may change the
designation of the Primary Janney Class at any time by so instructing JMS.
OTHER PURCHASE INFORMATION. Purchase orders for Investor A Shares of the
Portfolios that are in proper form are executed at their net asset value per
share next determined after receipt by the Fund, provided that JMS undertakes to
pay for an order in Federal funds by 4:00 p.m. (Eastern Time) the same Business
Day an order is placed. It is the responsibility of JMS to transmit orders
received by it from investors to the Fund's transfer agent in a timely manner.
Under certain circumstances, the Fund may reject large individual purchase
orders received after 12:00 noon. The Fund may in its discretion reject any
order for shares.
Shares of each Portfolio are sold on a continuous basis by CDI as the
Distributor. CDI maintains its principal offices at 259 Radnor-Chester Road,
Suite 120, Radnor, Pennsylvania 19087. Purchases may be effected on weekdays on
which both the New York Stock Exchange and the Federal Reserve Bank of
Philadelphia are open for business (a "Business Day"). Payment for orders which
are not received or accepted will be returned after prompt inquiry. The issuance
of shares is recorded on the books of the Fund. No certificates will be issued
for shares. Payments for shares of a Portfolio may, in the discretion of the
Fund's investment adviser, be made in the form of securities that are
permissible investments for that Portfolio. Compass Capital reserves the right
to reject any purchase order or to waive the minimum initial investment
requirement.
HOW ARE SHARES REDEEMED?
- --------------------------------------------------------------------------------
The following procedures are only applicable to redemptions of shares by
investors owning shares through a JMS Account. Other investors should refer to
the Fund's regular Prospectus for information on redeeming shares.
REDEMPTION OF SHARES IN A JMS ACCOUNT
Investors owning Shares through a JMS Account may redeem some or all of
their shares of the Portfolios in accordance with the procedures pertaining to
their JMS Accounts at any time. To do so, a written request in proper form must
be sent to JMS by mail at Janney Montgomery Scott, 1801 Market Street,
Philadelphia, PA 19103-1675. It is the responsibility of JMS to transmit
redemption orders to PFPC and to credit its customers' JMS Accounts with the
redemption proceeds on a timely basis. There is no charge for a redemption.
JMS will also redeem each day a sufficient number of shares to cover debit
balances created by transactions in the JMS Accounts or instructions for cash
disbursements. Shares will be redeemed on the same day that a transaction occurs
that results in such a debit balance or charge.
JMS reserves the right to waive or modify criteria for participation in a
JMS Account or to terminate participation in a JMS Account for any reason.
20
<PAGE> 21
PAYMENT OF REDEMPTION PROCEEDS. The redemption price for shares is their
net asset value per share next determined after the request for redemption is
transmitted by JMS and received in proper form by Compass Capital Funds c/o
PFPC, P.O. Box 8907, Wilmington, Delaware 19899-8907. While the Fund intends to
use its best efforts to maintain each Portfolio's net asset value per share at
$1.00, the proceeds paid on redemption may be more or less than the amount
invested depending on a share's net asset value at the time of redemption.
Payment for redeemed shares is normally made to JMS by Federal wire transfer or
by check mailed within seven days after acceptance by PFPC of the request and
any other necessary documents in proper order. Payment may, however, be
postponed or the right of redemption suspended as provided by the rules of the
SEC. It is the responsibility of JMS to credit its customers' JMS Accounts with
the redemption proceeds on a timely basis.
The Fund may also suspend the right of redemption or postpone the date of
payment upon redemption for such periods as are permitted under the 1940 Act,
and may redeem shares involuntarily or make payment for redemption in securities
or other property when determined appropriate in light of the Fund's
responsibilities under the 1940 Act. See "Purchase and Redemption Information"
in the Statement of Additional Information for examples of when such redemption
might be appropriate.
HOW IS NET ASSET VALUE CALCULATED?
- --------------------------------------------------------------------------------
Net asset value is calculated separately for each class of Investor Shares
of each Portfolio as of 12:00 noon (Eastern Time) and 4:00 p.m. (Eastern Time)
on each Business Day by dividing the value of all securities and other assets
owned by a Portfolio that are allocated to a particular class of shares, less
the liabilities charged to that class, by the number of shares of the class that
are outstanding.
Each Portfolio seeks to maintain a net asset value of $1.00 per share for
purposes of purchases and redemptions, and values its portfolio securities based
on the amortized cost method of valuation described in the Statement of
Additional Information under "Valuation of Shares." A Portfolio may use a
pricing service, bank or broker/dealer to value its securities.
HOW FREQUENTLY ARE DIVIDENDS AND DISTRIBUTIONS MADE TO INVESTORS?
- --------------------------------------------------------------------------------
Shareholders are entitled to dividends and distributions arising from the
net income and capital gains, if any, earned on investments held by the
Portfolio in which they invest. Each Portfolio's net income is declared daily as
a dividend. Shareholders whose purchase orders are executed at 12:00 noon
(Eastern Time) receive dividends for that day. On the other hand, shareholders
whose redemption orders have been received by 12:00 noon (Eastern Time) do not
receive dividends for that day, while shareholders of each Portfolio whose
redemption orders are received after 12:00 noon (Eastern Time) do receive
dividends for that day.
Dividends are paid monthly by check, or by wire transfer if requested in
writing by the shareholder, within five business days after the end of the
month. Net short-term capital gains, if any, will be distributed at least
annually. The period for which dividends are payable and the time for payment
are subject to change by the Fund's Board of Trustees. The Portfolios do not
expect to realize net long-term capital gains.
Dividends are reinvested in additional full and fractional Investor Shares
of the same class on which the dividends are paid, unless a shareholder elects
to receive dividends in cash. Such election, or any revocation thereof, must be
made in writing to PFPC, and will become effective with respect to dividends
paid after receipt by PFPC.
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<PAGE> 22
HOW ARE FUND DISTRIBUTIONS TAXED?
- --------------------------------------------------------------------------------
Each Portfolio intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). If a
Portfolio qualifies, it generally will be relieved of Federal income tax on
amounts distributed to shareholders, but shareholders, unless otherwise exempt,
will pay income or capital gains taxes on distributions (except distributions
that are "exempt interest dividends" or are treated as a return of capital),
whether the distributions are paid in cash or reinvested in additional shares.
Distributions paid out of a Portfolio's "net capital gain" (the excess of
net long-term capital gain over net short-term capital loss), if any, will be
taxed to shareholders as long-term capital gain regardless of the length of time
a shareholder holds the shares. All other distributions, to the extent taxable,
are taxed to shareholders as ordinary income.
Each Portfolio intends to pay substantially all of its dividends as "exempt
interest dividends." However, taxpayers are required to report the receipt of
"exempt interest dividends" on their Federal income tax returns for
informational purposes and in two circumstances such amounts, while exempt from
regular Federal income tax, are taxable to persons subject to alternative
minimum and environmental taxes. First, "exempt interest dividends" derived from
certain private activity bonds generally will constitute an item of tax
preference for taxpayers in determining alternative minimum tax liability.
Second, all "exempt interest dividends" must be taken into account by corporate
taxpayers in determining certain adjustments for alternative minimum and
environmental tax purposes. In addition, investors should be aware of the
possibility of state and local alternative minimum or minimum income tax
liability on interest from private activity bonds. Shareholders who are
recipients of Social Security Act or Railroad Retirement Act benefits should
note that "exempt interest dividends" will be taken into account in determining
the taxability of their benefit payments.
Each Portfolio will determine annually the percentages of its net
investment income which are exempt from the regular Federal income tax, which
constitute an item of tax preference for Federal alternative minimum tax
purposes, and which are fully taxable. These percentages will apply uniformly to
all distributions from net investment income during that year and may differ
significantly from the actual percentages for any particular day.
The Fund will send written notices to shareholders annually regarding the
tax status of distributions made by each Portfolio. Dividends declared in
October, November or December of any year payable to shareholders of record on a
specified date in those months will be deemed to have been received by the
shareholders on December 31 of such year, if the dividends are paid during the
following January.
This is not an exhaustive discussion of applicable tax consequences, and
investors may wish to contact their tax advisers concerning investments in the
Portfolios. Except as discussed below, dividends paid by each Portfolio may be
taxable to investors under state or local law as dividend income even though all
or a portion of such dividends may be derived from interest on obligations
which, if realized directly, would be exempt from such income taxes. In
addition, shareholders who are non-resident alien individuals, foreign trusts or
estates, foreign corporations or foreign partnerships may be subject to
different Federal income tax treatment. Future legislative or administrative
changes or court decisions may materially affect the tax consequences of
investing in the Portfolios.
OHIO TAXES. Individuals and estates that are subject to Ohio personal
income tax or municipal or school district income taxes in Ohio will not be
subject to such taxes on distributions from the Ohio Municipal Money Market
Portfolio to the extent that such distributions are properly attributable to
interest on Ohio Municipal Obligations or obligations issued by the U.S.
Government, its agencies, instrumentalities or territories (if the interest on
such obligations is exempt from state income taxation under the laws of the
United States) ("U.S. Obligations"), if (a) the Portfolio continues to qualify
as a regulated investment company for Federal income tax purposes and (b) at all
times at least
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50% of the value of the total assets of the Portfolio consists of Ohio Municipal
Obligations or similar obligations of other states or their subdivisions.
Corporations that are subject to the Ohio corporation franchise tax will not
have to include distributions from the Ohio Municipal Money Market Portfolio in
their net income base for purposes of calculating their Ohio corporation
franchise tax liability to the extent that such distributions either constitute
exempt-interest dividends for Federal income tax purposes or are properly
attributable to interest on Ohio Municipal Obligations or U.S. Obligations.
However, shares of the Ohio Municipal Money Market Portfolio will be included in
a corporation's net worth base for purposes of calculating the Ohio corporation
franchise tax. Distributions properly attributable to gain on the sale, exchange
or other disposition of Ohio Municipal Obligations will not be subject to the
Ohio personal income tax, or municipal or school district income taxes in Ohio
and will not be included in the net income base of the Ohio corporation
franchise tax. Distributions attributable to other sources will be subject to
the Ohio personal income tax and the Ohio corporation franchise tax.
PENNSYLVANIA TAXES. Income received by a shareholder attributable to
interest realized by the Pennsylvania Municipal Money Market Portfolio from
Pennsylvania State-Specific Obligations or attributable to insurance proceeds on
account of such interest is not taxable to individuals, estates or trusts under
the Personal Income Tax (in the case of insurance proceeds, to the extent they
are exempt for Federal income tax purposes); to corporations under the Corporate
Net Income Tax (in the case of insurance proceeds, to the extent they are exempt
for Federal income tax purposes); nor to individuals under the Philadelphia
School District Net Investment Income Tax ("School District Tax").
Income received by a shareholder attributable to gain on the sale or other
disposition by the Portfolio of Pennsylvania State-Specific Obligations is
taxable under the Personal Income Tax, the Corporate Net Income Tax, and, unless
these assets were held by the Portfolio for more than six months, the School
District Tax.
This discussion does not address the extent, if any, to which shares of the
Pennsylvania Municipal Money Market Portfolio, and interest and gain earned by
the Portfolio, is subject to, or included in the measure of, special taxes
imposed by the Commonwealth of Pennsylvania on banks and other financial
institutions or with respect to any privilege, excise, franchise or other tax
imposed on business entities not discussed above (including the Corporate
Capital Stock/Foreign Franchise Tax.)
Shareholders of the Pennsylvania Municipal Money Market Portfolio are not
subject to the Pennsylvania County Personal Property Tax to the extent that the
Portfolio is comprised of Pennsylvania state-specific obligations and Federal
obligations (if the interest on such obligations is exempt from state and local
taxation under the laws of the United States).
NORTH CAROLINA TAXES. Interest received in the form of dividends from the
North Carolina Municipal Money Market Portfolio is exempt from North Carolina
state income tax to the extent the distributions represent interest on direct
obligations of the U.S. Government or North Carolina State-Specific Obligations.
Distributions derived from interest earned on obligations of political
subdivisions of Puerto Rico, Guam and the U.S. Virgin Islands, including the
governments thereof and their agencies, instrumentalities and authorities, are
also exempt from North Carolina state income tax. Distributions paid out of
interest earned on obligations that are merely backed or guaranteed by the U.S.
Government (e.g., GNMAs, FNMAs), on repurchase agreements collateralized by U.S.
Government securities or on obligations of other states (which the Portfolio may
acquire and hold for temporary or defensive purposes) are not exempt from North
Carolina state income tax.
Any distributions of net realized gain earned by the North Carolina
Municipal Money Market Portfolio on the sale or exchange of certain obligations
of the State of North Carolina or its subdivisions that were issued before July
1, 1995 will also be exempt from North Carolina income tax to the Portfolio's
shareholders. Distributions of gains earned by
23
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the North Carolina Municipal Money Market Portfolio on the sale or exchange of
all other obligations will be subject to North Carolina income tax.
VIRGINIA TAXES. Subject to the provisions discussed below, dividends paid
to shareholders by the Virginia Municipal Money Market Portfolio and derived
from interest on obligations of the Commonwealth of Virginia or of any political
subdivision or instrumentality of the Commonwealth or derived from interest or
dividends on obligations of the United States excludable from Virginia taxable
income under the laws of the United States, which obligations are issued in the
exercise of the borrowing power of the Commonwealth or the United States and are
backed by the full faith and credit of the Commonwealth or the United States,
will be exempt from the Virginia income tax. Dividends paid to shareholders by
the Portfolio and derived from interest on debt obligations of certain
territories and possessions of the United States (those issued by Puerto Rico,
the Virgin Islands and Guam) will be exempt from the Virginia income tax. To the
extent a portion of the dividends are derived from interest on debt obligations
other than those described above, such portion will be subject to the Virginia
income tax even though it may be excludable from gross income for Federal income
tax purposes.
Generally, dividends distributed to shareholders by the Portfolio and
derived from capital gains will be taxable to the shareholders. To the extent
any portion of the dividends are derived from taxable interest for Virginia
purposes or from net short-term capital gains, such portion will be taxable to
the shareholders as ordinary income. The character of long-term capital gains
realized and distributed by the Portfolio will flow through to its shareholders
regardless of how long the shareholders have held their shares. Capital gains
distributed to shareholders derived from Virginia obligations issued pursuant to
special Virginia enabling legislation which provides a specific exemption for
such gains will be exempt from Virginia income tax. Generally, interest on
indebtedness incurred by shareholders to purchase or carry shares of the
Portfolio will not be deductible for Virginia income tax purposes.
As a regulated investment company, the Portfolio may distribute dividends
that are exempt from the Virginia income tax to its shareholders if the
Portfolio satisfies all requirements for conduit treatment under Federal law
and, at the close of each quarter of its taxable year, at least 50% of the value
of its total assets consists of obligations the interest on which is exempt from
taxation under Federal law. If the Portfolio fails to qualify, no part of its
dividends will be exempt from the Virginia income tax.
When taxable income of a regulated investment company is commingled with
exempt income, all distributions of the income are presumed taxable to the
shareholders unless the portion of income that is exempt from Virginia income
tax can be determined with reasonable certainty and substantiated. Generally,
this determination must be made for each distribution to each shareholder. The
Virginia Department of Taxation has adopted a policy, however, of allowing
shareholders to exclude from their Virginia taxable income the exempt portion of
distributions from a regulated investment company even though the shareholders
receive distributions monthly but receive reports substantiating the exempt
portion of such distributions at less frequent intervals. Accordingly, if the
Portfolio receives taxable income, the Portfolio must determine the portion of
income that is exempt from Virginia income tax and provide such information to
the shareholders in accordance with the foregoing so that the shareholders may
exclude from Virginia taxable income the exempt portion of the distribution from
the Portfolio.
NEW JERSEY TAXES. It is anticipated that substantially all dividends paid
by the New Jersey Municipal Money Market Portfolio will not be subject to New
Jersey personal income tax. In accordance with the provisions of New Jersey law
as currently in effect, distributions paid by a "qualified investment fund" will
not be subject to the New Jersey personal income tax to the extent that the
distributions are attributable to income received as interest or gain from New
Jersey State-Specific Obligations, or as interest or gain from direct U.S.
Government obligations. Distributions by a qualified investment fund that are
attributable to most other sources will be subject to the New Jersey personal
income tax. To be classified as a qualified investment fund, at least 80% of the
Portfolio's investments must
24
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consist of New Jersey State-Specific Obligations or direct U.S. Government
obligations; it must have no investments other than interest-bearing
obligations, obligations issued at a discount, and cash and cash items
(including receivables); and it must satisfy certain reporting obligations and
provide certain information to its shareholders. Shares of the Portfolio are not
subject to property taxation by New Jersey or its political subdivisions.
The New Jersey personal income tax is not applicable to corporations. For
all corporations subject to the New Jersey Corporation Business Tax, dividends
and distributions from a "qualified investment fund" are included in the net
income tax base for purposes of computing the Corporation Business Tax.
Furthermore, any gain upon the redemption or sale of shares by a corporate
shareholder is also included in the net income tax base for purposes of
computing the Corporation Business Tax.
HOW IS THE FUND ORGANIZED?
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The Fund was organized as a Massachusetts business trust on December 22,
1988 and is registered under the 1940 Act as an open-end management investment
company. On January 12, 1996 the Fund changed its name from The PNC(R) Fund to
Compass Capital Funds. The Declaration of Trust authorizes the Board of Trustees
to classify and reclassify any unissued shares into one or more classes of
shares. Pursuant to this authority, the Trustees have authorized the issuance of
an unlimited number of shares in twenty-eight investment portfolios. Each
Portfolio offers five separate classes of shares--Institutional Shares, Service
Shares, Investor A Shares, Investor B Shares and Investor C Shares. This
prospectus relates only to Investor A Shares of the five money market portfolios
described herein.
Shares of each class bear their pro rata portion of all operating expenses
paid by a Portfolio, except transfer agency fees and amounts payable under the
Fund's Distribution and Service Plan. Because of these "class expenses," the
performance of a Portfolio's Institutional Shares is expected to be higher than
the performance of the Portfolio's Service Shares, and the performance of both
the Institutional Shares and Service Shares of a Portfolio is expected to be
higher than the performance of the Portfolio's three classes of Investor Shares.
The Fund offers various services and privileges in connection with its Investor
Shares that are not generally offered in connection with its Institutional and
Service Shares, including an automatic investment plan, automatic withdrawal
plan and checkwriting. For further information regarding the Fund's Service and
Institutional share classes, contact PFPC at (800) 441-7762.
Each share of a Portfolio has a par value of $.001, represents an interest
in that Portfolio and is entitled to the dividends and distributions earned on
that Portfolio's assets as are declared in the discretion of the Board of
Trustees. The Fund's shareholders are entitled to one vote for each full share
held and proportionate fractional votes for fractional shares held, and will
vote in the aggregate and not by class, except where otherwise required by law
or as determined by the Board of Trustees. The Fund does not currently intend to
hold annual meetings of shareholders for the election of trustees (except as
required under the 1940 Act). For a further discussion of the voting rights of
shareholders, see "Additional Information Concerning Shares" in the Statement of
Additional Information.
On May 16, 1996, PNC Bank held of record approximately 75% of the Fund's
outstanding shares, as trustee on behalf of individual and institutional
investors, and may be deemed a controlling person of the Fund under the 1940
Act. PNC Bank is a subsidiary of PNC Bank Corp.
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HOW IS PERFORMANCE CALCULATED?
- --------------------------------------------------------------------------------
From time to time each Portfolio may advertise its "yield" and "effective
yield" for its Investor A Shares. Both yield figures are based on historical
earnings and are not intended to indicate future performance. "Yield" refers to
the income generated by an investment in a Portfolio's Investor A Shares over a
seven-day period. This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
"Effective yield" is calculated similarly but, when annualized, the income
earned by an investment in a Portfolio's Investor A Shares is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. A Portfolio's
"tax equivalent yield" may also be quoted, which shows the level of taxable
yield needed to produce an after-tax equivalent to the Portfolio's tax-free
yield for Investor A Shares.
The performance of Investor A Shares of a Portfolio may be compared to the
performance of mutual funds with similar investment objectives and to relevant
indices, as well as to ratings or rankings prepared by independent services or
other financial or industry publications that monitor the performance of mutual
funds. For example, the yield of Investor A Shares of a Portfolio may be
compared to data prepared by Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc. and Weisenberger Investment Company Service. Performance
information may also include evaluations of the Portfolios published in
nationally recognized ranking services, and information as reported by financial
publications such as Business Week, Fortune, Institutional Investor, Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or
in publications of a local or regional nature.
Performance quotations for shares of a Portfolio represent past performance
and should not be considered as representative of future results. The yield of
any investment is generally a function of portfolio quality and maturity, type
of investment and operating expenses. Yields will fluctuate and are not
necessarily representative of future results. Any fees charged by affiliates of
the Portfolios' investment adviser or other institutions directly to their
customers' accounts in connection with investments in the Portfolios will not be
included in the Portfolios' calculations of yield and performance.
HOW CAN I GET MORE INFORMATION?
- --------------------------------------------------------------------------------
We believe that it is essential for shareholders to have access to
information regarding their investment 24 hours a day, 7 days a week. The
Compass Capital Funds have an investor information line that can provide such
access.
In addition to account information, other sources of information regarding
each Compass Capital Portfolio and its portfolio holdings, strategy and current
dividend and performance levels are available.
By selecting the appropriate source of information as listed below,
investors can receive additional information on the Compass Capital Portfolios
by either using a toll-free number or through electronic access:
For Performance and Portfolio Management Questions, dial (800) FUTURE4.
For Information Related to Share Purchases and Redemptions and for
Questions about Shareholder Accounts and Balances, shareholders should write to
Janney Montgomery Scott, 1801 Market Street, Philadelphia, PA 19103-1675, or
call toll free 1-800-JANNEYS.
Information is also available on the Internet through the World Wide Web.
Shareholders and investment professionals may access portfolio information,
portfolio manager updates and market data by accessing
http://www.compassfunds.com.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR
BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY
BE MADE.
------------------------
ASKING THE KEY QUESTIONS
<TABLE>
<CAPTION>
Page
----
<S> <C>
What are the Expenses of the Portfolios?......... 3
What are the Portfolios' Financial Highlights?... 6
What are the Portfolios?......................... 10
What Additional Investment Policies and Risks
Apply?......................................... 11
What are the Portfolios' Fundamental Investment
Limitations?................................... 15
Who Manages the Fund?............................ 16
How are Shares Purchased?........................ 19
How are Shares Redeemed?......................... 20
How is Net Asset Value Calculated?............... 21
How Frequently are Dividends and Distributions
Made to Investors?............................. 21
How are Fund Distributions Taxed?................ 22
How is the Fund Organized?....................... 25
How is Performance Calculated?................... 26
How Can I Get More Information?.................. 26
</TABLE>
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[JMS LOGO]
PROSPECTUS
JANNEY
MONTGOMERY SCOTT--
THE MONEY FUNDS
NEW JERSEY MUNICIPAL
MONEY MARKET PORTFOLIO
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NORTH CAROLINA MUNICIPAL
MONEY MARKET PORTFOLIO
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OHIO MUNICIPAL MONEY MARKET PORTFOLIO
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PENNSYLVANIA MUNICIPAL
MONEY MARKET PORTFOLIO
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VIRGINIA MUNICIPAL MONEY
MARKET PORTFOLIO
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MAY 31, 1996
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