INDEPENDENCE ONE MUTUAL FUNDS, 485BPOS, 1996-08-26

INDEPENDENCE ONE MUTUAL FUNDS
485BPOS, 1996-08-26

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1933 Act File No. 33-26516
1940 Act File No. 811-5752

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

Pre-Effective Amendment No. ..........

Post-Effective Amendment No. 19 ........... X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 19 .......................... X

INDEPENDENCE ONE MUTUAL FUNDS

(Exact Name of Registrant as Specified in Charter)

Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
X on August 31, 1996 pursuant to paragraph (b)(1)(v)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i)
75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485.
-----------------

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:

X filed the Notice required by that Rule on June 14, 1996; or
intends to file the Notice required by that Rule on or about
; or
------------
during the most recent fiscal year did not sell any securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.

Copies To:

Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037

CROSS REFERENCE SHEET

This Amendment to the Registration Statement of INDEPENDENCE ONE
MUTUAL FUNDS which consists of seven portfolios: (1) Independence One
Michigan Municipal Cash Fund; (2a) Independence One Prime Money Market Fund
- - Class A Shares; (2b) Independence One Prime Money Market Fund - Class B
Shares; (3) Independence One U.S. Treasury Money Market Fund; (4)
Independence One U.S. Government Securities Fund, (5) Independence One
Equity Plus Fund; (6) Independence One Fixed Income Fund; and (7)
Independence One Michigan Municipal Bond Fund, relates only to Independence
One U.S. Government Securities Fund, Independence One Fixed Income Fund and
Independence One Michigan Municipal Bond Fund and is comprised of the
following (all Funds have been referenced below to maintain consistency
among the Registrant's filings and to facilitate the cross-referencing
process):

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page...............(1-7) Cover Page.
Item 2. Synopsis.................(1-4,6,7) Synopsis; (1-7) Summary of
Fund Expenses.
Item 3. Condensed Financial
Information.............(1-7) Financial Highlights.
.........................(1-7) Performance Information.

Item 4. General Description of
Registrant..............(1-4,6,7) Investment Information; (1-
4,6,7) Investment Objective of Each
Fund; (1-4,6,7) Portfolio Investments
and Strategies; (5) General Information;
(5) Investment Information; (5)
Investment Objective; (5) Investment
Policies; (5) Acceptable Investments;
(1-7) Investment Limitations; (5) Equity
Investment Considerations (5) Derivative
Contracts and Securities; (5) Standard &
Poor's.
Item 5. Management of the Fund...(1-7) Independence One Mutual Funds
Information; (1-7) Management of the
Trust; (1-7) Distribution of Fund
Shares; (1-7) Fund Administration (5)
Brokerage Transactions.
Item 6. Capital Stock and Other
Securities..............(1-7) Dividends; (1-7) Capital Gains;
(1-7) Shareholder Information; (1-7)
Voting Rights; (1-7) Effect of Banking
Laws; (1-7) Tax Information; (1-7)
Federal Income Tax; (1,7) Michigan Tax
Considerations.

Item 7. Purchase of Securities Being
Offered.................(1-7) Net Asset Value; (1-4,6,7)
Investing in the Funds; (5) Investing in
the Fund; (1-7) Share Purchases; (1-7)
Minimum Investment Required; (1-3) Cash
Sweep Program; (1-7) What Shares Cost;
(1-7) Certificates and Confirmations;
(1-7) Systematic Investment Program.
Item 8 Redemption or Repurchase.(1-4,6,7) Redeeming Shares; (5)
Redeeming Fund Shares; (1-7) Systematic
Withdrawal Program; (1-7) Accounts with
Low Balances; (1-3) Redemption in Kind
(1-7) Exchange Privilege; (5-7)
Exchanging Securities for Fund Shares.
Item 9. Pending Legal Proceedings None.

PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page...............(1-7) Cover Page.
Item 11. Table of Contents........(1-7) Table of Contents.
Item 12. General Information and
History.................(1-4,6,7) General Information About the
Funds; (5) General Information About the
Fund;.
Item 13. Investment Objectives and
Policies................(1-4,6,7) Investment Objective and
Policies of the Funds; (4,6,7)
Acceptable Investments; (5) Types of
Investments; (5) Investment Objective
and Policies; (4-7) Portfolio Turnover;
(1-7) Investment Limitations; (1-3)
Regulatory Compliance; (1,7) Michigan
Investment Risks.
Item 14. Management of the Fund...(1-7) Independence One Mutual Funds
Management; (1-7) Officers and Trustees;
(1-7) Fund Ownership; (1-7) Trustee
Liability; (1-7) Trustees Compensation;
(1-7)Massachusetts Partnership Law.
Item 15. Control Persons and Principal
Holders of Securities.... Not applicable.
Item 16. Investment Advisory and Other
Services................(1-7) Investment Advisory Services; (1-
3,5) Adviser to the Fund; (4,6-7)
Adviser and Sub-Adviser to the Funds;
(1-3,5) Advisory Fees; (4,6-7) Advisory
and Sub-Advisory Fees;(1-7) Other
Services; (1-7) Trust Administration;
(1-7) Custodian; (1-7) Transfer Agent
and Dividend Disbursing Agent; (1-7)
Independent Auditors.
Item 17. Brokerage Allocation.....(1-7) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities..............Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.................(1-7) Purchasing Shares; (1-7)
Determining Net Asset Value; (1-3) Use
of Amortized Cost Method; (4-7)
Determining Market Value of Securities;
(1-7) Redeeming Shares; (1-7) Redemption
in Kind; (1-7) Exchange Privilege; (4-7)
Capital Gains.
Item 20. Tax Status...............(1-7) Tax Status; (1-7) The Funds' Tax
Status; (1-7) Shareholders' Tax Status.
Item 21. Underwriters.............(1,3) Distribution Plan; (2a)
Shareholder Services Plan; (1-7)
Conversion to Federal Funds.
Item 22. Calculation of Yield
Quotations of Money Market
Funds....................(1-7) Performance Comparisons; (1-7)
Economic and Market Information; (1,7)
Tax Equivalent Yield;(1-3) Effective
Yield; (1-7) Yield; (1-7) Total Return;
(4-7) Appendix.
Item 23. Financial Statements (5) Filed in Part A; (1-4,6,7)
Incorporated by reference to the Annual
Reports of the Funds dated April 30,
1996 (File Nos. 33-26526 and 811-5752).

INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE MICHIGAN MUNICIPAL BOND FUND
(PORTFOLIOS OF INDEPENDENCE ONE MUTUAL FUNDS)

PROSPECTUS

Independence One Mutual Funds (the "Trust") is an open-end management investment
company (a mutual fund) comprising a series of investment portfolios. This
prospectus offers investors interests in the following three separate investment
portfolios (collectively referred to as the "Funds" and individually as the
"Fund"), each having a distinct investment objective and policies:

Independence One U.S. Government Securities Fund;

Independence One Fixed Income Fund; and

Independence One Michigan Municipal Bond Fund.

MICHIGAN NATIONAL BANK PROFESSIONALLY MANAGES THE FUNDS' PORTFOLIOS. THE SHARES
OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF MICHIGAN NATIONAL
BANK, ARE NOT ENDORSED OR GUARANTEED BY MICHIGAN NATIONAL BANK, AND ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.

This prospectus contains the information you should read and know before you
invest in the Funds. Keep this prospectus for future reference.

The Funds have also filed a Statement of Additional Information, dated August
31, 1996, with the Securities and Exchange Commission. The information contained
in the Statement is incorporated by reference into this prospectus. You may
request a copy of the Statement by calling toll-free
1-800-334-2292. To obtain other information, or make inquiries about the Trust,
contact the Trust at the address listed in the back of 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.

Prospectus dated August 31, 1996

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

SYNOPSIS 1
- ------------------------------------------------------

SUMMARY OF FUND EXPENSES 3
- ------------------------------------------------------

FINANCIAL HIGHLIGHTS 4
- ------------------------------------------------------

INVESTMENT INFORMATION 7
- ------------------------------------------------------

Investment Objective of Each Fund 7
Government Securities Fund 7
Fixed Income Fund 8
Michigan Municipal Bond Fund 14

PORTFOLIO INVESTMENTS AND STRATEGIES 18
- ------------------------------------------------------

Investment Limitations 19

INDEPENDENCE ONE MUTUAL FUNDS
INFORMATION 20
- ------------------------------------------------------

Management of the Trust 20
Distribution of Fund Shares 21
Fund Administration 21

NET ASSET VALUE 22
- ------------------------------------------------------

INVESTING IN THE FUNDS 22
- ------------------------------------------------------

Share Purchases 22

Minimum Investment Required 22
What Shares Cost 22
Certificates and Confirmations 23
Dividends and Capital Gains 23
Systematic Investment Program 23
Exchanging Securities for Fund Shares 23

EXCHANGE PRIVILEGE 24
- ------------------------------------------------------

REDEEMING SHARES 25
- ------------------------------------------------------

Systematic Withdrawal Program 27
Accounts with Low Balances 27

SHAREHOLDER INFORMATION 27
- ------------------------------------------------------

Voting Rights 27

EFFECT OF BANKING LAWS 28
- ------------------------------------------------------

TAX INFORMATION 28
- ------------------------------------------------------

Federal Income Tax 28
Michigan Municipal Bond Fund Tax
Considerations 29

PERFORMANCE INFORMATION 30
- ------------------------------------------------------

ADDRESSES Back Cover
- ------------------------------------------------------

SYNOPSIS
- --------------------------------------------------------------------------------

The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated January 9, 1989. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. This prospectus relates only to the three Funds
described herein. The Funds are designed as a convenient means of accumulating
interests in professionally managed portfolios.

The following three Funds are offered in this prospectus:

Independence One U.S. Government Securities Fund ("Government Securities
Fund") seeks to provide high current income. In pursuing this objective,
the Government Securities Fund's portfolio will also be managed in an
effort to seek total return. The Government Securities Fund invests only
in U.S. government securities which are either issued or guaranteed by
the U.S. government, its agencies or instrumentalities.

Independence One Fixed Income Fund ("Fixed Income Fund") seeks to provide
total return by investing primarily in a diversified portfolio of
high-grade fixed income securities.

Independence One Michigan Municipal Bond Fund ("Michigan Municipal Bond
Fund") seeks to provide current income exempt from federal regular income
tax and the personal income taxes imposed by the State of Michigan and
Michigan municipalities. The municipal securities in which Michigan
Municipal Bond Fund invests primarily include those issued by or on
behalf of the State of Michigan and Michigan municipalities, as well as
those issued by other states, territories and possessions of the United
States which are exempt from federal regular income tax and the personal
income taxes of the State of Michigan and Michigan municipalities
("Michigan Municipal Securities"). In addition, Michigan Municipal Bond
Fund intends to qualify as an investment substantially exempt from the
Michigan intangibles tax.

Shares of the Funds are intended to be sold as an investment vehicle for
institutions, corporations, fiduciaries and individuals. For information on how
to purchase shares of the Funds, please refer to "Investing in the Funds." A
minimum initial investment of $1,000 is required for each Fund. Subsequent
investments must be in the amount of at least $100. See "Minimum Investment
Required."

Fund shares are currently sold and redeemed at net asset value. Information on
redeeming shares can be found under "Redeeming Shares." Shareholders can invest,
reinvest, or redeem shares at any time without charge or penalty imposed by the
Funds. Shareholders have access to other portfolios of the Trust through an
exchange program. Information regarding the exchange privilege offered with
respect to the Trust can be found under "Exchange Privilege."

Michigan National Bank is the investment adviser (the "Adviser") to the Funds
and receives compensation for its services. Independence One Capital Management
Corporation serves as sub-adviser to Government Securities Fund.

One or more of the Funds may make certain investments and employ certain
investment techniques that involve risks, including entering into repurchase
agreements, investing in when-issued securities, restricted and illiquid
securities, and securities of other investment companies. These risks and those
associated with investing in debt securities generally, Michigan Municipal
Securities, variable rate securities, bank instruments, short-term credit
facilities, asset-backed securities, participation interests, and demand
features are described under "Investment Objective of Each Fund" and "Portfolio
Investments and Strategies."

INDEPENDENCE ONE MUTUAL FUNDS
SUMMARY OF FUND EXPENSES

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MICHIGAN
GOVERNMENT FIXED INCOME MUNICIPAL
SECURITIES FUND FUND BOND FUND
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................. None None None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)............................. None None None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)........... None None None
Redemption Fee (as a percentage of amount redeemed,
if applicable).................................................. None None None
Exchange Fee...................................................... None None None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of average net assets)
<S> <C> <C> <C>
Management Fees (after waivers)(1)................................ 0.25% 0.25% 0.00%
12b-1 Fees........................................................ None None None
Total Other Expenses (after waivers) (2).......................... 0.33% 0.31% 0.68%
Total Fund Operating Expenses (after waivers) (3)......... 0.58% 0.56% 0.68%
</TABLE>

(1) The management fees for Government Securites Fund, Fixed Income Fund and
Michigan Municipal Bond Fund were reduced to reflect the voluntary waiver by
the Adviser. The Adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee for Government Securities
Fund is 0.70%. The maximum management fee for the Fixed Income Fund and
Michigan Municipal Bond Fund is 0.75%.

(2) Total Other Expenses for Michigan Municipal Bond Fund have been reduced to
reflect the voluntary waiver of a portion of the administration fee. The
administrator can terminate this voluntary waiver at any time at its sole
discretion.

(3) The Total Fund Operating Expenses for Government Securites Fund, Fixed
Income Fund and Michigan Municipal Bond Fund for the fiscal year ended April
30, 1996 were 0.40%, 0.54% and 0.57%, respectively. The Total Fund Operating
Expenses for Government Securties Fund and Fixed Income Fund for the fiscal
year ended April 30, 1996 were 1.06% and 1.15, respectively, absent the
voluntary waivers of the management fee and administrative fee. The Total
Fund Operating Expenses for Michigan Municipal Bond Fund for the fiscal year
ended April 30, 1996 was 1.33% absent the voluntary waivers of the
management fee, administrative fee and certain other operating expenses. The
Total Fund Operating Expenses for Government Securites Fund, Fixed Income
Fund and Michigan Municipal Bond Fund for the fiscal year ending April 30,
1997 are expected to be 1.03%, 1.06%, and 1.52% absent the voluntary waivers
described in Note 1 and 2.

* The expenses in this table are estimated based on average expenses expected to
be incurred during the fiscal year ending April 30, 1997. During the course of
this period, expenses may be more or less than the average amount shown.

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUNDS WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUNDS."
<TABLE>
<S> <C> <C> <C>
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming (1) 5% annual return and (2)
redemption at the end of each time period.

<CAPTION>
MICHIGAN
GOVERNMENT FIXED INCOME MUNICIPAL
SECURITIES FUND FUND BOND FUND
<S> <C> <C> <C>
1 Year.................................................... $6 $6 $7
3 Years................................................... $19 $18 $22
5 Years................................................... $32 $31 $38
10 Years.................................................. $73 $70 $85
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following table has been audited by KPMG Peat Marwick LLP, the Fund's
independent auditors. Their report, dated June 14, 1996, on the Fund's Financial
Statements for the year ended April 30, 1996, and on the following table for
each of the periods presented, is included in the Fund's Annual Report, which is
incorporated herein by reference. This table should be read in conjunction with
the Fund's Financial Statements and Notes thereto, contained in the Fund's
Annual Report, which may be obtained from the Fund.
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
1996 1995 1994 1993(a)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.79 $ 9.84 $ 10.31 $ 10.00
- ------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------
Net investment income 0.59 0.60 0.55 0.33
- ------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.19 (0.05) (0.47) 0.31
- ------------------------------------------------------------------------ --------- --------- --------- -----------
Total from investment operations 0.78 0.55 0.08 0.64
- ------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------------
Distributions from net investment income (0.59) (0.60) (0.55) (0.33)
- ------------------------------------------------------------------------ --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.98 $ 9.79 $ 9.84 $ 10.31
- ------------------------------------------------------------------------ --------- --------- --------- -----------
TOTAL RETURN (b) 7.97% 5.90% 0.66% 4.61%
- ------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------------
Expenses 0.40% 0.35% 0.31% 0.17%*
- ------------------------------------------------------------------------
Net investment income 5.85% 6.23% 5.32% 5.59%*
- ------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.66% 0.70% 0.70% 0.83%*
- ------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------
Net assets, end of period (000 omitted) $72,291 $62,514 $72,866 $87,704
- ------------------------------------------------------------------------
Portfolio turnover 104% 75% 20% 0%
- ------------------------------------------------------------------------
</TABLE>

* Computed on an annualized basis.

(a) Reflects operations for the period from January 11, 1993 (date of initial
public investment) to April 30, 1993.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

Further information about the Fund's performance is contained in the Annual
Report for the fiscal year ended April 30, 1996, which can be obtained free of
charge.

INDEPENDENCE ONE FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

The following table has been audited by KPMG Peat Marwick LLP, the Fund's
independent auditors. Their report, dated June 14, 1996, on the Fund's Financial
Statements for the year ended April 30, 1996, and on the following table for the
period presented, is included in the Fund's Annual Report, which is incorporated
herein by reference. This table should be read in conjunction with the Fund's
Financial Statements and Notes thereto, contained in the Fund's Annual Report,
which may be obtained from the Fund.
<TABLE>
<CAPTION>
YEAR ENDED
APRIL 30, 1996(a)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- -------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------
Net investment income 0.30
- -------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (0.18)
- ------------------------------------------------------------------------------------------- -------
Total from investment operations 0.12
- -------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------
Distributions from net investment income (0.30)
- ------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 9.82
- ------------------------------------------------------------------------------------------- -------
TOTAL RETURN (b) 1.15%
- -------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------------
Expenses 0.54%*
- -------------------------------------------------------------------------------------------
Net investment income 5.73%*
- -------------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.61%*
- -------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $62,256
- -------------------------------------------------------------------------------------------
Portfolio turnover 4%
- -------------------------------------------------------------------------------------------
</TABLE>

* Computed on an annualized basis.

(a) Reflects operations for the period from October 23, 1995 (date of initial
public investment) to April 30, 1996.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

Further information about the Fund's performance is contained in the Annual
Report for the fiscal year ended April 30, 1996, which can be obtained free of
charge.

INDEPENDENCE ONE MICHIGAN MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

The following table has been audited by KPMG Peat Marwick LLP, the Fund's
independent auditors. Their report, dated June 14, 1996, on the Fund's Financial
Statements for the year ended April 30, 1996, and on the following table for the
period presented, is included in the Fund's Annual Report, which is incorporated
herein by reference. This table should be read in conjunction with the Fund's
Financial Statements and Notes thereto, contained in the Fund's Annual Report,
which may be obtained from the Fund.
<TABLE>
<CAPTION>
YEAR ENDED
APRIL 30, 1996(a)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- -------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------
Net investment income 0.17
- -------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments (0.05)
- ------------------------------------------------------------------------------------------- -------
Total from investment operations 0.12
- -------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------
Distributions from net investment income (0.17)
- ------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 9.95
- ------------------------------------------------------------------------------------------- -------
TOTAL RETURN (b) 1.21%
- -------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------------
Expenses 0.57%*
- -------------------------------------------------------------------------------------------
Net investment income 3.83%*
- -------------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.76%*
- -------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $25,123
- -------------------------------------------------------------------------------------------
Portfolio turnover 39%
- -------------------------------------------------------------------------------------------
</TABLE>

* Computed on an annualized basis.

(a) Reflects operations for the period from November 20, 1995 (date of initial
public investment) to April 30, 1996.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about the Fund's performance is contained in the Annual
Report for the fiscal year ended April 30, 1996, which can be obtained free of
charge.

INVESTMENT INFORMATION
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE OF EACH FUND

The investment objective and policies of each Fund appear below. The investment
objective of a Fund cannot be changed without the approval of holders of a
majority of that Fund's shares. While there is no assurance that a Fund will
achieve its investment objective, it endeavors to do so by following the
investment policies described in this prospectus.

Unless indicated otherwise, the investment policies of a Fund may be changed by
the Board of Trustees ("Trustees") without approval of shareholders.
Shareholders will be notified before any material change in these policies
becomes effective.

Each Fund's investment limitations are discussed below under "Investment
Limitations."

Additional information about investment limitations, strategies that one or more
Funds may employ, and certain investment policies mentioned below appear in the
"Portfolio Investments and Strategies" section of this prospectus and in the
Statement of Additional Information.

GOVERNMENT SECURITIES FUND

INVESTMENT OBJECTIVE AND POLICIES. The investment objective of the Fund is to
seek high current income. As a matter of investment policy, the Fund's portfolio
will also be managed in an effort to seek total return.

ACCEPTABLE INVESTMENTS. The Fund invests in U.S. government securities which
are either issued or guaranteed by the U.S. government, its agencies or
instrumentalities. These securities include, but are not limited to:

direct obligations of the U.S. Treasury such as U.S. Treasury bills,
notes and bonds; and

notes, bonds and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives and Banks for Cooperatives; Federal Home
Loan Banks; Federal Home Loan Mortgage Corporation; Federal National
Mortgage Association; Government National Mortgage Association;
Export-Import Bank of the United States; Commodity Credit Corporation;
Federal Financing Bank; The Student Loan Marketing Association; National
Credit Union Administration; and Tennessee Valley Authority.

Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These agencies and instrumentalities are supported by:

the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;

the discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or

the credit of the agency or instrumentality.

As discussed above, U.S. government securities are subject to varying levels of
backing as to payment of principal and interest by the United States. Of course,
this does not mean that the Fund itself, or the value of its shares, is
guaranteed. As with all debt securities, prices of U.S. government securities
move inversely to interest rates. A decline in market interest rates generally
results in a rise in the market prices of outstanding U.S. government or other
debt securities. Conversely, an increase in market interest rates results in a
decline in market prices. In either case, the amount of change in market prices
of U.S. government or other debt securities in response to changes in market
interest rates generally depends on the duration of the securities; the
securities with the highest duration will experience the greatest market price
changes. As noted above, the Fund will be managed with a view toward minimizing
decreases in the value of the Fund's shares. See the discussion of "Risks" under
"Portfolio Investments and Strategies."

In addition, the Fund may engage in repurchase agreements and when-issued and
delayed delivery transactions. See "Portfolio Investments and Strategies."

FIXED INCOME FUND

INVESTMENT OBJECTIVE AND POLICIES. The investment objective of the Fund is to
seek total return. Total return consists of income and capital gains. The Fund
pursues its investment objective by investing primarily in a diversified
portfolio of high-grade fixed income securities that, at the time of purchase,
are rated A or higher by Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), or Fitch Investors Service, Inc. ("Fitch") or
which, if unrated, are deemed to be of comparable quality to securities with
such ratings, as determined by the Adviser.

In pursuing its investment objective, the Fund will attempt to deliver share
price and/or income performance in excess of the bond market in general as
measured by such broad indices as the Lehman Brothers Intermediate
Government/Corporate Bond Index. The Fund presently expects to maintain an
average dollar-weighted maturity of between 5 and 10 years, although securities
of longer or shorter maturities may be purchased. The Fund will invest, under
normal circumstances, at least 65% of the value of its total assets in fixed
income securities.

The Adviser will use a multi-disciplined management approach which combines
judgments about the interest rate environment with other active management
techniques, such as emphasizing or de-emphasizing particular industry groups, in
selecting the Fund's investments. Fixed income securities will be purchased for
the Fund based on the Adviser's expectations regarding general market interest
rate trends and the impact such trends would have on the total return of the
fixed income securities. As a secondary consideration, the Adviser will attempt
to reduce loss of principal relative to the fixed income markets. However, the
primary consideration will be total return.

The Adviser attempts to manage the Fund's total performance, which includes both
changes in principal value of the Fund's portfolio and interest income earned,
to anticipate the opportunities and risks of changes in market interest rates.
The Adviser does not select securities purely to maximize the current yield of
the Fund. When the Adviser expects that market interest rates may decline, which
would cause prices of outstanding debt obligations to rise, it generally extends
the average maturity of the Fund's portfolio. When, in the Adviser's judgment,
market interest rates
may rise, which would cause market prices of outstanding debt obligations to
decline, it generally shortens the average maturity of the Fund's portfolio. The
amount of change in market prices of debt obligations in response to changes in
market interest rates generally depends on the maturity of the debt obligations;
as noted below under "Portfolio Investments and Strategies," "Risks," the debt
obligations with the longest maturities will generally experience the greatest
market price changes. The Adviser also attempts to improve the Fund's total
return by weighing the relative value of fixed income securities issues having
similar maturities in selecting portfolio securities. By actively managing the
Fund's portfolio in this manner, the Adviser seeks to provide capital
appreciation during periods of falling interest rates and protection against
capital depreciation during periods of rising rates.

ACCEPTABLE INVESTMENTS. The Fund invests primarily in a professionally-managed,
diversified portfolio of fixed income securities which include:

domestic issues of corporate debt obligations, including demand master
notes, rated at the time of purchase Aaa, Aa, or A by Moody's, AAA, AA,
or A by S&P or by Fitch or, if unrated, of comparable quality as
determined by the Adviser;

obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities, as described above under "Government Securities Fund";

asset-backed securities, including mortgage-backed securities;

repurchase agreements collateralized by high quality, liquid investments;
and

money market instruments.

If a security loses its rating or has its rating reduced after the Fund has
purchased it, the Fund is not required to sell or otherwise dispose of the
security, but may consider doing so. A description of the ratings categories is
contained in the Appendix to the Statement of Additional Information.

The Fund may also borrow money, lend portfolio securities, and invest in
restricted and illiquid securities, convertible securities and securities of
other investment companies. The Fund may engage in repurchase agreements,
reverse repurchase agreements, when-issued and delayed delivery transactions,
put and call options, futures, and options on futures. See "Portfolio
Investments and Strategies."

CORPORATE DEBT OBLIGATIONS. The Fund invests in corporate debt obligations,
including corporate bonds, notes, and debentures, which may have floating or
fixed rates of interest.

FIXED RATE CORPORATE DEBT OBLIGATIONS. The Fund may invest in fixed rate
securities, including fixed rate securities with short-term
characteristics. Fixed rate securities with short-term characteristics are
long-term debt obligations but are treated in the market as having short
maturities because call features of the securities may make them callable
within a short period of time. A fixed rate security with short-term
characteristics would include a fixed income security priced close to the
call or redemption price or a fixed income security approaching maturity,
where the expectation of call or redemption is high.

Fixed rate securities tend to exhibit more price volatility during times of
rising or falling interest rates than securities with floating rates of
interest. This is because floating rate securities, as described below, may
behave more like short-term instruments in that the rate of
interest they pay is subject to periodic adjustments based on a designated
interest rate index. Fixed rate securities pay a fixed rate of interest and
are more sensitive to fluctuating interest rates. In periods of rising
interest rates the value of a fixed rate security is likely to fall. Fixed
rate securities with short-term characteristics are not subject to the same
price volatility as fixed rate securities without such characteristics.
Therefore, they behave more like floating rate securities with respect to
price volatility.

FLOATING RATE CORPORATE DEBT OBLIGATIONS. The Fund may invest in floating
rate corporate debt obligations. Floating rate securities are generally
offered at an initial interest rate which is at or above prevailing market
rates. The interest rate paid on these securities is then reset
periodically (commonly every 90 days) to an increment over some
predetermined interest rate index. Commonly utilized indices include the
three-month Treasury bill rate, the six-month Treasury bill rate, the
one-month or three-month London Interbank Offered Rate (LIBOR), the prime
rate of a bank, the commercial paper rates, or the longer-term rates on
U.S. Treasury securities.

DEMAND MASTER NOTES. The Fund may invest in variable amount demand master
notes. Demand notes are short-term borrowing arrangements between a corporation
or government agency and an institutional lender (such as the Fund) payable upon
demand by either party. The notice period for demand typically ranges from one
to seven days, and the party may demand full or partial payment. Many master
notes give the Fund the option of increasing or decreasing the principal amount
of the master note on a daily or weekly basis within certain limits. Demand
master notes usually provide for floating or variable rates of interest.

CONVERTIBLE SECURITIES. Convertible securities are fixed income securities that
may be exchanged or converted into a predetermined number of the issuer's
underlying common stock at the option of the holder during a specified time
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 different investment
objectives.

Convertible securities generally retain the investment characteristics of fixed
income securities until they have been converted, but also react to movements in
the underlying equity securities. The holder is entitled to receive the fixed
income of a bond or the dividend preference of a preferred stock until the
holder elects to exercise the conversion privilege. Usable bonds are corporate
bonds that can be used in whole or in part, customarily at full face value, in
lieu of cash to purchase the issuer's common stock. When owned as part of a unit
along with warrants, which are options to buy the common stock, they function as
convertible bonds, except that the warrants generally will expire before the
bond's maturity. Convertible securities are senior to equity securities and,
therefore, have a claim to assets of the corporation prior to the holders of
common stock in the case of liquidation. However, convertible securities are
generally subordinated to similar nonconvertible securities of the same company.
The interest income and dividends from convertible bonds and preferred stocks
provide a stable stream of income with generally higher yields than common
stocks, but lower than non-convertible securities of similar quality.

The Fund will exchange or convert the convertible securities held in its
portfolio into shares of the underlying common stock in instances in which, in
the Adviser's opinion, the investment characteristics of the underlying common
shares will assist the Fund in achieving its investment objective. Otherwise,
the Fund will hold or trade the convertible securities. In selecting convertible
securities for the Fund, the Adviser 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
Adviser considers numerous factors, including the economic and political
outlook, the value of the security relative to other investment alternatives,
trends in the determination of the issuer's profits, and the issuer's management
capability and practices.

ZERO COUPON CONVERTIBLE SECURITIES. Zero coupon convertible securities are debt
securities which are issued at a discount to their face amount and do not
entitle the holder to any periodic payments of interest prior to maturity.
Rather, interest earned on zero coupon convertible securities accretes at a
stated yield until the security reaches its face amount at maturity. Zero coupon
convertible securities are convertible into a specific number of shares of the
issuer's common stock. In addition, zero coupon convertible securities usually
have features that provide the holder with the opportunity to put the bonds back
to the issuer at a stated price before maturity. Generally, the prices of zero
coupon convertible securities may be more sensitive to market interest rate
fluctuations than conventional convertible securities. Additionally, federal tax
law requires that interest on zero coupon bonds be reported as income to the
Fund even though the Fund received no cash interest until the maturity or
payment date of such securities.

MORTGAGE-BACKED SECURITIES. Mortgage-backed securities are securities that
directly or indirectly represent a participation in, or are secured by and
payable from, mortgage loans on real property. There are currently three basic
types of mortgage-backed securities: (i) those issued or guaranteed by the U.S.
government or one of its agencies or instrumentalities, such as the Government
National Mortgage Association ("Ginnie Mae"), the Federal National Mortgage
Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation
("Freddie Mac"); (ii) those issued by private issuers that represent an interest
in or are collateralized by mortgage-backed securities issued or guaranteed by
the U.S. government or one of its agencies or instrumentalities; and (iii) those
issued by private issuers that represent an interest in or are collateralized by
whole loans or mortgage-backed securities without a government guarantee but
usually having some form of private credit enhancement.

ADJUSTABLE RATE MORTGAGE SECURITIES. Adjustable rate mortgage securities
("ARMS") are pass-through mortgage securities representing interests in
adjustable rather than fixed interest rate mortgages. The ARMS in which the
Fund invests are issued by Ginnie Mae, Fannie Mae or Freddie Mac, and are
actively traded. The underlying mortgages which collateralize ARMS issued
by Ginnie Mae are fully guaranteed by the Federal Housing Administration or
Veterans Administration, while those collateralizing ARMS issued by Fannie
Mae or Freddie Mac are typically conventional residential mortgages
conforming to strict underwriting size and maturity constraints.

COLLATERALIZED MORTGAGE OBLIGATIONS. Collateralized mortgage obligations
("CMOs") are debt obligations collateralized by mortgage loans or mortgage
pass-through securities. Typically, CMOs are collateralized by Ginnie Mae,
Fannie Mae or Freddie Mac Certificates, but may be collateralized by whole
loans or private pass-through securities.

The Fund will only invest in CMOs which, at the time of purchase, are rated
AAA by an NRSRO or are of comparable quality as determined by the Adviser,
and which may be: (a) collateralized by pools of mortgages in which each
mortgage is guaranteed as to payment of principal and interest by an agency
or instrumentality of the U.S. government; (b) collateralized by pools of
mortgages in which payment of principal and interest is guaranteed by the
issuer and such guarantee is collateralized by U.S. government securities;
or (c) collateralized by pools of mortgages without a government guarantee
as to payment of principal and interest, but which have some form of credit
enhancement.

REAL ESTATE MORTGAGE INVESTMENT CONDUITS. Real estate mortgage investment
conduits ("REMICs") are offerings of multiple class real estate
mortgage-backed securities which qualify and elect treatment as such under
provisions of the Internal Revenue Code. Issuers of REMICs may take several
forms, such as trusts, partnerships, corporations, associations, or
segregated pools of mortgages. Once REMIC status is elected and obtained,
the entity is not subject to federal income taxation. Instead, income is
passed through the entity and is taxed to the person or persons who hold
interests in the REMIC. A REMIC interest must consist of one or more
classes of "regular interests." To qualify as a REMIC, substantially all
the assets of the entity must be in assets directly or indirectly secured
principally by real property.

ASSET-BACKED SECURITIES. Asset-backed securities have structural
characteristics similar to mortgage-backed securities but have underlying assets
that are not mortgage loans or interests in mortgage loans. The Fund may invest
in asset-backed securities which, at the time of purchase, are rated A or higher
by a nationally recognized statistical rating organization ("NRSRO") including,
but not limited to, interests in pools of receivables, such as motor vehicle
installment purchase obligations and credit card receivables. These securities
may be in the form of pass-through instruments or asset-backed bonds. The
securities are issued by non-governmental entities and carry no direct or
indirect government guarantee.

RISKS OF MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. Mortgage-backed and
asset-backed securities generally pay back principal and interest over the life
of the security. At the time the Fund reinvests the payments and any unscheduled
prepayments of principal received, the Fund may receive a rate of interest which
is actually lower than the rate of interest paid on these securities
("prepayment risks"). Mortgage-backed and asset-backed securities are subject to
higher prepayment risks than most other types of debt instruments with
prepayment risks because the underlying mortgage loans or the collateral
supporting asset-backed securities may be prepaid without penalty or premium.
Prepayment risks on mortgage-backed securities tend to increase during periods
of declining mortgage interest rates because many borrowers refinance their
mortgages to take advantage of the more favorable rates. Prepayments on
mortgage-backed securities are also affected by other factors, such as the
frequency with which people sell their homes or elect to make unscheduled
payments on their mortgages. Prepayments may result in a capital loss to the
Fund to the extent that the prepaid securities were purchased at a market
premium over their stated
principal amount. Conversely, the prepayment of a security purchased at a market
discount from its stated principal amount will accelerate the recognition of
interest income by the Fund, which would be taxed as ordinary income when
distributed to the shareholders. Although asset-backed securities generally are
less likely to experience substantial prepayments than are mortgage-backed
securities, certain of the factors that affect the rate of prepayments on
mortgage-backed securities also affect the rate of prepayments on asset-backed
securities.

Asset-backed securities present certain risks that are not presented by
mortgage-backed securities. Primarily, these securities do not have the benefit
of the same security interest in the related collateral. Credit card receivables
are generally unsecured and the debtors are entitled to the protection of a
number of state and federal consumer credit laws, many of which give such
debtors the right to set off certain amounts owed on the credit cards, thereby
reducing the balance due. Most issuers of asset-backed securities backed by
motor vehicle installment purchase obligations permit the servicer of such
receivables to retain possession of the underlying obligations. If the servicer
sells these obligations to another party, there is a risk that the purchaser
would acquire an interest superior to that of the holders of the related
asset-backed securities. Further, if a vehicle is registered in one state and is
then reregistered because the owner and obligor moves to another state, such
reregistration could defeat the original security interest in the vehicle in
certain cases. In addition, because of the large number of vehicles involved in
a typical issuance and technical requirements under state laws, the trustee for
the holders of asset-backed securities backed by automobile receivables may not
have a proper security interest in all of the obligations backing such
receivables. Therefore, there is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on these
securities.

DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.

LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend portfolio securities on a short-term or long-term basis, or both,
to broker/dealers, banks, or other institutional borrowers of securities. The
Fund will only enter into loan arrangements with broker/dealers, banks, or other
institutions which the Adviser has determined are creditworthy and will receive
collateral in the form of cash or U.S. government securities equal to at least
102% of the value of the securities loaned.

There is the risk that when lending portfolio securities, the securities may not
be available to the Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a
desirable price. In addition, in the event that a borrower of securities would
file for bankruptcy or become insolvent, disposition of the securities may be
delayed pending court action.

OTHER INVESTMENT TECHNIQUES. The Fund may purchase and sell financial futures
contracts and related options. In addition, the Fund may purchase put options on
its portfolio securities. These options will be used as a hedge to attempt to
protect securities which the Fund holds against decreases in value. The Fund may
also write covered call options on all or any portion of its portfolio to
generate income for the Fund. The Fund will write call options on securities
either held in its portfolio or which it has the right to obtain without payment
of further consideration or for which it has segregated cash or U.S. government
securities in the amount of any additional consideration.

DERIVATIVE CONTRACTS AND SECURITIES. The term "derivative" has traditionally
been applied to certain contracts (including futures, forward, option and swap
contracts) that "derive" their value from changes in the value of an underlying
security, currency, commodity or index. Certain types of securities that
incorporate the performance characteristics of these contracts are also referred
to as "derivatives." The term has also been applied to securities "derived" from
the cash flows from underlying securities, mortgages or other obligations.

Derivative contracts and securities can be used to reduce or increase the
volatility of an investment portfolio's total performance. While the response of
certain derivative contracts and securities to market changes may differ from
traditional investments, such as stock and bonds, derivatives do not necessarily
present greater market risks than traditional investments. The Fund will only
use derivative contracts for the purposes disclosed in the applicable prospectus
sections above. To the extent that the Fund invests in securities that could be
characterized as derivatives (such as futures, options, and asset-backed
securities and mortgage-backed securities, including ARMs, CMOs, and REMICs), it
will only do so in a manner consistent with its investment objective, policies
and limitations.

MICHIGAN MUNICIPAL BOND FUND

INVESTMENT OBJECTIVE AND POLICIES. The investment objective of the Fund is to
provide current income which is exempt from federal regular income tax and the
personal income taxes imposed by the State of Michigan and Michigan
municipalities. Interest income of the Fund that is exempt from the income taxes
described above retains its exempt status when distributed to the Fund's
shareholders. However, income distributed by the Fund may not necessarily be
exempt from state or municipal taxes in states other than Michigan. In addition,
the Fund intends to qualify as an investment substantially exempt from the
Michigan Intangibles Personal Property tax ("Intangibles tax"). (Federal regular
income tax does not include the individual alternative minimum tax or the
federal alternative minimum tax for corporations.) The Fund is not likely to be
a suitable investment for non-Michigan taxpayers or retirement plans since
Michigan Municipal Securities are not likely to produce competitive after-tax
yields for such persons and entities when compared to other investments.

As a matter of fundamental investment policy which may not be changed without
shareholder approval, the Fund will invest its assets so that, under normal
circumstances, at least 80% of its total assets are invested in Michigan
Municipal Securities, as previously defined.

ACCEPTABLE INVESTMENTS. The Michigan Municipal Securities in which the Fund
invests include:

obligations issued by or on behalf of the state of Michigan, its
political subdivisions, or agencies;

debt obligations of any state, territory, or possession of the United
States, or any political subdivision of any of these; and

participation interests, as described below, in any of the above
obligations,

the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Fund and/or the Adviser, exempt from both federal
regular income tax and the personal income taxes imposed by the State of
Michigan and Michigan municipalities.

The prices of fixed income securities fluctuate inversely to the direction of
interest rates. See the discussion "Risks" under "Portfolio Investments and
Strategies."

CHARACTERISTICS. The Michigan Municipal Securities which the Fund buys are high
grade bonds rated, at the time of purchase, Aaa, Aa or A by Moody's, AAA, AA or
A by S&P, or AAA, AA or A by Fitch. In certain cases the Adviser may choose
bonds which are unrated if it judges the bonds to have the same characteristics
as the investment grade bonds described above. If a security loses its rating or
has its rating reduced after the Fund has purchased it, the Fund is not required
to sell or otherwise dispose of the security, but may consider doing so. A
description of the ratings categories is contained in the Appendix to the
Statement of Additional Information.

PARTICIPATION INTERESTS. The Fund may purchase participation interests from
financial institutions such as commercial banks, savings associations, and
insurance companies. These participation interests give the Fund an undivided
interest in Michigan Municipal Securities. The financial institutions from which
the Fund purchases participation interests frequently provide or secure
irrevocable letters of credit or guarantees to assure that the participation
interests are of high quality. The Adviser will determine whether participation
interests meet the prescribed quality standards for the Fund.

VARIABLE RATE MUNICIPAL SECURITIES. Some of the Michigan Municipal Securities
which the Fund purchases may have variable interest rates. Variable interest
rates are ordinarily based on a published interest rate, interest rate index, or
a similar standard, such as the 91-day U.S. Treasury bill rate. Many variable
rate municipal securities are subject to payment of principal on demand by the
Fund in not more than seven days. All variable rate municipal securities will
meet the quality standards for the Fund. The Adviser has been instructed by the
Trustees to monitor the pricing, quality, and liquidity of the variable rate
municipal securities, including participation interests held by the Fund on the
basis of published financial information and reports of the rating agencies and
other analytical services.

MUNICIPAL LEASES. Municipal leases are obligations issued by state and local
governments or authorities to finance the acquisition of equipment and
facilities and may be considered to be illiquid. They may take the form of a
lease, an installment purchase contract, a conditional sales contract or a
participation certificate on any of the above. 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. In the
event of failure of appropriation, unless the

participation interests are credit enhanced, it is unlikely that the
participants would be able to obtain an acceptable substitute source of payment.

TEMPORARY INVESTMENTS. From time to time on a temporary basis, or when the
Adviser determines that market conditions call for a temporary defensive
posture, the Fund may invest in short-term non-Michigan municipal tax-exempt
obligations or taxable temporary investments. These temporary investments
include: notes issued by or on behalf of municipal or corporate issuers;
obligations issued or guaranteed by the U.S. government, its agencies, or
instrumentalities; other debt securities; commercial paper; certificates of
deposit of banks; and repurchase agreements (arrangements in which the
organization selling the Fund a bond or temporary investment agrees at the time
of sale to repurchase it at a mutually agreed upon time and price).

There are no rating requirements applicable to temporary investments. However,
the Adviser will limit temporary investments to those rated within the high
grade categories described under "Acceptable Investments--Characteristics" (if
rated) or (if unrated) those which the Adviser judges to have the same
characteristics as such investment grade securities.

Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or personal income taxes imposed by the State of Michigan or Michigan
municipalities.

In addition, Michigan Municipal Bond Fund may engage in when-issued and delayed
delivery transactions, restricted and illiquid securities, and securities of
other investment companies. See "Portfolio Investment and Strategies."

MICHIGAN MUNICIPAL SECURITIES. Michigan Municipal Securities are generally
issued to finance public works, such as airports, bridges, highways, housing,
hospitals, mass transportation projects, schools, streets, and water and sewer
works. They are also issued to repay outstanding obligations, to raise funds for
general operating expenses, and to make loans to other public institutions and
facilities.

Michigan Municipal Securities include industrial development bonds issued by or
on behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.

The two principal classifications of Michigan Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. However, interest on and principal of revenue bonds are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.

INVESTMENT RISKS. Yields on Michigan Municipal Securities depend on a variety
of factors, including: the general conditions of the municipal bond market; the
size of the particular offering; the maturity of the obligations; and the rating
of the issue. Further, any adverse economic conditions or

developments affecting the State of Michigan or its municipalities could impact
the Fund's portfolio. The ability of the Fund to achieve its investment
objective also depends on the continuing ability of the issuers of Michigan
Municipal Securities and participation interests, or the guarantors of either,
to meet their obligations for the payment of interest and principal when due. In
addition, from time to time, the supply of Michigan Municipal Securities
acceptable for purchase by the Fund could be limited. Investing in Michigan
Municipal Securities which meet the Fund's quality standards may not be possible
if the State of Michigan or its municipalities do not maintain their current
credit ratings.

The Fund may invest in Michigan Municipal Securities which are repayable out of
revenue streams generated from economically related projects or facilities
and/or whose issuers are located in the same state. Sizable investments in these
Michigan Municipal Securities could involve an increased risk to the Fund should
any of these related projects or facilities experience financial difficulties.

Obligations of issuers of Michigan Municipal Securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors. In addition, the obligations of such issuers may become
subject to laws enacted in the future by Congress, state legislators, or
referenda extending the time for payment of principal and/or interest, or
imposing other constraints upon enforcement of such obligations or upon the
ability of states or municipalities to levy taxes. There is also the possibility
that, as a result of litigation or other conditions, the power or ability of any
issuer to pay, when due, the principal of and interest on its municipal
securities may be materially affected.

The Michigan economy continues to shift away from durable good manufacturing to
a more diversified base reliant on services and trade. However, manufacturing,
and the automobile sector in particular, still have significant influence over
the State's economy. Michigan's economy tends to fluctuate with the cyclical
trends of the manufacturing sector, which accounted for nearly 21% of total
state employment in 1994. As of December 1995, unemployment stood at 4.7%, below
the national level of 5.2%.

Michigan's finances were hard hit during the 1990 and 1991 fiscal periods.
Spending cuts and an improving state economy enabled the state to begin to
restore balances in fiscal 1993. As a result of continuing surplus funds in
fiscal years 1993 and 1994, Michigan's budget stabilization fund reached an
historically high level of $780 million at the end of fiscal 1994 and was $1.03
billion at the end of January 1996.

A further discussion of the risks of a portfolio which invests primarily in
Michigan Municipal Securities is contained in the Statement of Additional
Information.

NON-DIVERSIFICATION. The Fund is a non-diversified investment portfolio. As
such, there is no limit on the percentage of assets which can be invested in any
single issuer. An investment in the Fund, therefore, will entail greater risk
than would exist in a diversified portfolio of securities because the higher
percentage of investments among fewer issuers may result in greater fluctuation
in the total market value of the Fund's portfolio. Any economic, political, or
regulatory developments affecting the value of the securities in the Fund's
portfolio will have a greater impact on the total value of the portfolio than
would be the case if the portfolio were diversified among more issuers.

The Fund intends to comply with Subchapter M of the Internal Revenue Code of
1986, as amended. This undertaking requires that at the end of each quarter of
the taxable year: (a) with regard to at least 50% of the Fund's total assets, no
more than 5% of its total assets are invested in the securities of a single
issuer, and (b) beyond that, no more than 25% of its total assets are invested
in the securities of a single issuer.

PORTFOLIO INVESTMENTS AND STRATEGIES
- --------------------------------------------------------------------------------

REPURCHASE AGREEMENTS. Certain of the securities in which the Funds invest may
be purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell U.S. government securities or other high-quality, liquid
securities to the Funds and agree at the time of sale to repurchase them at a
mutually agreed upon time and price. To the extent that the original seller does
not repurchase the securities from the Funds, the Funds 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 the Funds might be delayed pending court action. The Funds believe
that under regular procedures normally in effect for custody of the Funds'
portfolio securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Funds and allow retention or disposition
of such securities. The Funds will only enter into repurchase agreements with
banks and other recognized financial institutions such as broker/dealers which
are deemed by the Adviser to be creditworthy pursuant to guidelines established
by the Trustees.

RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest in illiquid
securities. The Fixed Income Fund and Michigan Municipal Bond Fund may invest in
restricted securities. Restricted securities are any securities in which the
Funds may otherwise invest pursuant to their investment objectives and policies
but which are subject to restrictions on resale under federal securities laws.
To the extent these securities are not determined to be liquid, the Funds will
limit their purchase of these securities, together with other securities
considered to be illiquid, (including repurchase agreements providing for
settlement in more than seven days after notice, and, in the case of Fixed
Income Fund, over-the-counter options), to 15% of their respective net assets.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. Fixed Income Fund and
Michigan Municipal Bond Fund can each acquire up to 3 per centum of the total
outstanding stock of other investment companies. The Funds will not be subject
to any other limitations with regard to the acquisition of securities of other
investment companies so long as the public offering price of the Funds' shares
does not include a sales charge exceeding 1-1/2 percent. The Funds will purchase
securities of investment companies only in open-market transactions involving
only customary broker's commissions (although the Funds do not expect to incur
any broker's commissions in connection with their purchases). However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. While it is each Fund's
policy to waive its investment advisory fees on Fund assets invested in
securities of other open-end investment companies, it should be noted that
investment companies incur certain expenses, such
as custodian and transfer agent fees, and therefore, any investment by the Funds
in shares of another investment company would be subject to such duplicate
expenses.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Funds may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Funds purchase securities with payment and delivery
scheduled for a future time. The seller's failure to complete these transactions
may cause the Funds to miss a price or yield considered to be advantageous.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices. Accordingly, the Funds may pay more or less than the market value of the
securities on the settlement date.

The Funds may dispose of a commitment prior to settlement if the Adviser deems
it appropriate to do so. In addition, the Funds may enter into transactions to
sell purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Funds may realize short-term profits or losses upon the sale of such
commitments.

RISKS. As noted above in the discussion of Government Securities Fund, the
market value of debt obligations (including U.S. government securities) and,
therefore, the Funds' net asset values, will fluctuate due to changes in
economic conditions and other market factors such as interest rates which are
beyond the control of the Adviser. The Adviser could be incorrect in its
expectations about the direction or extent of these market factors. Although
debt securities with longer maturities offer potentially greater returns, they
have greater exposure to market price fluctuation. Consequently, to the extent a
Fund is significantly invested in debt securities with longer maturities, there
is a greater possibility of fluctuation in the Fund's net asset value.

INVESTMENT LIMITATIONS

BORROWING MONEY. Government Securities Fund will not borrow money or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge up to 10% of the value of
its total assets to secure such borrowings.

Fixed Income Fund and Michigan Municipal Bond Fund will not borrow money
directly or through reverse repurchase agreements (arrangements in which the
Funds sell portfolio instruments for a percentage of their cash value with an
agreement to buy them back on a set date) or pledge securities except, under
certain circumstances, the Funds may borrow up to one-third of the value of
their respective total assets and pledge securities to secure such borrowings.

DIVERSIFICATION. Fixed Income Fund will not, with respect to 75% of the value
of its total assets, invest more than 5% of the value of its total assets in
securities of 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),
or acquire more than 10% of the outstanding voting securities of any one issuer.

The above investment limitations cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.

INDEPENDENCE ONE MUTUAL FUNDS INFORMATION
- --------------------------------------------------------------------------------

MANAGEMENT OF THE TRUST

BOARD OF TRUSTEES. The Trustees are responsible for managing the Trust's
business affairs and for exercising all of the Trust's powers except those
reserved for the shareholders. An Executive Committee of the Board of Trustees
handles the Board's responsibilities between meetings of the Board.

INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Funds are made by Michigan National Bank, as the
Funds' investment adviser, subject to direction by the Trustees. The Adviser
continually conducts investment research and supervision for the Funds and is
responsible for the purchase or sale of portfolio instruments, for which it
receives an annual fee from the assets of the Funds.

ADVISORY FEES. The Adviser receives an annual investment advisory fee
equal to 0.70% with respect to Government Securities Fund, and 0.75% with
respect to Fixed Income Fund and Michigan Municipal Bond Fund, of each
Fund's average daily net assets. The fees paid by Fixed Income Fund and
Michigan Municipal Bond Fund, while higher than the advisory fees paid by
other mutual funds in general, are comparable to fees paid by other mutual
funds with similar objectives and policies. The Adviser may voluntarily
choose to waive a portion of its fee or reimburse certain expenses of the
Funds. The Adviser has undertaken to reimburse the Funds, up to the amount
of the advisory fees, for operating expenses in excess of limitations
established by certain states.

ADVISER'S BACKGROUND. Michigan National Bank, a national banking
association, is a wholly-owned subsidiary of Michigan National Corporation
("MNC"). MNC is a wholly owned subsidiary of National Australia Bank
Limited, which is a transnational banking organization headquartered in
Melbourne, Australia. Through its subsidiaries and affiliates, MNC,
Michigan's sixth largest bank holding company in terms of total assets as
of March 31, 1996, offers a full range of financial services to the public,
including commercial lending, depository services, cash management,
brokerage services, retail banking, mortgage banking, investment advisory
services and trust services.

Independence One Capital Management Corporation ("IOCM"), a nationally
recognized investment advisory subsidiary of MNC, provides investment
advisory services for trust and other managed assets of the Funds. IOCM
serves as sub-adviser for Government Securities Fund.

Michigan National Bank has managed mutual funds since May 1989. IOCM and
the Trust Division of Michigan National Bank (the "Trust Division") have
managed custodial assets totaling $10.9 billion. Of this amount, IOCM and
the Trust Division have investment discretion over $1.8 billion. The Trust
Division has managed pools of commingled funds since 1964.

As part of its regular banking operations, Michigan National Bank may make
loans to or provide credit support for obligations issued by public
companies or municipalities. Thus, it may be possible, from time to time,
for the Funds to hold or acquire the securities of issuers
which are also lending clients of Michigan National Bank. The lending
relationship will not be a factor in the selection of securities.

SUB-ADVISER. With respect to Government Securities Fund, under the terms
of the sub-advisory contract between and among the Adviser and IOCM, IOCM
will assist the Adviser in the purchase or sale of the Fund's portfolio
instruments. IOCM will perform its duties at no cost to the Adviser or the
Fund.

PORTFOLIO MANAGERS. Bruce Beaumont is Vice President and Portfolio Manager
for Michigan National Bank and IOCM in Farmington Hills, and has been
responsible for management of Michigan Municipal Bond Fund's portfolio
since November 1995. Mr. Beaumont has been primarily responsible for
management of Government Securities Fund's portfolio since June 1995,
previously having assisted with those duties. He joined Michigan National
Bank in 1987. He earned his BA from Alma College and a MBA from
Northwestern University. Mr. Beaumont is a Chartered Financial Analyst and
a Certified Public Accountant.

John B. Willard is Vice President and Portfolio Manager for Michigan
National Bank and IOCM in Farmington Hills, and has been responsible for
management of Fixed Income Fund's portfolio since November 1995. He joined
Michigan National Bank in 1986. He earned his BBA from the University of
Iowa and MBA from the University of Arizona.

DISTRIBUTION OF FUND SHARES

Federated Securities Corp. is the principal distributor for shares of the Funds.
It is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated Securities
Corp. is a subsidiary of Federated Investors.

FUND ADMINISTRATION

ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides the Funds with certain administrative personnel
and services necessary to operate the Funds, such as certain legal and
accounting services. Federated Administrative Services provides these at an
annual rate as specified below:
<TABLE>
<CAPTION>
MAXIMUM
ADMINISTRATIVE AVERAGE AGGREGATE
FEE DAILY NET ASSETS OF THE TRUST
<C> <S>
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>

The administrative fee received during any fiscal year shall be at least $50,000
for each portfolio in Independence One Mutual Funds. Federated Administrative
Services may choose voluntarily to waive a portion of its fee.

CUSTODIAN. Michigan National Bank, Farmington Hills, Michigan, is custodian for
the securities and cash of the Funds.

NET ASSET VALUE
- --------------------------------------------------------------------------------

Each Fund's net asset value per share fluctuates. It is determined in each case
by adding the market value of all securities and other assets of the Fund,
subtracting the liabilities of the Fund, and dividing the remainder by the total
number of shares outstanding.

INVESTING IN THE FUNDS
- --------------------------------------------------------------------------------

SHARE PURCHASES

Shares of the Funds may be purchased through Michigan National Bank,
Independence One Brokerage Services, Inc. ("Independence One"), or through
brokers or dealers which have a sales agreement with the distributor. Texas
residents must purchase shares through Federated Securities Corp. at
1-800-618-8573. Investors may purchase shares of the Funds on days on which both
the New York Stock Exchange and the Federal Reserve Wire System are open for
business. In connection with the sale of Fund shares, the distributor may from
time to time offer certain items of nominal value to any shareholder or
investor. The Funds reserve the right to reject any purchase request.

TO PLACE AN ORDER. Investors may call toll-free 1-800-334-2292 to purchase
shares of the Funds through Michigan National Bank or Independence One. In
addition, investors may purchase shares of the Funds by calling their authorized
broker directly. Payments may be made either by check or wire transfer of
federal funds.

Payment by wire must be received before 4:00 p.m. (Eastern time). It is the
responsibility of Michigan National Bank, Independence One or broker/dealers to
transmit orders to the Funds by 5:00 p.m. (Eastern time) in order for shares to
be purchased at that day's price. For settlement of an order, payment must be
received within three business days of receipt of the order by check or wire
transfer. To purchase by check, the check must be included with the order and
made payable to "Independence One (include name of Fund)." Checks must be
converted into federal funds to be considered received.

Federal funds should be wired as follows: Federated Shareholder Services Company
c/o Michigan National Bank, Farmington Hills, Michigan; Account Number:
6856238933; For Credit to: Independence One (include name of Fund); Fund Number
(this number can be found on the account statement or by contacting the Fund);
Group Number or Order Number; Nominee or Institution Name; and ABA Number
072000805.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in each Fund is $1,000. Subsequent investments
must be in amounts of at least $100.

WHAT SHARES COST

Shares of the Funds are sold at their net asset value next determined after an
order is received. There are no sales charges imposed by the Funds.

The net asset value is determined at the close of trading (normally 4:00 p.m.
Eastern time) on the New York Stock Exchange, Monday through Friday, except on:
(i) days on which there are not sufficient changes in the value of a Fund's
portfolio securities that its net asset value might be materially affected; (ii)
days during which no shares are tendered for redemption and no orders to
purchase shares are received; and (iii) on the following holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

CERTIFICATES AND CONFIRMATIONS

Share certificates are not issued unless shareholders so request by contacting
their Michigan National Bank or Independence One representative or authorized
broker in writing.

Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.

DIVIDENDS AND CAPITAL GAINS

Dividends are declared daily and paid monthly. Capital gains realized by the
Funds, if any, will be distributed at least once every 12 months. Dividends and
capital gains are automatically reinvested on payment dates in additional shares
without a sales charge unless cash payments are requested by shareholders in
writing to the Funds through their Michigan National Bank or Independence One
representative or authorized broker. Shares purchased with reinvested dividends
are credited to shareholder accounts on the following day.

SYSTEMATIC INVESTMENT PROGRAM

Once a Fund account has been opened, shareholders may add to their investment on
a regular basis in a minimum amount of $100. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Fund shares at the net asset value next determined after an order is
received. A shareholder may apply for participation in this program through
Michigan National Bank by calling 1-800-334-2292.

EXCHANGING SECURITIES FOR FUND SHARES
Fixed Income Fund and Michigan Municipal Bond Fund may accept securities in
exchange for Fund shares. The Funds will allow such exchanges only upon the
prior approval of the Funds and a determination by the Funds and the Adviser
that the securities to be exchanged are acceptable.

Any securities exchanged must meet the investment objective and policies of the
Funds, must have a readily ascertainable market value, and must be liquid. The
market value of any securities exchanged in an initial investment, plus any
cash, must be at least equal to the minimum investment in the Funds. The Funds
acquire the exchanged securities for investment and not for resale.

Securities accepted by the Funds will be valued in the same manner as the Funds
value their assets. The basis of the exchange will depend on the net asset value
of Fund shares on the day the securities are valued. One share of each Fund will
be issued for the 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 or other rights
attached to the securities become the property of the Funds, along with the
securities.

If an exchange is permitted, it will be treated as a sale for federal income tax
purposes. Depending upon the cost basis of the securities exchanged for Fund
shares, a gain or loss may be realized by the investor.

EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------

All shareholders of the Funds are shareholders of the Trust, which consists of
the following additional funds: Independence One Equity Plus Fund; Independence
One Michigan Municipal Cash Fund; Independence One Prime Money Market Fund; and
Independence One U.S. Treasury Money Market Fund. Shareholders of the Funds have
access to these funds ("participating funds") through an exchange program.

With the exception of Independence One Prime Money Market Fund, the
participating funds currently offer only one class of shares. If such funds
should add a second class of shares, exchanges may be limited to shares of the
same class of each fund. Shareholders of the Funds have access to both Class A
Shares and Class B Shares of Independence One Prime Money Market Fund through
the exchange program.

Shares of the Funds may be exchanged for shares of participating funds at net
asset value.

Shareholders who exercise this exchange privilege must exchange shares having a
net asset value at least equal to the minimum investment of the participating
fund into which they are exchanging. Prior to any exchange, the shareholder must
receive a copy of the current prospectus of the participating fund into which
the exchange is being made.

The exchange privilege is available to shareholders residing in any state in
which the participating fund shares being acquired may legally be sold. Upon
receipt by the transfer agent of proper instructions and all necessary
supporting documents, shares submitted for exchange will be redeemed at the
next-determined net asset value. If the exchanging shareholder does not have an
account in the participating fund whose shares are being acquired, a new account
will be established with the same registration, dividend, and capital gain
options as the account from which shares are exchanged, unless otherwise
specified by the shareholder. In the case where the new account registration is
not identical to that of the existing account, a signature guarantee is
required. (See "Redeeming Fund Shares--By Mail.") Exercise of this privilege is
treated as a redemption and new purchase for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may be
realized. The Funds reserve the right to modify or terminate the exchange
privilege at any time. Shareholders would be notified prior to any modification
or termination. Shareholders may obtain further information on the exchange
privilege by calling their Michigan National Bank or Independence One
representative or authorized broker.

EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by telephone to their Michigan National Bank or
Independence One representative by

calling 1-800-334-2292. In addition, investors may exchange shares by calling
their authorized brokers directly. Shares may be exchanged by telephone only
between fund accounts having identical shareholder registrations.

An authorization form permitting the Fund to accept telephone exchange requests
must first be completed. It is recommended that investors requests this
privilege at the time of their initial application. If not completed at the time
of initial application, authorization forms and information on this service can
be obtained through a Michigan National Bank or Independence One representative
or authorized broker. Telephone exchange instructions may be recorded.

Telephone exchange instructions must be received by Michigan National Bank,
Independence One or an authorized broker and transmitted to the transfer agent
before 4:00 p.m. (Eastern time) for shares to be exchanged the same day.
Shareholders who exchange into shares of the Funds will not receive a dividend
from the Funds on the date of the exchange.

Shareholders may have difficulty in making exchanges by telephone through banks,
brokers, and other financial institutions during times of drastic economic or
market changes. If such a case should occur, another method of exchange, such as
"Written Exchange," should be considered.

Any shares held in certificate form cannot be exchanged by telephone but must be
forwarded to Federated Shareholder Services Company, the transfer agent, by a
Michigan National Bank or Independence One representative or authorized broker
and deposited to the shareholder's account before being exchanged.

If reasonable procedures are not followed by the Funds, they may be liable for
losses due to unauthorized or fraudulent telephone instructions.

WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: Independence One Mutual Funds, 27777 Inkster Road,
Mail Code 10-30, Farmington Hills, Michigan 48333-9065. In addition, an investor
may exchange shares by sending a written request to their authorized broker
directly.

REDEEMING SHARES
- --------------------------------------------------------------------------------

Shares are redeemed at their net asset value next determined after Federated
Shareholder Services Company receives the redemption request. Redemptions will
be made on days on which the Funds compute their net asset value. Redemption
requests cannot be executed on days on which the New York Stock Exchange is
closed or on federal holidays restricting wire transfers. Telephone or written
requests for redemption must be received in proper form and can be made to the
Funds through a Michigan National Bank or Independence One representative or
authorized broker. Although the transfer agent does not charge for telephone
redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions of less than $5,000.

BY TELEPHONE. Shares may be redeemed by telephoning a Michigan National Bank or
an Independence One representative at 1-800-334-2292. In addition, shareholders
may redeem shares by calling their authorized brokers directly. Redemption
requests must be received and transmitted to the transfer agent before 4:00 p.m.
(Eastern time) in order for shares to be redeemed at that day's net

asset value. The Michigan National Bank or Independence One representative or
authorized broker is responsible for promptly submitting redemption requests and
providing proper written redemption instructions to the transfer agent.
Registered broker/dealers may charge customary fees and commissions for this
service. If at any time, the Funds shall determine it necessary to terminate or
modify this method of redemption, shareholders would be promptly notified.

For calls received before 4:00 p.m. (Eastern time) proceeds will normally be
wired the next day to the shareholder's account at a domestic commercial bank
that is a member of the Federal Reserve System or a check will be sent to the
address of record. In no event will proceeds be wired or a check sent more than
seven days after a proper request for redemption has been received.

An authorization form permitting the Funds to accept telephone redemption
requests must first be completed. It is recommended that investors request this
privilege at the time of their initial application. If not completed at the time
of initial application, authorization forms and information on this service can
be obtained through a Michigan National Bank or Independence One representative
or authorized broker. Telephone redemption instructions may be recorded.

In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail," should be considered.

If reasonable procedures are not followed by the Funds, they may be liable for
losses due to unauthorized or fraudulent telephone instructions.

BY MAIL. Shareholders may redeem shares by sending a written request to the
Funds through their Michigan National Bank or Independence One representative or
authorized broker. The written request should include the shareholder's name,
the Fund name, the class designation, the account number, and the share or
dollar amount requested. Shareholders redeeming through Michigan National Bank
or Independence One should mail written requests to: Independence One Mutual
Funds, 27777 Inkster Road, Mail Code 10-30, Farmington Hills, Michigan
48333-9065. Investors redeeming through an authorized broker should mail written
requests directly to their broker.

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Funds, or a redemption payable other than to
the shareholder of record, must have signatures on written redemption requests
guaranteed by:

a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation ("FDIC");

a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;

a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund, which is administered by the FDIC; or

any other "eligible guarantor institution", as defined in the Securities
& Exchange Act of 1934.

The Funds do not accept signatures guaranteed by a notary public.

The Funds and their transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Funds may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Funds and their transfer agent reserve the
right to amend these standards at any time without notice.

Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days after receipt of a proper written redemption request.

SYSTEMATIC WITHDRAWAL PROGRAM

Shareholders who desire to receive payments of a predetermined amount may take
advantage of the Systematic Withdrawal Program. Under this program, shares of
the Funds are redeemed to provide for periodic withdrawal payments in an amount
directed by the shareholder. Depending upon the amount of the withdrawal
payments, the amount of the dividends paid and capital gains distributions with
respect to Fund shares, and the fluctuation of the net asset value of Fund
shares redeemed under this program, redemptions may reduce and eventually
deplete, the shareholder's investment in the Fund. For this reason, payments
under this program should not be considered as yield or income on the
shareholder's investment in the Fund. To be eligible to participate in this
program, a shareholder must have an account value of at least $10,000. A
shareholder may apply for participation in this program through Michigan
National Bank by calling 1-800-334-2292.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, the Funds may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $1,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $1,000 because of changes in a Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.

SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------

VOTING RIGHTS

Each share of each Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Funds' operation and for
the election of Trustees under certain circumstances.

Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the Trust's outstanding
shares. As of August 2, 1996, Pierson & Co., the nominee for Michigan National
Bank, may for certain purposes be deemed to control the Funds because it is
owner of record of certain shares of the Funds.

EFFECT OF BANKING LAWS
- --------------------------------------------------------------------------------

The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Bank Holding Company Act of 1956 or
any affiliate thereof from sponsoring, organizing, or controlling a registered,
open-end investment company continuously engaged in the issuance of its shares,
and from issuing, underwriting, selling or distributing securities in general.
Such banking laws and regulations do not prohibit such a holding company or
affiliate from acting as an investment adviser, transfer agent, or custodian to
such an investment company or from purchasing shares of such a company as agent
for and upon the order of their customers.

Some entities providing services to the Trust are subject to such banking laws
and regulations. They believe, based on the advice of their counsel, that they
may perform those services for the Trust contemplated by any agreement entered
into with the Trust without violating those laws or regulations. Changes in
either federal or state statutes and regulations relating to the permissible
activities of banks and their subsidiaries or affiliates, as well as further
judicial or administrative decisions or interpretations of present or future
statutes and regulations, could prevent these entities from continuing to
perform all or a part of the above services. If this happens, the Trustees would
consider alternative means of continuing available investment services. It is
not expected that existing shareholders would suffer any adverse financial
consequences as a result of any of these occurrences.

State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.

TAX INFORMATION
- --------------------------------------------------------------------------------

FEDERAL INCOME TAX

The Funds will pay no federal income tax because each Fund expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
Each Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by any of the other Funds.

Unless otherwise exempt, shareholders of Government Securities Fund and Fixed
Income Fund are required to pay federal income tax on any dividends and other
distributions, including capital gains distributions, received. This applies
whether dividends and distributions are received in cash or as additional
shares. Shareholders are urged to consult their own tax advisers regarding the
status of their accounts under state and local laws. 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 their shares.

MICHIGAN MUNICIPAL BOND FUND TAX CONSIDERATIONS

FEDERAL INCOME TAX. In general, shareholders are not required to pay federal
regular income tax on any dividends received from the Fund that represent net
interest on tax-exempt municipal bonds. However, under the Tax Reform Act of
1986, dividends representing net interest income earned on certain "private
activity" bonds issued after August 7, 1986 may be included in calculating the
federal individual alternative minimum tax or the federal alternative minimum
tax for corporations. The Fund may purchase all types of municipal bonds,
including private activity bonds.

The alternative minimum tax applies when it exceeds the regular tax for the
taxable year. Alternative minimum taxable income is equal to the regular taxable
income of the taxpayer increased by certain "tax preference" items not included
in regular taxable income and reduced by only a portion of the deductions
allowed in the calculation of the regular tax. Thus, should the Fund purchase
any private activity bonds, a portion of the Fund's dividends may be treated as
a tax preference item.

Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
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 their shares.

These tax consequences apply whether dividends are received in cash or as
additional shares.

MICHIGAN TAXES. Under existing Michigan laws, distributions made by the Fund
will not be subject to Michigan personal income taxes to the extent that such
distributions qualify as "exempt-interest dividends" under the Internal Revenue
Code of 1986, as amended, and represent (i) interest from obligations of
Michigan or any of its political subdivisions or (ii) income from obligations of
the United States government which are exempted from state income taxation by a
law of the United States.

That portion of a shareholder's shares in the Fund representing (i) bonds or
other similar obligations of Michigan or its political subdivisions or, (ii)
obligations of the United States which are exempt from taxation by a law of the
United States, and dividends paid by the Fund representing interest payments on
such securities, will be exempt from the Michigan intangibles tax. 1995 Public
Act 5 repeals the intangibles tax effective January 1, 1998.

Distributions by the Fund are not subject to the Michigan Single Business Tax to
the extent that such distributions are derived from interest on obligations of
Michigan or its political subdivisions, or obligations of the United States
government that are exempt from state taxation by a law of the United States.
Certain municipalities in Michigan also impose an income tax on individuals and
corporations. However, to the extent that the dividends from the Fund are exempt
from federal regular income taxes, such dividends also will be exempt from
Michigan municipal income taxes.

OTHER STATE AND LOCAL TAXES. Income from the Fund is not necessarily free from
state income taxes in states other than Michigan or from personal property
taxes. Shareholders are urged to consult their own tax advisers regarding the
status of their accounts under state and local tax laws.

PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

From time to time the Funds advertise their total return and yield, and, in the
case of Michigan Municipal Bond Fund, tax-equivalent yield.

Total return represents the change, over a specific period of time, in the value
of an investment in the Funds after reinvesting all income and capital gain
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.

The yields of the Funds are calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by each Fund
over a thirty-day period by the offering price per share of each Fund on the
last day of the period. This number is then annualized using semi-annual
compounding. The tax-equivalent yield of Michigan Municipal Bond Fund is
calculated similarly to the yield but is adjusted to reflect the taxable yield
that Michigan Municipal Bond Fund would have had to earn to equal its actual
yield, assuming a specific tax rate. The yield and tax-equivalent yield do not
necessarily reflect income actually earned by each Fund and, therefore, may not
correlate to the dividends or other distributions paid to shareholders.

From time to time, advertisements for the Funds may refer to ratings, rankings,
and other information in certain financial publications and/or compare their
performance to certain indices.

Fixed Income Fund is the successor to the portfolio of a common trust fund
managed by the Adviser. At the Fund's commencement of operations, the assets
from the common trust fund was transferred to the Fund in exchange for Fund
shares. The Adviser has represented that the Fund's investment objective,
policies and limitations are in all material respects identical to those of the
common trust fund.

The Fund's average annual total return for the fiscal year ended April 30, 1996
was 6.34%. The Fund's cumulative total return for the period from January 3,
1995 (date of commencement of operations of the common trust fund) to April 30,
1996, was 11.96%. The average annual total return for the same period was 8.87%.
The quoted performance data includes the performance of the common trust fund
for periods before the Fund's registration statement became effective, as
adjusted to reflect the Fund's anticipated expenses as set forth in the "Summary
of Fund Expenses" section of this prospectus. The common trust fund was not
registered under the Investment Company Act of 1940 ("1940 Act") and therefore
was not subject to certain investment restrictions that are imposed by the 1940
Act. If the common trust fund had been registered under the 1940 Act, the
performance may have been adversely affected.

INDEPENDENCE ONE
MUTUAL FUNDS

Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

INVESTMENT ADVISER
Michigan National Bank

INVESTMENT SUB-ADVISER
(Government Securities Fund only)
Independence One Capital Management Corporation

27777 Inkster Road
Mail Code 10-52
Farmington Hills, Michigan 48333-9065

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

CUSTODIAN
Michigan National Bank
27777 Inkster Road
Mail Code 10-30
Farmington Hills, Michigan 48333-9065

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company

P.O. Box 8600
Boston, Massachusetts 02266-8600
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
One Mellon Bank Center
Pittsburgh, Pennsylvania 15219

Independence One

U.S. Government Securities
Fund
Fixed Income Fund
Michigan Municipal Bond
Fund
(Portfolios of Independence One Mutual Funds)

Prospectus dated
August 31, 1996

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[LOGO OF MICHIGAN NATL. BANK]
Michigan National Bank
Investment Adviser

Cusip 453777864
Cusip 453777856
Cusip 453777807
G01285-02 (8/96)

INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE MICHIGAN MUNICIPAL BOND FUND
(PORTFOLIOS OF INDEPENDENCE ONE MUTUAL FUNDS)
STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information should be read with the
prospectus of Independence One U.S. Government Securities Fund,
Independence One Fixed Income Fund and Independence One Michigan
Municipal Bond Fund (collectively, the "Funds" or individually, the
"Fund"), portfolios of Independence One Mutual Funds (the "Trust")
dated August 31, 1996. This Statement is not a prospectus. You may
request a copy of the prospectus free of charge by calling 1-800-334-
2292.

FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated August 31, 1996

FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the Funds
and is a subsidiary of Federated Investors.
Cusip 453777807
Cusip 453777864
Cusip 453777856
G01285-03(8/96)

GENERAL INFORMATION ABOUT THE FUND 4

INVESTMENT OBJECTIVE AND POLICIES OF THE
FUNDS 4

ACCEPTABLE INVESTMENTS 4
FIXED INCOME FUND 5
MICHIGAN MUNICIPAL BOND FUND 18
PORTFOLIO INVESTMENTS AND STRATEGIES 20

WHEN-ISSUED AND DELAYED DELIVERY
TRANSACTIONS 20
REPURCHASE AGREEMENTS 20
REVERSE REPURCHASE AGREEMENTS 21
PORTFOLIO TURNOVER 22
INVESTMENT LIMITATIONS 22

MICHIGAN MUNICIPAL BOND FUND INVESTMENT
RISKS 31

INDEPENDENCE ONE MUTUAL FUNDS MANAGEMENT 33

OFFICERS AND TRUSTEES 33
FUND OWNERSHIP 36
TRUSTEES' COMPENSATION 36
TRUSTEE LIABILITY 37
MASSACHUSETTS PARTNERSHIP LAW 37
INVESTMENT ADVISORY SERVICES 38

ADVISER AND SUB-ADVISER TO THE FUNDS 38
ADVISORY AND SUB-ADVISORY FEES 38

BROKERAGE TRANSACTIONS 40

OTHER SERVICES 41

TRUST ADMINISTRATION 41
CUSTODIAN 42
TRANSFER AGENT AND DIVIDEND DISBURSING
AGENT 42
INDEPENDENT AUDITORS 42
PURCHASING SHARES 42

CONVERSION TO FEDERAL FUNDS 42
DETERMINING NET ASSET VALUE 43

DETERMINING MARKET VALUE OF SECURITIES 43

EXCHANGE PRIVILEGE 44

REDEEMING SHARES 44

REDEMPTION IN KIND 44
TAX STATUS 45

THE FUNDS' TAX STATUS 45
SHAREHOLDER'S TAX STATUS 46
CAPITAL GAINS 46
TOTAL RETURN 47

YIELD 48

TAX-EQUIVALENT YIELD 49

TAX-EQUIVALENCY TABLE 49
PERFORMANCE COMPARISONS 51

ECONOMIC AND MARKET INFORMATION 53
DURATION 54
FINANCIAL STATEMENTS 54

APPENDIX 55

GENERAL INFORMATION ABOUT THE FUND

The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated January 9, 1989. This Statement of Additional
Information relates only to three portfolios of securities which are as
follows: Independence One U.S. Government Securities Fund ("Government
Securities Fund"), Independence One Fixed Income Fund ("Fixed Income Fund")
and Independence One Michigan Municipal Bond Fund ("Michigan Municipal Bond
Fund").
INVESTMENT OBJECTIVE AND POLICIES OF THE FUNDS

The prospectus discusses the objective of each Fund and the policies they
employ to achieve those objectives. The following discussion supplements
the description of the Funds' investment policies in the prospectus.
The Funds' respective investment objectives cannot be changed without
approval of shareholders. Except as otherwise noted, the investment
policies described below may be changed by the Board of Trustees (the
"Trustees") without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS
Government Securities Fund invests only in U.S. government securities which
are either issued or guaranteed by the U.S. government, its agencies or
instrumentalities.
Fixed Income Fund pursues its investment objective by investing primarily
in fixed income securities that, at the time of purchase, are rated A or
higher by Moody's Investors Service ("Moody's"), Standard & Poor's Ratings
Group ("S&P"), or Fitch Investors Service ("Fitch") or, if unrated, are of
comparable quality to securities with such ratings as determined by the
Fund's investment adviser.

Michigan Municipal Bond Fund invests primarily in a portfolio of municipal
securities, which are exempt from federal regular income tax and the
personal income taxes imposed by the State of Michigan and Michigan
municipalities ("Michigan Municipal Securities"). These securities include
those issued by or on behalf of the State of Michigan and Michigan
municipalities, as well as those issued by other states, territories, and
possessions of the United States which are exempt from federal regular
income tax and the personal income taxes imposed by the State of Michigan
and Michigan municipalities.

FIXED INCOME FUND
Fixed Income Fund may invest in money market instruments such as:
oinstruments of domestic and foreign banks and savings associations
if they have capital, surplus, and undivided profits of over
$100,000,000, or if the principal amount of the instrument is
federally insured;
ocommercial paper rated, at the time of purchase, A-1 or better by
S&P, Prime-1 or better by Moody's, or F-1 or better by Fitch or, if
unrated, are of comparable quality as determined by the Fund's
investment Adviser;
otime and savings deposits whose accounts are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC"), or in institutions whose accounts
are insured by the Savings Association Insurance Fund, which is also
administered by the FDIC, including certificates of deposit issued
by, and other time deposits in, foreign branches of BIF-insured
banks; or
obankers' acceptances.

PRIVATELY ISSUED MORTGAGE-RELATED SECURITIES
Privately issued mortgage-related securities generally represent an
ownership interest in federal agency mortgage pass-through securities
such as those issued by Government National Mortgage Association. The
terms and characteristics of the mortgage instruments may vary among
pass-through mortgage loan pools. The market for such mortgage-related
securities 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 makes
government-related pools highly liquid.

RESETS OF INTEREST RATES
The interest rates paid on certain mortgage-backed securities in which
Fixed Income Fund invests generally are readjusted at intervals of one
year or less to an increment over some predetermined interest rate
index. There are two main categories of indices: those based on U.S.
Treasury securities and those derived from a calculated measure, such
as a cost of funds index or a moving average of mortgage rates.
Commonly utilized indices include the one-year and five-year constant
maturity Treasury Note rates, the three-month Treasury Bill rate, the
six-month Treasury Bill rate, rates on longer-term Treasury
securities, the National Median Cost of Funds, the one-month or three-
month LIBOR, the prime rate of a specific bank, or commercial paper
rates. Some indices, such as the one-year constant maturity Treasury
Note rate, closely mirror changes in market interest rate levels.
Others tend to lag changes in market rate levels and tend to be
somewhat less volatile.

To the extent that the adjusted interest rate on the mortgage security
reflects current market rates, the market value of an adjustable rate
mortgage security will tend to be less sensitive to interest rate
changes than a fixed rate debt security of the same stated maturity.
However, adjustable rate mortgage securities which use indices that
lag changes in market rates should experience greater price volatility
than adjustable rate mortgage securities that closely mirror the
market. Certain residual interest tranches of CMOs may have adjustable
interest rates that deviate significantly from prevailing market
rates, even after the interest rate is reset, and are subject to
correspondingly increased price volatility. In the event the Fund
purchases such residual interest mortgage securities, it will factor
in the increased interest and price volatility of such securities when
determining its dollar-weighted average duration.
CAPS AND FLOORS
The underlying mortgages which collateralize the ARMS, CMOs, and
REMICs in which Fixed Income Fund invests will frequently have caps
and floors which limit the maximum amount by which the loan rate to
the residential borrower may change up or down: (1) per reset or
adjustment interval, and (2) over the life of the loan. Some
residential mortgage loans restrict periodic adjustments by limiting
changes in the borrower's monthly principal and interest payments
rather than limiting interest rate changes. These payment caps may
result in negative amortization.
The value of mortgage securities in which the Fund invests may be
affected if market interest rates rise or fall faster and farther than
the allowable caps or floors on the underlying residential mortgage
loans. Additionally, even though the interest rates on the underlying
residential mortgages are adjustable, amortization and prepayments may

occur, thereby causing the effective maturities of the mortgage
securities in which the Fund invests to be shorter than the maturities
stated in the underlying mortgages.
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities
Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under federal securities law and is generally sold to
institutional investors, such as the Fund, who agree that they are
purchasing the paper for investment purposes and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Fund through or with the assistance
of the issuer or investment dealers who make a market in Section 4(2)
commercial paper, thus providing liquidity. The Fund believes that
Section 4(2) commercial paper and possibly certain other restricted
securities which meet the criteria for liquidity established by the
Trustees are quite liquid. The Fund intends, therefore, to treat the
restricted securities which meet the criteria for liquidity
established by the Trustees, including Section 4(2) commercial paper,
as determined by the Fund's investment adviser, as liquid and not
subject to the investment limitation applicable to illiquid
securities. In addition, because Section 4(2) commercial paper is
liquid, the Fund intends to not subject such paper to the limitation
applicable to restricted securities.

The ability of the Trustees to determine the liquidity of certain
restricted securities is permitted under a Securities and Exchange

Commission staff position set forth in the adopting release for Rule
144A (the "Rule") under the Securities Act of 1933. 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 the Rule.
The Fund believes that the staff of the Securities and Exchange
Commission has left the question of determining the liquidity of all
restricted securities (eligible for resale under the Rule) to the
Trust's Board. The Board considers the following criteria in
determining the liquidity of certain restricted securities:
othe frequency of trades and quotes for the security;
othe number of dealers willing to purchase or sell the security and
the number of other potential buyers;
odealer undertakings to make a market in the security; and
othe nature of the security and the nature of the marketplace trades.
VARIABLE RATE DEMAND NOTES
Variable rate demand notes are long-term corporate debt instruments
that have variable or floating interest rates and provide the Fund
with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade
at par. The interest rate may float or be adjusted at regular
intervals (ranging from daily to annually), and is normally based on
an interest rate index or a published interest rate. Many variable
rate demand notes allow the Fund to demand the repurchase of the
security on not more than seven days' prior notice. Other notes only

permit the Fund to tender the security at the time of each interest
rate adjustment or at other fixed intervals.
LENDING OF PORTFOLIO SECURITIES
The collateral received when the 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 the Fund or the borrower. The
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. The Fund does not have the right to vote securities
on loan. In circumstances where the Fund does not, the Fund would
terminate the loan and regain the right to vote if that were
considered important with respect to the investment.
FUTURES AND OPTIONS TRANSACTIONS
As a means of reducing fluctuations in the net asset value of shares
of the Fund, the Fund may attempt to hedge its portfolio by buying and
selling financial futures contracts, buying put options on portfolio
securities and put options on financial futures contracts for
portfolio securities, and writing call options on futures contracts.
The Fund also may write covered call options on portfolio securities
to attempt to increase its current income.
The effective use of futures and options as hedging techniques depends
on the correlation between their prices and the behavior of the Fund's
portfolio securities as well as the Fund's investment adviser's
ability to accurately predict the direction of stock prices, interest
rates and other relevant economic factors. Daily limits on the

fluctuation of futures and options prices could cause the Fund to be
unable to timely liquidate its futures or options position and cause
it to suffer greater losses than would otherwise be the case. In this
regard, the Fund may be unable to anticipate the extent of its losses
from futures transactions.
The Fund will maintain its 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 a nationally-recognized exchange which
provides a secondary market for options of the same series. The Fund
currently does not intend to invest more than 5% of its total assets
in options transactions.
FUTURES CONTRACTS. The Fund may purchase and sell financial futures
contracts to hedge against the effects of changes in the value of
portfolio securities due to anticipated changes in interest rates and
market conditions without necessarily buying or selling the
securities. The Fund will not engage in futures transactions for
speculative purposes.
A futures contract is a firm commitment by two parties: 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.
For example, in the fixed income securities market, prices generally
move inversely to interest rates. A rise in rates means a drop in
price. Conversely, a drop in rates typically means a rise in price. In
order to hedge its holdings of fixed income securities against a rise
in market interest rates, the Fund could enter into contracts to
deliver securities at a predetermined price (i.e., "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" (agree to purchase securities in the
future at a predetermined price) to hedge against a decline in market
interest rates.
"MARGIN" IN FUTURES TRANSACTIONS. Unlike the purchase or sale of a
security, the Fund does not pay or receive money upon the purchase or
sale of a futures contract. Rather, the Fund is 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 initial margin in futures transactions
does not involve the borrowing of funds by the 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 the Fund upon
termination of the futures contract, assuming all contractual
obligations have been satisfied.
A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the
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 the Fund, but is instead settlement between the
Fund and the broker of the amount one would owe the other if the
futures contract expired. In computing its daily net asset value, the
Fund will mark to market its open futures positions.
The Fund is also required to deposit and maintain margin when it
writes call options on futures contracts.

The Fund will comply with the following restrictions when purchasing
and selling futures contracts. First, the Fund will not participate in
futures transactions if the sum of its initial margin deposits on open
contracts will exceed 5% of the market value of the Fund's total
assets, after taking into account the unrealized profits and losses on
those contracts it has entered into. Second, the Fund will not enter
into these contracts for speculative purposes. Third, since the Fund
does not constitute a commodity pool, it will not market itself as
such, nor serve as a vehicle for trading in the commodities futures or
commodity options markets. Connected with this, the Fund will disclose
to all prospective investors the limitations on its futures and
options transactions, and make clear that these transactions are
entered into only for bona fide hedging purposes, or other permissible
purposes pursuant to regulations promulgated by the Commodity Futures
Trading Commission ("CFTC"). Finally, because the Fund will submit to
the CFTC special calls for information, the Fund will not register as
a commodities pool operator.
PUT OPTIONS ON FINANCIAL FUTURES CONTRACTS. The Fund may purchase
listed put options on financial futures contracts. The Fund would use
these options solely to protect portfolio securities against decreases
in value resulting from market factors such as an anticipated increase
in rates.
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, the Fund will normally close out its option by selling an
identical option. If the hedge is successful, the proceeds received by
the Fund upon the sale of the second option will be large enough to
offset both the premium paid by the Fund for the original option plus
the decrease in value of the hedged securities.
Alternatively, the 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. The Fund would
then deliver the futures contract in return for payment of the strike
price. If the 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.

CALL OPTIONS ON FINANCIAL FUTURES CONTRACTS. In addition to
purchasing put options on futures, the Fund may write listed call
options on financial futures contracts or over-the-counter call
options on future contracts to hedge its portfolio against an increase
in market interest rates. When the 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, causing the prices of
futures to decrease, the Fund's obligation under a call option on a
future (to sell a futures contract) costs less to fulfill causing the
value of the Fund's call option position to increase.

In other words, as the underlying futures price goes down below the
strike price, the buyer of the option has no reason to exercise the
call, so that the Fund keeps the premium received for the option. This
premium can substantially offset the drop in value of the Fund's
portfolio securities.
Prior to the expiration of a call written by the Fund, or exercise of
it by the buyer, the 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 the Fund for the
initial option. The net premium income of the Fund will then
substantially offset the realized decrease in value of the hedged
securities.
The Fund will not maintain open positions in futures contracts it has
sold or call 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 portfolio, plus or minus the
unrealized gain or loss on those open positions, adjusted for the
correlation of volatility between the hedged securities and the
futures contracts. If this limitation is exceeded at any time, the
Fund will take prompt action to close out a sufficient number of open
contracts to bring its open futures and options positions within this
limitation.
PURCHASING PUT OPTIONS ON PORTFOLIO SECURITIES. The Fund may purchase
put options on portfolio securities to protect against price movements
in particular securities in its portfolio. A put option gives the
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. The Fund may purchase these put options as long as they

are listed on a recognized options exchange and the underlying stocks
are held in its portfolio.
WRITING COVERED CALL OPTIONS ON PORTFOLIO SECURITIES. The Fund may
also write call options on securities either held in its portfolio or
which it has the right to obtain without payment of further
consideration or for which it has segregated cash in the amount of any
additional consideration. As the writer of a call option, the Fund has
the obligation, upon exercise of the option during the option period,
to deliver the underlying security upon payment of the exercise price.
The call options which the Fund writes must be listed on a recognized
options exchange. Writing of call options by the Fund is intended to
generate income for the Fund and thereby protect against price
movements in particular securities in the Fund's portfolio.
OVER-THE-COUNTER OPTIONS. The 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 the Fund and not traded on an exchange.
RISKS. When the Fund uses futures and options on futures as hedging
devices, there is a risk that the prices of the securities subject to
the futures contracts may not correlate perfectly with the prices of
the securities in the Fund's portfolio. This may cause the futures
contact and any related options to react differently than the
portfolio securities to market changes. In addition, the Fund's
adviser could be incorrect in its expectations about the direction or
extent of market factors such as stock price movements. In these
events, the Fund may lose money on the futures contract or option.
It is not certain that a secondary market for positions in futures
contracts or for options will exist at all times. Although the Fund's
adviser will consider liquidity before entering into these

transactions, there is no assurance that a liquid secondary market on
an exchange or otherwise will exist for any particular futures
contract or option at any particular time. The Fund's ability to
establish and close out futures and options positions depends on this
secondary market.

To minimize risks, the Fund may not purchase or sell futures contracts
or related options if immediately thereafter the sum of the amount of
margin deposits on the Fund's existing futures positions and premiums
paid for related options would exceed 5% of the market value of the
Fund's total assets. When the Fund purchases futures contracts, an
amount of cash and cash equivalents, equal to the underlying commodity
value of the futures contracts (less any related margin deposits),
will be deposited in a segregated account with the Fund's custodian
(or the broker, if legally permitted) to collateralize the position
and thereby insure that the use of such futures contract is
unleveraged. When the Fund sells futures contacts, it will either own
or have the right to receive the underlying future or security, or
will make deposits to collateralize the position as discussed above.
WARRANTS
The Fund may invest in warrants. Warrants are basically options to
purchase common stock at a specific price (usually at a premium above
the market value of the optioned common stock at issuance) valid for a
specific period of time. Warrants may have a life ranging from less
than a year to twenty years or may be perpetual. However, most
warrants have expiration dates after which they are worthless. In
addition, if the market price of the common stock does not exceed the
warrant's exercise price during the life of the warrant, the warrant

will expire as worthless. Warrants have no voting rights, pay no
dividends, and have no rights with respect to the assets of the
corporation issuing them. The percentage increase or decrease in the
market price of the warrant may tend to be greater than the percentage
increase or decrease in the market price of the optioned common stock.
MICHIGAN MUNICIPAL BOND FUND
MICHIGAN MUNICIPAL SECURITIES
The Michigan Municipal Securities in which Michigan Municipal Bond
Fund invests have the characteristics set forth in the prospectus.
Examples of Michigan Municipal Securities are:
omunicipal notes and municipal commercial paper;
oserial bonds sold with differing maturity dates;
otax anticipation notes sold to finance working capital needs of
municipalities;
obond anticipation notes sold prior to the issuance of longer-term
bonds;
opre-refunded municipal bonds; and
ogeneral obligation bonds secured by a municipality pledge of
taxation.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from another financial
institution irrevocable letters of credit or guarantees and give the
Fund 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
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.
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 Fund may purchase municipal securities in the form of
participation interests which represent undivided proportional
interests in lease payments by a governmental or non- profit entity.
The lease payments and other rights under the lease provide for and
secure the payments on the certificates. Lease obligations may be
limited by municipal charter or the nature of the appropriation for
the lease. In particular, lease obligations may be subject to periodic
appropriation. If the entity does not appropriate funds for future
lease payments, the entity cannot be compelled to make such payments.
Furthermore, a lease may provide that the certificate trustee cannot
accelerate lease obligations upon default. The trustee would only be
able to enforce lease payments as they became due. In the event of
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
investment adviser, under the authority delegated by the Trustees,
will base its determination on the following factors:
owhether the lease can be terminated by the lessee;

othe potential recovery, if any, from a sale of the leased property
upon termination of the lease;
othe lessee's general credit strength (e.g., its debt,
administrative, economic and financial characteristics and
prospects);
othe 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 non-appropriation"); and
oany credit enhancement or legal recourse provided upon an event of
non-appropriation or other termination of the lease.
PORTFOLIO INVESTMENTS AND STRATEGIES

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Funds. Settlement dates may be a month
or more after entering into these transactions, and the market values of
the securities purchased may vary from the purchase prices. 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 a 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 a Fund's assets.
REPURCHASE AGREEMENTS
The Funds or their custodian will take possession of the securities subject
to repurchase agreements and these securities will be marked to market
daily. To the extent that the original seller does not repurchase the

securities from the Funds, the Funds 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 the Funds might be delayed pending court action. The Funds
believe that under the regular procedures normally in effect for custody of
a Fund's portfolio securities subject to repurchase agreements, a court of
competent jurisdiction would rule in favor of the Fund and allow retention
or disposition of such securities. The Funds will only enter into
repurchase agreements with banks and other recognized financial
institutions such as broker/dealers which are deemed by the Funds' adviser
to be creditworthy pursuant to guidelines established by the Trustees.

From time to time, such as when suitable Michigan municipal bonds are not
available, Michigan Municipal Bond Fund may invest a portion of its assets
in cash. Any portion of the Fund's assets maintained in cash will reduce
the amount of assets in Michigan municipal bonds and thereby reduce the
Fund's yield. Michigan Municipal Bond Fund will use repurchase agreements
only as temporary investments during times of unusual market conditions for
defensive purposes and to maintain liquidity.

REVERSE REPURCHASE AGREEMENTS
Fixed Income Fund and Michigan Municipal Bond 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 stipulated date in the future the Fund

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 the 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 the Fund will be able to avoid selling portfolio instruments at a
disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund, in
a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These securities are marked to
market daily and maintained until the transaction is settled.
PORTFOLIO TURNOVER

The Funds may trade or dispose of portfolio securities as considered
necessary to meet their respective investment objective. For the fiscal
years ended April 30, 1996 and 1995, Government Securities Fund's portfolio
turnover rates were 104% and 75%, respectively. For the period from
October 23, 1995 (date of initial public investment) through April 30,
1996, Fixed Income Fund's portfolio turnover rate was 4%. For the period
from November 20, 1995 (date of initial public investment) through April
30, 1996, Michigan Municipal Bond Fund's portfolio turnover rate was 39%.

INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN

The Funds will not sell any securities short or purchase any
securities on margin but may obtain such short- term credits as may be
necessary for clearance of transactions. With respect to Fixed Income

Fund, the deposit or payment by the Fund of initial or variation
margin in connection with financial futures contracts or related
options transactions is not considered the purchase of a security on
margin.

ISSUING SENIOR SECURITIES AND BORROWING MONEY
Government Securities Fund will not issue senior securities except
that it may borrow money in amounts up to one-third of the value of
its total assets, including the amounts borrowed.
Government Securities Fund will not borrow money for investment
leverage, but rather as a temporary, extraordinary, or emergency
measure to facilitate management of the portfolio by enabling the Fund
to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Fund
will not purchase any securities while borrowings in excess of 5% of
total assets are outstanding.

Fixed Income Fund and Michigan Municipal Bond Fund will not issue
senior securities except that they may borrow money and engage in
reverse repurchase agreements in amounts up to one-third of the value
of their respective total assets, including the amounts borrowed.
Fixed Income Fund and Michigan Municipal Bond Fund 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 the
Funds to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. Fixed
Income Fund and Michigan Municipal Bond Fund will not purchase any

securities while borrowings in excess of 5% of their respective total
assets are outstanding.
CONCENTRATION OF INVESTMENTS
Government Securities Fund will not concentrate in any one industry.
Fixed Income Fund will not invest 25% or more of the value of its
total assets in any one industry, except that the Fund may invest 25%
or more 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.

Michigan Municipal Bond 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 or in industrial development
bonds or other securities, the interest upon which is paid from
revenues of similar types of projects. However, the Fund may invest as
temporary investments 25% or more of the value of its assets in cash
or cash items, securities issued or guaranteed by the U.S. government,
its agencies, or instrumentalities, or instruments secured by these
money market instruments, i.e., repurchase agreements.
UNDERWRITING
Government Securities Fund and Michigan Municipal Bond Fund will not
underwrite any issue of securities except as either 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.
Fixed Income Fund will not underwrite any issue of securities except
as it may be deemed to be an underwriter under the Securities Act of

1933 in connection with the sale of restricted securities in
accordance with its investment objective, policies, and limitations.
LENDING CASH OR SECURITIES
Government Securities Fund will not lend any of its assets. (This
shall not prevent the purchase or holding of U.S. Treasury securities,
repurchase agreements, or other transactions which are permitted by
the Fund's investment objective and policies.)
Fixed Income Fund will not lend any of its assets except portfolio
securities up to one-third of the value of its total assets. This
shall not prevent the Fund from purchasing or holding U.S. government
obligations, money market instruments, 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 the Fund's investment objectives,
policies, and limitations.
Michigan Municipal Bond Fund will not lend any of its assets except
that it may acquire publicly or non-publicly issued municipal bonds or
temporary investments or enter into repurchase agreements in
accordance with its investment objective, policies, and limitations.
PLEDGING ASSETS
Fixed Income Fund and Michigan Municipal Bond Fund will not mortgage,
pledge, or hypothecate any assets except to secure permitted
borrowings. With respect to Fixed Income Fund, for purposes of this
limitation, the following are not deemed to be pledges: margin
deposits for the purchase and sale of futures contract and related
options, and segregation or collateral arrangements made in connection
with options activities or the purchase of securities on a when-issued
basis.

INVESTING IN REAL ESTATE
Fixed Income Fund will not purchase or sell real estate, including
limited partnership interests, although it 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.
Michigan Municipal Bond Fund will not purchase or sell real estate,
including limited partnership interests, although it may invest in
municipal bonds secured by real estate or interests in real estate.
INVESTING IN COMMODITIES, COMMODITY CONTRACTS, OR COMMODITY FUTURES
CONTRACTS
Fixed Income Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts except to the extent that
the Fund may engage in transactions involving futures contracts and
related options.
Michigan Municipal Bond Fund will not buy or sell commodities,
commodity contracts, or commodities futures contracts.

DIVERSIFICATION OF INVESTMENTS
With respect to 75% of the value of its assets, Fixed Income Fund will
not purchase securities of any one issuer (other than securities
issued or guaranteed by the government of the United States or its
agencies or instrumentalities) if, as a result, more than 5% of the
value of its total assets would be invested in the securities of that
issuer. Also, the Fund will not acquire more than 10% of the
outstanding voting securities of any one issuer.

The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified before
any material change in these limitations becomes effective.
PLEDGING ASSETS

Government Securities Fund will not mortgage, pledge, or hypothecate
any assets except to secure permitted borrowings. In these 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 borrowing.
INVESTING IN ILLIQUID SECURITIES
Government Securities Fund will not invest more than 15% of the value
of its net assets in securities which are not readily marketable of
which are otherwise considered illiquid, including repurchase
agreements providing for settlement more than seven days after notice.
Fixed Income Fund will not invest more than 15% of the value of its
net assets in illiquid obligations, including repurchase agreements
providing for settlement in more than seven days after notice, over-
the-counter options, certain securities not determined by the Trustees
to be liquid, and non-negotiable fixed time deposits with maturities
over seven days.
Michigan Municipal Bond Fund will not invest more than 15% of the
value of its net assets in illiquid obligations, including repurchase
agreements providing for settlement in more than seven days after
notice, and certain restricted securities.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
Fixed Income Fund and Michigan Municipal Bond Fund can each acquire up
to 3 per centum of the total outstanding stock of other investment

companies. The Funds will not be subject to any other limitations with
regard to the acquisition of securities of other investment companies
so long as the public offering price of each Fund's shares does not
include a sales charge exceeding 1 1/2 percent. The Funds will
purchase securities of investment companies only in open-market
transactions involving only customary broker's commissions. With
respect to Fixed Income Fund, these limitations are not applicable if
the securities are acquired in a merger, consolidation,
reorganization, or acquisition of assets, nor are they applicable with
respect to securities of investment companies that have been exempted
from registration under the Investment Company Act of 1940. With
respect to Michigan Municipal Bond Fund, these limitations are not
applicable if the securities are acquired in a merger, consolidation,
reorganization, or acquisition of assets.
INVESTING IN RESTRICTED SECURITIES
Fixed Income Fund and Michigan Municipal Bond Fund will not invest
more than 10% of the value of their respective total assets in
securities subject to restrictions on resale under the federal
securities laws except, with respect to Fixed Income Fund, for certain
restricted securities which meet the criteria for liquidity as
established by the Trustees.
INVESTING IN MINERALS
Fixed Income Fund and Michigan Municipal Bond Fund will not purchase
or sell interests in oil, gas, or other mineral exploration or
development programs, or leases, although each Fund may invest in the
securities of issuers which invest in or sponsor such programs.
INVESTING IN NEW ISSUERS
Fixed Income Fund will not invest more than 5% of the value of its
total assets in securities of issuers which have less than three years

of continuous operations, including the operation of any predecessor.
The Fund will apply this limitation by reference to the issuer of a
CMO (or other asset-backed security) rather than requiring the CMO (or
other asset-backed security) itself to have at least three years of
continuous operations.
Michigan Municipal Bond Fund will not invest more than 5% of the value
of its total assets in securities of issuers where the principal and
interest are the responsibility of companies (or guarantors, where
applicable) with less than three years of continuous operations,
including the operation of any predecessor.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES
OF THE TRUST
Fixed Income Fund and Michigan Municipal Bond Fund will not purchase
or retain the securities of any issuer if the officers and Trustees of
the Trust or its investment adviser owning individually more than 1/2
of 1% of the issuer's securities together own more than 5% of the
issuer's securities.
INVESTING IN PUT OPTIONS
Fixed Income Fund will not purchase put options on securities unless
the securities are held in the Fund's portfolio and not more than 5%
of the value of the Fund's total assets would be invested in premiums
on open put option positions.
WRITING COVERED CALL OPTIONS
Fixed Income Fund will not write call options on securities unless the
securities 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.

INVESTING IN WARRANTS
Fixed Income Fund will not invest more than 5% of its assets in
warrants. No more than 2% of the Fund's net assets, to be included
within the overall 5% limit on investments in warrants, may be
warrants which are not listed on the New York Stock Exchange or the
American Stock Exchange.
PURCHASING SECURITIES TO EXERCISE CONTROL
Fixed Income Fund will not purchase securities of a company for
purpose of exercising control or management.
DEALING IN PUTS AND CALLS
Michigan Municipal Bond Fund will not buy or sell puts, calls,
straddles, spreads, or any combination of these.

Except with respect 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.

The Funds did not borrow money, pledge securities or invest in repurchase
agreements in excess of 5% of the value of Fund net assets during the last
fiscal period and have no present intent to do so during the coming fiscal
year.
For purposes of the Funds' policies and limitations, each Fund considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings association having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of investment
to be "cash items."

MICHIGAN MUNICIPAL BOND FUND INVESTMENT RISKS

Michigan's economy continues to be among the most cyclical of states,
remaining heavily dependent on domestic auto production and durable goods
consumption. While manufacturing comprised 21% of the total jobs in the
state in 1994, it comprises a lesser share than in the 1970s when it was
35%. The automobile industry has reduced its share of employment to 6.2%
of total employment, compared with 10.8% in 1979. In fact, Michigan's
economy continues to shift away from durable good manufacturing to a more
diversified base reliant on services and trade. In 1994, for the first
time since 1986, per capita income for the State exceeded the national
level ($22,173 vs. $21,699).
As of December, 1995, unemployment stood at 4.7%, below the national level
of 5.2%. The economic recovery from the early 1990s recession has proved
hearty in Michigan as employment levels have reached an all-time high,
attracting more workers into the labor force. Personal income, which grew
9.4% in 1994, is estimated to have increased to 7.1% in 1995, outperforming
both the region and the nation. The State expects personal income and
employment growth to slow in 1996.

On August 19, 1993, the Governor of Michigan signed into law Act 145,
Public Acts of Michigan, 1993 ("Act 145") a measure which significantly
impacted financing of primary and secondary school operations and which has
resulted in additional property tax and school finance reform legislation.
Michigan's school finance reform shifts the responsibility of funding
schools away from the local district and their real property tax bases to
the state and an earmarked portion of sales taxes. Moreover, the state
government is also subject to a revenue raising cap which is tied to the

annual state personal income growth. The margin between existing revenue
and the constitutional cap is greatly narrowed now that the state absorbs
the costs of funding the local schools. Over the long term the cap may
reduce the state's flexibility to deal with adverse financial developments.
Concerning Michigan's fiscal policy, the state has proven that it can
maintain a balanced budget, low debt levels and high reserves. While the
state's Budget Stabilization Fund ("Rainy Day Fund") was drawn down
substantially during the fiscal years 1990-1992 in order to meet budget
needs of the state during fiscal stress, spending restraint and an improved
economy enabled the state to begin to restore balances in fiscal 1993. By
the end of fiscal 1994, the balances in the Rainy Day Fund were $780
million and was $1.03 billion at the end of January 1996. This makes the
Rainy Day Fund one of the highest in the nation.
Because of the increased revenues in fiscal 1995, the governor proposed a
tax cut which would reduce revenues by $186 million. The governor also is
proposing that the State increase the deposit to the Rainy Day Fund by $110
million, ending the year with a nominal $2 million surplus in the General
Fund. The tax cuts would reduce personal income taxes by increasing the
personal exemption from $2,100 to $2,400 and would reduce the Single
Business Tax by excluding FICA, workers compensation, and unemployment
compensation from the tax liability base. Reductions are also made to the
intangibles tax. The full annual cost of the tax cuts will be $246 million
in fiscal 1996.
While Michigan's economy is in good standing now because of conservative
budgeting practices and the improved economy, the enduring effectiveness of
the state's financial management will continue to be tested by economic
cycles.

INDEPENDENCE ONE MUTUAL FUNDS MANAGEMENT

OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, birthdates,
principal occupations, and present positions, including any affiliation
with Michigan National Bank, Michigan National Corporation, Federated
Investors, Federated Securities Corp., Federated Administrative Services,
and Federated Services Company.

Robert E. Baker
4327 Stoneleigh Road
Bloomfield Hills, MI
Birthdate: May 6, 1930
Trustee
Retired; formerly, Vice Chairman, Chrysler Financial Corporation.

Harold Berry
100 Galleria Offcentre,
Suite 219
Southfield, MI
Birthdate: September 17, 1925
Trustee
Managing Partner, Berry Enterprises; Chairman, Independent Sprinkler
Companies, Inc.; Chairman, Berry, Ziegelman & Company; formerly, Chairman,
Executive Committee, Federal Enterprises, Inc.

Clarence G. Frame+
W-875 First Bank Building
332 Minnesota Street
St. Paul, MN
Birthdate: July 26, 1918
Trustee
Director, Tosco Corporation, Milwaukee Land Company, and Voyageur Funds
Group; formerly, Vice Chairman, First Bank System, Inc., and President, The
First National Bank of St. Paul, a subsidiary of First Bank System, Inc.

Harry J. Nederlander+
231 S. Woodward, Suite 219
Birmingham, MI
Birthdate: September 5, 1917
Trustee
Chairman, Nederlander Enterprises.

Thomas S. Wilson
Two Championship Drive
Auburn Hills, MI
Birthdate: October 9, 1949
Trustee
President and Executive Administrator of the Detroit Pistons; President and
CEO, Palace Sports and Entertainment.

Edward C. Gonzales
Federated Investors Tower

Pittsburgh, PA
Birthdate: October 22, 1930
President and Treasurer
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company; Trustee or Director of
some of the Funds distributed by Federated Securities Corp.; President,
Executive Vice President and Treasurer of some of the Funds distributed by
Federated Securities Corp.

Jeffrey W. Sterling
Federated Investors Tower
Pittsburgh, PA
Birthdate: February 5, 1947
Vice President and Assistant Treasurer
Vice President and Assistant Treasurer of various Funds distributed by
Federated Securities Corp.

Jay S. Neuman
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 22, 1950
Secretary
Corporate Counsel, Federated Investors.

+ Members of the Trust's Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board of
Trustees between meetings of the Board.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the outstanding shares of the
Fund. The following list indicates the beneficial ownership of shareholders
who are the beneficial owners of more than 5% of the outstanding shares of
the following Funds as of August 2, 1996: Pierson & Co., nominee for
Michigan National Bank, acting in various capacities for numerous accounts
was the shareholder of record of 7,134,055 shares (97.71%) of Government
Securities Fund; 5,885,969 shares (95.18%) of Fixed Income Fund; and
2,318,773 shares (98.29%) of Michigan Municipal Bond Fund
TRUSTEES' COMPENSATION

AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM
THE TRUST THE TRUST*

Robert E. Baker $ 8,500
Trustee
Harold Berry $ 8,500
Trustee
Clarence G. Frame$ 8,500
Trustee
Harry J. Nederlander $ 5,950

Trustee
Thomas S. Wilson $ 8,500
Trustee

*Information is furnished for the fiscal year ended April 30, 1996. The
Trust is the only Investment Company in the Fund Complex. The aggregate
compensation is provided for the Trust which is comprised of seven
portfolios.

TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they are
not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their office.

MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust. To
protect shareholders, the Trust has filed legal documents with
Massachusetts that expressly disclaim the liability of shareholders for
such acts or obligations of the Trust. These documents require notice of
this disclaimer to be given in each agreement, obligation, or instrument
which the Trust or its Trustees enter into or sign.

In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to

use the property of the Fund to protect or compensate the shareholder. On
request, the Trust will defend any claim made and pay any judgment against
a shareholder for any act or obligation of the Trust. Therefore, financial
loss resulting from liability as a shareholder will occur only if the Trust
cannot meet its obligations to indemnify shareholders and pay judgments
against them from its assets.

INVESTMENT ADVISORY SERVICES

ADVISER AND SUB-ADVISER TO THE FUNDS

The Funds' investment adviser is Michigan National Bank (the "Adviser").
Government Securities Fund's sub-adviser is Independence One Capital
Management Corporation (the "Sub-Adviser").

The Adviser and Sub-Adviser shall not be liable to the Trust, the Funds, or
any shareholder 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 Michigan National Bank to
restrict the flow of non-public information, Fund investments are typically
made without any knowledge of Michigan National Bank's or its affiliates'
lending relationships with an issuer.
ADVISORY AND SUB-ADVISORY FEES

For its advisory services, Michigan National Bank receives an annual
investment advisory fee as described in the prospectus. For the fiscal

years ended April 30, 1996, 1995 and 1994, the Adviser earned fees from
Government Securities Fund of $481,848, $458,170 and $595,181, of which
$394,602, $458,170 and $595,181, respectively, was voluntarily waived
because of undertakings to limit Government Securities Fund's expenses.
For the period from October 23, 1995 (date of initial public investment) to
April 30, 1996, the Adviser earned fees from Fixed Income Fund of $212,343,
of which $141,562 was voluntarily waived because of undertakings to limit
Fixed Income Fund's expenses. For the period from November 20, 1995 (date
of initial public investment) to April 30, 1996, the Adviser earned fees
from Michigan Municipal Bond Fund of $86,756, of which $57,837 was
voluntarily waived because of undertakings to limit Michigan Municipal Bond
Fund's expenses.
The Sub-Adviser will perform its duties at no cost to the Adviser or
Government Securities Fund.

STATE EXPENSE LIMITATIONS
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If a Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2 1/2% per year of the first $30 million of average net assets,
2% per year of the next $70 million of average net assets, and 1 1/2%
per year of the remaining average net assets, the Adviser will
reimburse the Trust for its expenses over the limitation.
If a Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the Adviser

will be limited, in any single fiscal year, by the amount of the
investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the Adviser 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 Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to guidelines established by the
Trustees. The Adviser may select brokers and dealers who offer brokerage
and research services. These services may be furnished directly to the
Funds or to the Adviser 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. Research services provided by brokers and dealers may be
used by the Adviser or its affiliates in advising the Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have paid,
it would tend to reduce their expenses. The Adviser and its 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.

Although investment decisions for the Funds are made independently from
those of the other accounts managed by the Adviser, investments of the type
the Funds may make may also be made by those other accounts. When the
Funds and one or more other accounts managed by the Adviser 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 Adviser 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
OTHER SERVICES

TRUST ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Funds for the fees
set forth in the prospectus. For the fiscal years ended April 30, 1996,
1995 and 1994, Government Securities Fund incurred administrative services
costs of $81,663, $84,660 and $106,948, respectively, of which $57,395, $0
and $0 were voluntarily waived because of undertakings to limit Fund
expenses. For the period from October 23, 1995 (date of initial public
investment) to April 30, 1996, Fixed Income Fund incurred administrative
services costs of $31,636, of which $30,644 was voluntarily waived because
of undertakings to limit Fund expenses. For the period from November 20,
1995 (date of initial public investment) to April 30, 1996, Michigan
Municipal Bond Fund incurred administrative costs of $12,868, of which
$12,468 was voluntarily waived because of undertakings to limit Fund
expenses.

CUSTODIAN
Michigan National Bank, Farmington Hills, Michigan, is custodian for the
securities and cash of the Funds. For the services to be provided to the
Trust pursuant to the Custodian Agreement, the Trust pays the custodian an
annual fee based upon the average daily net assets of each Fund and which
is payable monthly. The custodian will also charge transaction fees and
out-of-pocket expenses.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, Boston, Massachusetts, through its subsidiary
Federated Shareholder Services Company, is transfer agent for the shares of
the Funds and dividend disbursing agent for the Funds.
INDEPENDENT AUDITORS
The independent auditors for the Funds are KPMG Peat Marwick LLP,
Pittsburgh, Pennsylvania.

PURCHASING SHARES

Shares are sold at their net asset value without a sales charge on days
when both the New York Stock Exchange and the Federal Reserve Wire System
are open for business. The procedures for purchasing shares of the Funds
are explained in the prospectus under "Investing in the Funds."
CONVERSION TO FEDERAL FUNDS
It is each Fund's policy to be as fully invested as possible so that
maximum interest may be earned. To this end, all payments from shareholders
must be in federal funds or be converted into federal funds before
shareholders begin to earn dividends. Michigan National Bank acts as the
shareholder's agent in depositing checks and converting them to federal
funds.

DETERMINING NET ASSET VALUE

Net asset value generally changes each day. The days on which net asset
value is calculated by the Funds are described in the prospectus.

DETERMINING MARKET VALUE OF SECURITIES

Market values of the Funds' portfolio securities are determined as follows:
o for bonds and other fixed income securities, as determined by an
independent pricing service;
o for short-term obligations, according to the mean between bid and
asked prices as furnished by an independent pricing service, or for
short-term obligations with remaining maturities of 60 days or less at
the time of purchase, at amortized cost;
o for equity securities, according to the last sale price on a national
securities exchange, if applicable;
o in the absence of recorded sales for listed equity securities,
according to the mean between the last closing bid and asked prices;
o for unlisted equity securities, latest bid prices; or
o for all other securities, at fair value as determined in good faith by
the 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 and options at their market values
established by the exchanges at the close of options trading on such

exchanges unless the Trustees determine in good faith that another method
of valuing option positions is necessary.
EXCHANGE PRIVILEGE

Shareholders using the exchange privilege must exchange shares having a net
asset value of at least $1,000. Before the exchange, the shareholder must
receive a prospectus of the fund for which the exchange is being made.
This privilege is available to shareholders resident in any state in which
the fund shares being acquired may be sold. Upon receipt of proper
instructions and required supporting documents, shares submitted for
exchange are redeemed and the proceeds invested in shares of the other
fund.
Instructions for exchanges may be given in writing or by telephone.
Exchange procedures are explained in the prospectus under "Exchange
Privilege."
REDEEMING SHARES

The Funds redeem shares at the next computed net asset value after
Federated Shareholder Services Company receives the redemption request.
Redemption procedures are explained in the prospectus under "Redeeming
Shares."
REDEMPTION IN KIND
Although the Funds intend to redeem shares in cash, they reserve the right
under certain circumstances to pay the redemption price in whole or in part
by a distribution of securities from the Funds' portfolios. To satisfy
registration requirements in a particular state, redemption in kind will be
made (for any shareholder requesting redemption) in readily marketable
securities to the extent that such securities are available. If this
state's policy changes, the Funds reserve the right to redeem in kind by
delivering those securities it deems appropriate.

Redemption in kind will be made in conformity with applicable Securities
and Exchange Commission rules, taking such securities at the same value
employed in determining net asset value and selecting the securities in a
manner the Trustees determine to be fair and equitable.

The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which each Fund 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.

TAX STATUS

THE FUNDS' TAX STATUS
The Funds intend to pay no federal income tax because they expect to meet
the requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, a Fund must,
among other requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
o derive less than 30% of its gross income from the sale of securities
held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.

Federal income tax law requires the holder of a zero coupon convertible
security to recognize income with respect to the security prior to the
receipt of cash payments. To maintain its qualification as a regulated

investment company and avoid liability of federal income taxes, Fixed
Income Fund will be required to distribute income accrued with respect to
zero coupon convertible securities which it owns, and may have to sell
portfolio securities (perhaps at disadvantageous times) in order to
generate cash to satisfy these distribution requirements.

SHAREHOLDER'S TAX STATUS
Shareholders are subject to federal income tax on dividends and capital
gains received as cash or additional shares. No portion of any income
dividend paid by the Fund is eligible for the dividends received deductions
available to corporations. These dividends and any short-term capital
gains, are taxable as ordinary income.
CAPITAL GAINS
Capital gains or losses may be realized by Michigan Municipal Bond 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:
o the availability of higher relative yields;
o differentials in market values;
o new investment opportunities;
o changes in creditworthiness of an issuer; or
o an attempt to preserve gains or limit losses.
Distribution 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 the shares. Any loss by a shareholder on Fund shares
held for less than six months and sold after a capital gains distribution
will be treated as a long-term capital loss to the extent of the capital
gains distribution.

TOTAL RETURN

The average annual total return for shares of the Funds is the average
compounded rate of return for a given period that would equate a $1,000
initial investment to the ending redeemable value of that investment. The
ending redeemable value is computed by multiplying the number of shares
owned at the end of the period by the offering price per share at the end
of the period. The number of shares owned at the end of the period is based
on the number of shares purchased at the beginning of the period with
$1,000, less any applicable sales charge, adjusted over the period by any
additional shares, assuming the reinvestment of all dividends and
distributions.

Government Securities Fund's average annual total return for the fiscal
year ended April 30, 1996 was 7.97%.For the period from January 11, 1993
(date of initial public investment) to April 30, 1996 the Fund's average
annual total return was 5.88%.
Fixed Income Fund's average annual total return for the fiscal year ended
April 30, 1996 was 6.34%. The Fund's cumulative total return for the period
from January 3, 1995 (date of commencement of operations of the common
trust fund) to April 30, 1996 was 11.96%. The average annual total return
for the same period was 8.87%. The quoted performance data includes the
performance of the common trust fund for periods before the Fund's
registration statement became effective, as adjusted to reflect the Fund's
anticipated expenses as set forth in the "Summary of Fund Expenses" section
of the prospectus. The common trust fund was not registered under the
Investment Company Act of 1940 ("1940 Act") and therefore was not subject
to certain investment restrictions that are imposed by the 1940 Act. If

the common trust fund had been registered under the 1940 Act, the
performance may have been adversely affected.
Cumulative total return reflects a Fund's total performance over a specific
period. The cumulative total return for Michigan Municipal Bond Fund for
the period from November 20, 1995 (date of initial public investment)
through April 30, 1996 was 1.21%. This total return is representative of
only 5 months of activity since the date of initial public investment.
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 reinvestment of dividends over a specified
period of time.

YIELD

The thirty-day yields for the period ended April 30, 1996 for Government
Securities Fund, Fixed Income Fund and Michigan Municipal Bond Fund were
5.98%, 5.58%, and 3.88%, respectively.

The yields for the Funds are determined by dividing the net investment
income per share (as defined by the Securities and Exchange Commission)
earned by the Funds over a thirty-day period by the maximum offering price
per share of the Funds 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 twelve-month period and is reinvested every six months.
The yield does not necessarily reflect income actually earned by the Funds
because of certain adjustments required by the Securities and Exchange

Commission 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 investments in the Funds, performance will be
reduced for those shareholders paying those fees.
TAX-EQUIVALENT YIELD

The tax-equivalent yield of Michigan Municipal Bond 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
specified tax rate and assuming that income is 100% tax-exempt.

Michigan Municipal Bond Fund's tax-equivalent yield for the thirty-day
period ended April 30, 1996, was 5.74%, assuming an effective tax rate of
32.40%.

TAX-EQUIVALENCY TABLE
Michigan Municipal Bond Fund may use a tax-equivalency table in advertising
and sales literature. The interest earned by the municipal bonds in the
Fund's portfolio generally remains free from federal regular income tax,*
and is free from the state income tax imposed by the state of Michigan. As
the table indicates, a "tax-exempt" investment is an attractive choice for
investors, particularly in times of narrow spreads between tax-free and
taxable yields.
TAXABLE YIELD EQUIVALENT FOR 1996

STATE OF MICHIGAN

COMBINED FEDERAL AND STATE INCOME TAX BRACKET:

19.40% 32.40% 35.40% 40.40% 44.00%

JOINT $1- $40,101- $96,901- $147,701- OVER
RETURN 40,100 96,900 147,700 263,750 $263,750

SINGLE $1- $24,001- $58,151- $121,301- OVER
RETURN 24,000 58,150 121,300 263,750 $263,750

TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT

1.50% 1.86% 2.22% 2.32% 2.52% 2.68%
2.00% 2.48% 2.96% 3.10% 3.36% 3.57%
2.50% 3.10% 3.70% 3.87% 4.19% 4.46%
3.00% 3.72% 4.44% 4.64% 5.03% 5.36%
3.50% 4.34% 5.18% 5.42% 5.87% 6.25%
4.00% 4.96% 5.92% 6.19% 6.71% 7.14%
4.50% 5.58% 6.66% 6.97% 7.55% 8.04%
5.00% 6.20% 7.40% 7.74% 8.39% 8.93%
5.50% 6.82% 8.14% 8.51% 9.23% 9.82%
6.00% 7.44% 8.88% 9.29% 10.07% 10.71%

Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent. Furthermore, additional
state and local taxes paid on comparable taxable investments were not
used to increase federal deductions.

The chart above is for illustrative purposes only. It is not an indicator
of past or future performance of the Michigan Municipal Bond Fund.
* Some portion of Michigan Municipal Bond Fund's income may be subject to
the federal alternative minimum tax and state and local taxes.
Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent. Furthermore, additional state and
local taxes paid on comparable taxable investments were not used to
increase federal deductions.

PERFORMANCE COMPARISONS

The Funds' performance depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio securities;
o changes in the Funds' expenses; and
o various other factors.
The Funds' performance fluctuates on a daily basis largely because net
earnings and maximum offering price per share fluctuate daily. Both net
earnings and offering price per share are factors in the computation of
yield and total return.
Investors may use financial publications and/or indices to obtain a more
complete view of the Funds' 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:

<.R>
LIPPER ANALYTICAL SERVICES, INC. (ALL FUNDS) 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 "general municipal bond
funds" category in advertising and sales literature.
MORNINGSTAR, INC. (ALL FUNDS), 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.
MERRILL LYNCH 1-10 YEAR TREASURY INDEX (GOVERNMENT SECURITIES FUND)
is an unmanaged index tracking intermediate term U.S. Treasury
securities with maturities between 1 and 9.99 years. The index is
produced by Merrill, Lynch, Pierce, Fenner & Smith, Inc.
o LEHMAN BROTHERS GOVERNMENT/CORPORATE (TOTAL) INDEX (FIXED INCOME FUND)
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 Lehman Brothers, the index calculates total returns for
one-month, three-month, twelve-month, and ten-year periods and year-
to-date.
o LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX (FIXED
INCOME FUND) is 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.
LEHMAN BROTHERS SEVEN YEAR STATE GENERAL OBLIGATION BOND INDEX
(MICHIGAN MUNICIPAL BOND INDEX) is an index of general obligation
bonds rated A or better with 6-8 years to maturity.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Funds' returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Funds can
compare their performance, or performance for the types of securities in
which they invest, to a variety of other investments, such as bank savings
accounts, certificates of deposit, and Treasury bills.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Funds may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on
these developments by Fund portfolio managers and their views and analysis
on how such developments could affect the Funds. In addition, advertising
and sales literature may quote statistics and give general information
about the mutual fund industry, including the growth of the industry, from
sources such as the Investment Company Institute ("ICI"). For example,
according to the ICI, twenty-seven percent of American households are
pursuing their financial goals through mutual funds. These investors, as
well as businesses and institutions, have entrusted over $3 trillion to the
more than 5,500 funds available.

DURATION
Duration is a commonly used measure of the potential volatility in the
price of a bond, or other fixed income security, or in a portfolio of fixed
income securities, prior to maturity. Volatility is the magnitude of the
change in the price of a bond relative to a given change in the market rate
of interest. A bond's price volatility depends on three primary variables:
the bond's coupon rate; maturity date; and the level of market yields of
similar fixed income securities. Generally, bonds with lower coupons or
longer maturities will be more volatile than bonds with higher coupons or
shorter maturities. Duration combines these variables into a single
measure.
Duration is calculated by dividing the sum of the time-weighted values of
the cash flows or a bond or bonds, including interest and principal
payments, by the sum of the present values of the cash flows. When the
Government Securities Fund and Fixed Income Fund invest in mortgage pass-
through securities, the duration will be calculated in a manner which
requires assumptions to be made regarding future principal prepayments. A
more complete description of this calculation is available upon request
from the Funds.

FINANCIAL STATEMENTS

The Financial Statements for the fiscal year ended April 30, 1996 are
incorporated herein by reference to the Annual Reports of the Funds dated
April 30, 1996 (File Nos. 33-26516 and 811-5752). A copy of the Funds'
Annual Reports may be obtained without charge by contacting the Trust.

APPENDIX

STANDARD AND POOR'S RATINGS GROUP MUNICIPAL BOND RATINGS
AAA--Debt rated "AAA" has the highest rating assigned by Standard & Poor's
Ratings Group ("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.
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.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATINGS 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.
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 corporate or municipal 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 RATINGS
AAA--Bonds considered to be investment grade and of very high 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-1+.
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 RATINGS
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 (+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE SHORT-TERM LOAN RATINGS
MIG1/VMIG1--This designation denotes best quality. There is a present
strong protection by established cash flows, superior liquidity support or
demonstrated broadbased access to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT RATINGS
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-1+.

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-1+ and F-1 categories.
STANDARD AND POOR'S RATINGS GROUP COMMERCIAL PAPER RATINGS DEFINITIONS
A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus (+) sign designation.
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 COMMERCIAL PAPER RATINGS
P-1--Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
PRIME-1 repayment capacity will normally be evidenced by the following
characteristics: Leading market positions in well established industries;
high rates of return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset protection; broad
margins in earning coverage of fixed financial charges and high internal
cash generation; and well established access to a range of financial
markets and assured sources of alternate liquidity.
P-2--Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory 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, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:

(a) Financial Statements: (1-4,6,7)Incorporated by reference
into the Annual Report of the Trust dated April
30, 1996 (File Nos. 33-26516 and 811-5752)
(5) Filed in Part A.
(b) Exhibits:
(1) Conformed Copy of Declaration of Trust of the
Registrant; (1.)
(i)Conformed Copy of Amendment No. 1 to the
Declaration of Trust dated January 9, 1989; (2.)
(ii)Conformed Copy of Amendment No. 2 to the
Declaration of Trust dated January 9, 1989; (2.)
(iii)Conformed Copy of Amendment No. 3 to the
Declaration of Trust dated January 9, 1989; (4.)
(iv)Conformed Copy of Amendment No. 4 to the
Declaration of Trust. dated April 8, 1991; (6.)
(v)Conformed Copy of Amendment No. 5 to the
Declaration of Trust. dated September 26, 1991;
(6.)

(vi)Conformed Copy of Amendment No. 6 to the
Declaration of Trust. dated December 9, 1991;
(10.)
(vii)Conformed Copy of Amendment No. 8 to the
Declaration of Trust, dated December 6, 1994;
(10.)
(viii)..........Conformed Copy of Certification dated
December 6, 1994; (10.)
(ix) Conformed Copy of Amendment No. 9 to the
Declaration of Trust dated May 4, 1995; (12.)
+All exhibits have been filed electronically.

1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed on January 13, 1989. (File
Nos. 33-26516 and 811-5752)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on May 5, 1989. (File Nos. 33-
26516 and 811-5752)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed on June 27, 1990. (File Nos. 33-
26516 and 811-5752)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed June 24, 1992. (File Nos. 33-26516
and 811-5752)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed February 8, 1995. (File Nos. 33-
26516 and 811-5752)

12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1995. (File Nos. 33-
26516 and 811-5752)

(2) Copy of By-Laws of the Registrant; (1.)
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of
Beneficial Interest of Independence One U.S.
Government Securities Fund; (7.)
(ii) Copy of Specimen Certificate for Shares of
Beneficial Interest of Independence One Equity
Plus Fund, Independence One Fixed Income Fund,
and Independence One Michigan Municipal Bond
Fund; (14.)
(iii)Copy of Specimen Certificate for Shares of
Beneficial Interest of Independence One U.S.
Treasury Money Market Fund; (2.)
(iv)Copy of Specimen Certificates for Shares of
Beneficial Interest of Independence One Michigan
Municipal Cash Fund and Independence One Prime
Money Market Fund-Class A Shares and Class B
Shares; (16.)
(5) Conformed copy of Investment Advisory Contract of the
Registrant as amended; (8.)
(i)Conformed copy of Investment Sub-Advisory
Contract for Independence One U.S. Government
Securities Fund; (8.)

(ii)Conformed copy of Exhibit G to the Present
Investment Advisory Contract of the Registrant to
add Independence One Fixed Income Fund to the
Present Investment Advisory Contract of the
Registrant; (14.)
(iii)Conformed copy of Exhibit H to the Present
Investment Advisory Contract of the Registrant to
add Independence One Michigan Municipal Bond Fund
to the Present Investment Advisory Contract of
the Registrant; (14.)
(iv)Conformed copy of Exhibit I to the Present
Investment Advisory Contract of the Registrant to
add Independence One Equity Plus Fund to the
Present Investment Advisory Contract of the
Registrant; (14.)
(v)Conformed copy of Investment Sub-Advisory
Agreement for Independence One Equity Plus Fund;
(14.)
+All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed on January 13, 1989. (File
Nos. 33-26516 and 811-5752)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 2, 1992. (File Nos. 33-
26516 and 811-5752)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed June 24, 1993. (File Nos. 33-26516
and 811-5752)

14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed on August 29, 1995. (File Nos.
33-26516 and 811-5752)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1996. (File Nos. 33-
26516 and 811-5752)

(6) Conformed Copy of Distributor's Contract of Registrant
through and including Exhibit C; (16.)
(i)Conformed Copy of Exhibit D to the Distributor's
Contract; (10.)
(ii)Conformed Copy of Exhibit E to the Distributor's
Contract; (10.)
(iii)Conformed copy of Exhibit F to the Distributor's
Contract; (13.)
(iv)Conformed copy of Exhibit G to the Distributor's
Contract; (13.)
(v)Conformed copy of Exhibit H to the Distributor's
Contract; (13.)
(vi)Conformed copy of Exhibit I to the Distributor's
Contract; (13.)
(7) Not applicable;
(8) (i)Conformed Copy of Custodian Agreement of the
Registrant through and including Exhibit A; (16.)
(ii)Conformed Copy of the Agency Agreement of the
Registrant; (3.)
(iii)Conformed Copy of the Administrative Services
Agreement of the Registrant; (16.)

(iv)Conformed Copy of Amendment No. 1 to Exhibit A of
Agency Agreement of the Registrant; (7.)
(9) (i)Conformed Copy of Agreement for Fund Accounting,
Shareholder Recordingkeeping, and Custody
Services Procurement;(10.)
(ii)Conformed copy of Shareholder Services Plan;
(13.)
(iii)Conformed Copy of Exhibit 1 to the Shareholder
Services Plan of the Registrant; (12.)
(iv)Conformed copy of of Shareholder Services
Agreement (Amended and Restated 9/19/95); (15.)
(v)Conformed Copy of Exhibit 1 to the Shareholder
Services Agreement of the Registrant; (12.)
(10) Conformed Copy of Opinion and Consent of Counsel as to
legality of shares being registered; (16.)
+All exhibits have been filed electronically.
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed on December 12, 1989. (File Nos.
33-26516 and 811-5752)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 2, 1992. (File Nos. 33-
26516 and 811-5752)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed February 8, 1995. (File Nos. 33-
26516 and 811-5752)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1995. (File Nos. 33-
26516 and 811-5752)

13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed on July 25, 1995. (File Nos. 33-
26516 and 811-5752)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed on December 5, 1995. (File Nos.
33-26516 and 811-5752)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1996. (File Nos. 33-
26516 and 811-5752)

(11) (i)Conformed Copy of Independent Auditors Consent
for Independence One Prime Money Market Fund,
Independence One U.S. Treasury Money Market Fund,
Independence One Michigan Municipal Cash Fund and
Independence One Equity Plus Fund; (16.)
(ii)Conformed Copy of Independent Auditors Consent
for Independence One U.S. Government Securities
Fund, Independence One Fixed Income Fund, and
Independence One Michigan Municipal Bond Fund;+
(12) Not applicable;
(13) Conformed Copy of Initial Capital Understanding; (16.)
(14) Not applicable;
(15) (i)Conformed Copy of Distribution Plan through and
including Exhibit A; (16.)
(ii)Copy of Sales Agreement with Federated Securities
Corp. and Administrative Agreement - Appendix B;
(2.)

(iii)Conformed copy of Exhibit B of Distribution Plan;
(8.)
(iv)Copy of Schedule A of Sales Agreement with
Federated Securities Corp.; (7.)
(v)Copy of Fee Schedule for Rule 12b-1 Agreement
with Federated Securities Corp.; (7.)
(16) (I)Copy of Schedule for Computation of Performance
Data (Return) for Independence One Equity
Plus Fund;(15.)
(ii) Copy of Schedule for Computation of
Performance Data (SEC Yield) for Independence One
Equity Plus Fund; (15.)
(iii) Copy of Schedule for Computation of
Performance Data (Return) for Independence One
Fixed Income Fund; (15.)
(iv) Copy of Schedule for Computation of
Performance Data (SEC Yield) for Independence One
Fixed Income Fund; (15.)
(v) Copy of Schedule for Computation of
Performance Data (Return) for Independence One
Michigan Municpal Bond Fund; (16.)
+All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on May 5, 1989. (File Nos. 33-
26516 and 811-5752)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed on December 12, 1989. (File Nos.
33-26516 and 811-5752)

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 2, 1992. (File Nos. 33-
26516 and 811-5752)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed June 24, 1993. (File Nos. 33-26516
and 811-5752)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed on July 25, 1995. (File Nos. 33-
26516 and 811-5752)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed on December 5, 1995. (File Nos.
33-26516 and 811-5752)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1996. (File Nos. 33-
26516 and 811-5752)

(vi) Copy of Schedule for Computation of
Performance Data (SEC Yield) for Independence One
Michigan Municpal Bond Fund; (16.)
(vii) Copy of Schedule for Computation of
Performance Data for Independence One Money
Market Funds and Independence One U.S. Government
Securities Fund; (3.)
(17) Copy of Financial Data Schedules; +
(18) Conformed Copy of 18f-3 Plan; +
(19) Conformed Copy of Power of Attorney; (16.)

Item 25. Persons Controlled by or Under Common Control with Registrant:

None

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class Portfolio name as of August 2, 1996

Shares of Independence One Prime
beneficial Money Market Fund (Class A)2,578
interest

Independence One Prime
Money Market Fund (Class B) 16

Independence One U.S. 817
Treasury Money Market Fund

Independence One Michigan 834
Municipal Cash Fund

Independence One U.S. 12
Government Securities Fund

Independence One Michigan 9
Municipal Bond Fund

Independence One Equity 39
Plus Fund

Independence One Fixed 9
Income Fund

Item 27. Indemnification: (4.)

3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed on December 12, 1989. (File Nos.
33-26516 and 811-5752)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed on June 27, 1990. (File Nos. 33-
26516 and 811-5752)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed on July 25, 1995. (File Nos. 33-
26516 and 811-5752)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed on December 5, 1995. (File Nos.
33-26516 and 811-5752)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1996. (File Nos. 33-
26516 and 811-5752)

Item 28. Business and Other Connections of Investment Adviser:

Michigan National Bank, a national banking association (the
"Adviser"), is a wholly owned subsidiary of Michigan National
Corporation ("MNC"). Through its subsidiaries and affiliates,
MNC, Michigan's sixth largest bank holding company in terms of

total assets, as of March 31, 1996, offers a full range of
financial services to the public including commercial lending,
depository services, cash management, brokerage services, retail
banking, credit card services, mortgage banking, investment
advisory services and trust services. Independence One Capital
Management Corporation ("IOCM"), a nationally recognized
investment advisory subsidiary of MNC, provides investment
advisory services for trust and other managed assets. IOCM and
the Trust Division have investment discretion over $1.8 billion.
Michigan National Bank has managed mutual funds since May 1989.
The Trust Division has managed pools of commingled funds since
1964. For more information on the business of the Adviser, see
the Prospectus under the heading "Management of the Trust--
Investment Adviser."

The officers and directors of the Adviser and any other business,
profession, vocation or employment of a substantial nature in
which each such officer and director is or has been engaged
during the past two years is set forth below. Unless otherwise
noted, the position listed under Other Business, Profession,
Vocation or Employment is with Michigan National Bank. The
business address of each such director and officer is 27777
Inkster Road, Farmington Hills, Michigan, 48333-9065.

Other Substantial Business
Position with Profession,Vocation or
Name the Adviser Employment

Daniel T. Carroll Director Director, Michigan National
Corporation; Chairman and
President, The Carroll Group.

John S. Carton Director Director, Michigan National
Corporation; Chairman, President,
and CEO, Development Company.

Sidney E. Forbes Director Director, Michigan National
Corporation; Partner, Forbes/Cohen
Properties.
Other Substantial

Sue Ling Gin Director Director, Michigan National
Corporation; Chairman and Chief
Executive Officer, Flying Food
Fare, Inc.

Morton E. Harris Director Director, Michigan National
Corporation; Managing Partner,
Spectrum Associates.
Gerald B. Mitchell Director Director, Michigan National
Corporation; Retired Chairman and
Chief Executive Officer, Dana
Corporation.

Robert J. Mylod Director, Director, Chairman,
Chairman and and Chief Exective

Chief Executive Officer, Michigan National
Officer Corporation.
William F. Pickard Director Director, Michigan National
Corporation, Chairman and Chief
Executive Officer, Regal Plastics
Company.

Douglas E. Ebert Director, President and Chief
President and Operating Officer,
Chief Officer Michigan National Corporation

Stanton Kinnie Smith, Jr. Director Director, Michigan
National Corporation;
Vice Chairman, CMS Energy
Corporation.

Walter H. Teninga Director Director, Michigan National
Corporation; Retired President and
CEO, American Club Stores, Inc.

Stephen A. VanAndel Director Director, Michigan National
Corporation; Vice President and
Chairman, Amway Corporation.

Richard T. Walsh Director Director, Michigan National
Corporation; Consultant.

James A. Williams Director Director, Michigan National
Corporation; Chairman and President

Williams, Schaefer, Ruby &
Williams.

Lawrence L. Gladchun Senior Vice Senior Vice
President,General President,
Counsel and General Counsel and
Secretary Secretary, Michigan National
Corporation.

Richard C. Webb Senior Vice Senior Vice
President President,
Commercial Banking Michigan National
Corporation.

Joseph J. Whiteside Executive Vice President
and Chief Financial
Officer

William D. Ritsema Senior Vice Senior Vice
President, Credit President,
Administration Michigan National
Corporation.

Robert V. Panizzi First Vice First Vice President,
President and Michigan National
Controller Corporation.

Marc L. Belsky First Vice President First Vice President

Planning and Analysis Michigan National
Corporation.

Edward H. Sondker First Vice President President and CEO Independence
One Bank of California

National Australia Bank Limited ("NAB") is a transnational banking
organization headquartered at 500 Bourke Street, Melbourne, Australia. NAB
is a publicly owned company, whose shares are widely held and traded on the
Australian Stock Exchange Limited. On February 4, 1995, the Board of
Directors of MNC approved a definitive agreement for the acquisition (the
"Merger") of MNC by NAB. Shareholders of MNC approved the Merger on June
2, 1995. As a result, MNC and its subsidiaries, including the Adviser,
would become direct or indirect subsidiaries of NAB upon completion of the
Merger. The Merger was completed and Operations will continue to be
conducted under the Michigan National Corporation and Michigan National
Bank names.

On May 4, 1995, the Trust's Board of Trustees approved the present
investment advisory contract (the "Present Advisory Contract") between the
Trust, on behalf of Independence Once Equity Plus Fund, Independence One
Fixed Income Fund and Independence One Michigan Municipal Bond Fund
(collectively, the "Portfolios"), and Michigan National Bank, as a
subsidiary of MNC. Under the provisions of the Investment Company Act of
1940, completion of the Merger resulted in an assignment, and termination
of the Portfolios' Present Advisory Contract with the Adviser. Also on May
4, 1995, the Portfolios' Board of Trustees approved a new investment
advisory contract (the "New Advisory Contract") between the Trust, on
behalf of the Portfolios, and Michigan National Bank, as a subsidiary of

NAB. The New Advisory Contract became effective upon consummation of the
Merger.

The following information appeared in NAB's Annual Report for its
fiscal year ended September 30, 1995.

NAB, together with its subsidiaries (collectively, the "Group"), is
one of the four major Australian commercial banks ("trading banks" in
Australian terminology) which together account for approximately 67.7% of
commercial banking assets in Australia as of September 1995, according to
the Reserve Bank of Australia Bulletin. The Group undertakes a range of
banking, financial and related activities in Australia and elsewhere in the
world, including commercial banking, savings banking, finance and life
insurance and merchant and investment banking. As of September 30, 1995,
Group assets totalled
A$147.1 billion, of which approximately 58.0% was domiciled in Australia,
and Group deposits and borrowings totalled A$90.8 billion, of which
approximately 50.4% was domiciled in Australia+.

NAB was established as "The National Bank of Australasia" in 1858 in
Victoria, Australia. Through internal expansion and the acquisition of
other banks, NAB developed into a national commerical bank. In its present
form, NAB is the product of the merger in 1981 of The National Bank of
Australasia Limited and Commerical Banking Company of Sydney Limited, the
latter Bank being established in 1834 in New South Wales, Australia.

At September 30, 1995 the Group had 52,567 full-time and part-time
employees worldwide.

Banking, the Group's principal business activity, is conducted in
Australia by NAB and internationally by NAB and certain subsidiaries. As
of September 30, 1995, NAB was the second largest commercial bank in
Australia (according to the Reserve Bank of Australia Bulletin) based on
domestic assets of $85 billion. The Group is the largest Australian
banking group based on its global assets of A$147.1 billion+.

Consistent with its philosophy of providing customers with a
comprehensive range of financial products and services, in 1985 the Group
established a life insurance and funds management entity, National
Australia Financial Management Limited. This entity and its subsidiaries
provide the Australian market with a range of personal financial planning
services, personal life and disability insurance, personal superannuation
and managed investments, corporate superannuation, group life insurance and
various investment management services. At September 30, 1995, funds under
managment amounted to A$3.7 billion. Two of the Group's banking
subsidiaries in the United Kindom, Yorkshire Bank and Northern Bank, offer
certain insurance and investment products through subsidiaries, mainly in
the areas of funds managment and other investment related products.

At November 11, 1995, the directors* and principal executive officer
of NAB were as follows:

+These figures reflect Australian dollars.
*The Directors of NAB are classified as either Executive or Non-Executive,
with the former being those Directors engaged in the full-time employment
of NAB. Mr. Donald Argus is the only Executive Director.

Name and Position Position/Directorship Principal
with NAB Held Since Occupation(s)

William Robert 1992/1979 Barrister and Chairman and
Mitchel Irvine Director/Solicitor; Director,
Bank of New Zealand; Chairman,
National Australia Financial
Managment Limited and National
Australia Group (UK) Limited;
former Partner, Hedderwick
Fookes & Alston, Solicitors.

Brian Thorley Loton 1992/1988 Chairman, The Vice-Chariman Broken Hill
and Director Proprietary Company
Limited; Director, Amcor Limited and

Australian Foundation Investment Company
Limited; Alternate Director, National
Australia Group (UK) Limited; former
Managing Director, The Broken Hill
Proprietary Company Limited.

David Kennedy Macfarlane 1992/1985 Chairman NAB's Principal Board
Audit Committee; Chairman of National
Australia Asset Management Limited and
Alternate Director, National Australia
Group (UK)) Limited; 33 years'
experience with James Hardie Industries
Limited, 12 years of which as Managing
Director.

Donald Robert Argus 1990/1989 National Bank of New Zealand, Managing
Director and Clydesdale Bank PLC National Chief
Executive Officer Australia Financial Management
Limited, National Australia Group (UK)
Limited, National Irish Bank , Limited Northern
Bank Limited and Yorkshire Bank PLC.

David Charles 1992 Director, Woodside Petroleum Keith Allen
Limited and a member of the
Principal Board Audit
Committee.

Peter John Waraker 1985 Chairman, Director Email
Cottrell Limited.

Dr. Christopher Michael 1992 Non-Executive Director
Deeley North Limited; former Managing Director
and Chairman Director and Chief Executive,
ICI Australia Limited.

David Alexander Tange 1981 Alternate Director, Bank of
Dickens New Zealand; former Partner,
Director Court & Co. Chartered
Accountants; former Director,
The Commercial Banking Company of Sydney
Limited.

The Lord Nickson 1991 Chairman, Director, Clydesdale Bank PLC;
Director, National Australia Group (UK)
Limited.

Mark Richard Rayner 1985 Director and
Director Group Executive, CRA Limited; Deputy
Chairman and former Managing Director,
Comalco Limited, Chairman, Pasminco
Limited; member of NAB's Principal Board
Audit Committee.

Joseph Charles Trethowan 1984 Vice Chairman
Director of Directors and Chairman, Audit
Committee of National Australia
Financial Managment Limited; member of
NAB's Principal Board Audit Committee;

former Chairman and General Manager,
State Electricity Commission of
Victoria.

Andrew Trunbull 1992 Non-Executive
Director Chairman and former Managing Director
and Chief Executive Officer, Burns
Philip and Company Limited.

Sir Bruce Dunstan Watson 1992 Former
Director Chairman, Director, and Chief Executive
Officer, MIM Holdings Limited.

CM Walter 1995 Solicitor, former Partner, Clayton Utz;
Director of Ampolex Limited, SGIO
Insurance Limited and Melbourne Business
School Limited; Commissioner of City of
Melbourne.

The address of the Directors and principal executive officer of NAB is c/o
500 Bourke Street, Melbourne, Australia.

Item 29. Principal Underwriters:

(a) 111 Corcoran Funds; Annuity Management Series; Arrow Funds;
Automated Government Money Trust; BayFunds; Blanchard Funds;
Blanchard Precious Metals Fund, Inc.; Cash Trust Series II; Cash

Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S.
Government Fund, Inc.; Federated American Leaders Fund, Inc.;
Federated ARMs Fund; Federated Equity Funds; Federated Equity
Income Fund, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income
Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index
Trust; Federated Institutional Trust; Federated Insurance Series;
Federated Master Trust; Federated Municipal Opportunities Fund,
Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Trust; Federated Short-Term Municipal Trust; Federated
Short-Term U.S. Government Trust; Federated Stock and Bond Fund,
Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated
U.S. Government Securities Fund: 2-5 Years; Federated U.S.
Government Securities Fund: 5-10 Years; Federated Utility Fund,
Inc.; First Priority Funds; Fixed Income Securities, Inc.;
Fortress Utility Fund, Inc.; High Yield Cash Trust; Independence
One Mutual Funds; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds;
Peachtree Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds;
Star Funds; Targeted Duration Trust; Tax-Free Instruments Trust;

The Biltmore Funds; The Biltmore Municipal Funds; The Monitor
Funds; The Planters Funds; The Starburst Funds; The Starburst
Funds II; The Virtus Funds; Tower Mutual Funds; Trust for
Financial Institutions; Trust for Government Cash Reserves; Trust
for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; Vision Group of Funds, Inc.; andWorld
Investment Series, Inc.

Federated Securities Corp. also acts as principal underwriter for
the following closed-end investment company: Liberty Term Trust,
Inc.- 1999.

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant

Richard B. Fisher Director, Chairman, Chief --
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive VicePresident and
Federated Investors Tower President, Federated, Treasurer
Pittsburgh, PA 15222-3779 Securities Corp.

John W. McGonigle Director, Federated --
Federated Investors Tower Securities Corp.
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --

Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --

Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Item 30. 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 31a-1
through 31a-3 promulgated thereunder are maintained at one of the
following locations:

Independence One Mutual Funds Federated Investors Tower
(Registrant) ............ Pittsburgh, PA 15222-3779

Federated Services Company P.O. Box 8600
("Transfer Agent, Dividend Boston, Massachusetts 02266-
Disbursing Agent and Portfolio 8600
Recordkeeper")...........

Federated Administrative Services Federated Investors Tower
(Administrator).......... Pittsburgh, PA 15222-3779

Michigan National Bank... 27777 Inkster Road
(Adviser)................ Mail Code 10-52
Farmington Hills, MI 48333

Michigan National Bank... 27777 Inkster Road
......................... Mail Code 10-30
(Custodian).............. Farmington Hills, MI 48333

Item 31. Management Services: Not applicable.

Item 32. Undertakings:

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

Registrant hereby undertakes to furnish each person to whom a
prospectus for any portfolio in the Trust is delivered with a
copy of the Registrant's latest annual report to shareholders,
upon request and without charge.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, INDEPENDENCE ONE MUTUAL
FUNDS, certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 26th day of August, 1996.

INDEPENDENCE ONE MUTUAL FUNDS

BY: /s/ Gail Cagney
Gail Cagney, Assistant Secretary
Attorney in Fact for Edward C. Gonzales
August 26, 1996

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:

NAME TITLE DATE

By: /s/ Gail Cagney
Gail Cagney Attorney In Fact August 26, 1996
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

Edward C. Gonzales* President and Treasurer
(Chief Executive Officer
and Principal Financial and
Accounting Officer)

Robert E. Baker.* Trustee

Harrold Berry* Trustee

Clarence G. Frame* Trustee

Harry J. Nederlander* Trustee

Thomas S. Wilson* Trustee

* By Power of Attorney

Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg. S-K

INDEPENDENT AUDITORS' CONSENT

The Board of Trustees
Independence One Mutual Funds:

With respect to this Post-Effective Amendment No. 19 to the Registration
Statement (33-26516) on Form N-1A of Independence One Mutual Funds, we
consent to the use of our reports dated June 14, 1996, on the financial
statements of the funds listed below, incorporated by reference and to the
references to our Firm under the headings "Financial Highlights" in Part A
of the Registration Statement and "Other Services-Independent Auditors" in
Part B of the Registration Statement.

Independence One U.S. Government Securities Fund;
Independence One Fixed Income Fund; and
Independence One Michigan Municipal Bond Fund

Pittsburgh, Pennsylvania KPMG Peat Marwick LLP
August 23, 1996

Exhibit 18 under Form n-1a
Exhibit 99 under Item 601/Reg. S-K

INDEPENDENCE ONE MUTUAL FUNDS

MULTIPLE CLASS PLAN

AMENDED AND RESTATED AS OF SEPTEMBER 19, 1995

This Multiple Class Plan ("Plan") is adopted by INDEPENDENCE ONE
MUTUAL FUNDS (the "Trust"), a Massachusetts business trust, with
respect to the classes of shares ("Classes") of the portfolios of
the Trust (the "Funds") set forth in exhibits hereto.

PURPOSE
1. This Plan is adopted pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "Rule"), in connection with the
issuance by the Trust of more than one class of shares of any or all
of the Funds ("Covered Classes") in reliance on the Rule .

2. SEPARATE ARRANGEMENTS/CLASS DIFFERENCES
The Funds set forth on Exhibit A offer two classes of shares which
are titled Class A Shares and Class B Shares. The only expenses
allocated to the shares as a class are expenses that may be incurred
with respect to Class A Shares under this Plan and the related
Shareholder Services Agreement adopted with respect to Class A
Shares.
Class B Shares are designed primarily for institutions,
corporations, and fiduciaries.
Class A Shares may be purchased by all types of investors, including
individuals. Checkwriting privileges, as they relate to Class A
Shares, are as described in the applicable prospectus. Providers of
personal services to, and/or the maintenance of accounts for, the
holders of Class A Shares may be paid up to 0.25 of 1% of the
average net assets of the Class A Shares in consideration of the
performance of such services.
The minimum initial investments in the Covered Classes are
$1,000,000.00 for Class B Shares and $1,000.00 for Class A Shares.
Subsequent investments may be made in the amount of $100.00 for all
Covered Classes.
Shareholders are entitled to one vote for each share held on the
record date for any action requiring a vote by the shareholders and
a proportionate fractional vote for each fractional share held.
Shareholders of the Trust will vote in the aggregate and not by Fund
or class except (i) as otherwise expressly required by law or when
the Trustees determine that the matter to be voted upon affects only
the interests of the shareholders of a particular Fund or class, and
(ii) only holders of Class A Shares will be entitled to vote on
matters submitted to shareholder vote with respect to the
Shareholder Services Plan applicable to such class.

3. EXPENSE ALLOCATIONS
The expenses incurred pursuant to the Shareholder Services Plan will
be borne solely by the Class A Shares class of the applicable Fund,
and constitute the only expenses allocated to one class and not the
other.

4. EXCHANGE FEATURES
A shareholder may exchange shares of one Fund for the appropriate
class of shares of any other Fund in the Trust.

EFFECTIVENESS
5. This Plan shall become effective with respect to each Class, (i) to
the extent required by the Rule, after approval by a majority vote
of: (a) the Trust's Board of Trustees; (b) the members of the Board
of the Trust who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation of the
Trust's Plan; and/or (ii) upon execution of an exhibit adopting this
Plan with respect to such Class.

6. AMENDMENT
This Plan may be amended at any time, with respect to any Class, by
a majority vote of: (i) the Trust's Board of Trustees; and (ii) the
members of the Board of Trustees who are not interested persons of
the Trust and have no direct or indirect financial interest in the
operation of this Plan.

INDEPENDENCE ONE MUTUAL FUNDS

EXHIBIT A
to the
MULTIPLE CLASS PLAN

INDEPENDENCE ONE PRIME MONEY MARKET FUND:
CLASS A SHARES
CLASS B SHARES

This Multiple Class Plan is adopted by INDEPENDENCE ONE MUTUAL
FUNDS with respect to the Classes of Shares of the portfolio of
INDEPENDENCE ONE MUTUAL FUNDS set forth above.
Witness the due execution hereof as of this 19th day of September,
1995.

INDEPENDENCE ONE MUTUAL FUNDS

By: /s/E. C. Gonzales
Title: President

Date: 9/19/95

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> Independence One Mutual Funds
Independence One Michigan Municipal Cash Fund

<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 74,232,647
<INVESTMENTS-AT-VALUE> 74,232,647
<RECEIVABLES> 543,124
<ASSETS-OTHER> 923
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,776,694
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 64,459
<TOTAL-LIABILITIES> 64,459
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74,712,235
<SHARES-COMMON-STOCK> 74,712,235
<SHARES-COMMON-PRIOR> 66,856,403
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 74,712,235
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,677,145
<OTHER-INCOME> 0
<EXPENSES-NET> 384,248
<NET-INVESTMENT-INCOME> 2,292,897
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,292,897
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,292,897
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 497,552,563
<NUMBER-OF-SHARES-REDEEMED> 491,496,824
<SHARES-REINVESTED> 1,800,093
<NET-CHANGE-IN-ASSETS> 7,855,832
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 288,247
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 528,372
<AVERAGE-NET-ASSETS> 72,061,846
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.030
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.030
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> Independence One Mutual Funds
Independence One Prime Money Market Fund
Class A Shares
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 395,211,023
<INVESTMENTS-AT-VALUE> 395,211,023
<RECEIVABLES> 2,415,296
<ASSETS-OTHER> 901
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 397,627,220
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 856,565
<TOTAL-LIABILITIES> 856,565
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 396,770,655
<SHARES-COMMON-STOCK> 310,991,118
<SHARES-COMMON-PRIOR> 233,606,848
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 310,991,118
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20,597,975
<OTHER-INCOME> 0
<EXPENSES-NET> 2,019,782
<NET-INVESTMENT-INCOME> 18,578,193
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 18,578,193
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14,939,049
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,125,877,244
<NUMBER-OF-SHARES-REDEEMED> 2,056,171,298
<SHARES-REINVESTED> 7,678,573
<NET-CHANGE-IN-ASSETS> 163,163,807
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,424,895
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,910,341
<AVERAGE-NET-ASSETS> 365,538,467
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.050
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> Independence One Mutual Funds
Independence One Prime Money Market Fund
Class B Shares
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 395,211,023
<INVESTMENTS-AT-VALUE> 395,211,023
<RECEIVABLES> 2,415,296
<ASSETS-OTHER> 901
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 397,627,220
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 856,565
<TOTAL-LIABILITIES> 856,565
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 396,770,655
<SHARES-COMMON-STOCK> 85,779,537
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 85,779,537
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20,597,975
<OTHER-INCOME> 0
<EXPENSES-NET> 2,019,782
<NET-INVESTMENT-INCOME> 18,578,193
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 18,578,193
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,639,144
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 386,181,328
<NUMBER-OF-SHARES-REDEEMED> 301,160,074
<SHARES-REINVESTED> 758,034
<NET-CHANGE-IN-ASSETS> 163,163,807
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,910,341
<AVERAGE-NET-ASSETS> 365,538,467
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.050
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> Independence One Mutual Funds
Independence One U.S. Treasury Money Market Fu

<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 297,717,996
<INVESTMENTS-AT-VALUE> 297,717,996
<RECEIVABLES> 27,932
<ASSETS-OTHER> 993
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 297,746,921
<PAYABLE-FOR-SECURITIES> 297,746,921
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 514,093
<TOTAL-LIABILITIES> 514,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 297,232,828
<SHARES-COMMON-STOCK> 297,232,828
<SHARES-COMMON-PRIOR> 244,887,189
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 297,232,828
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,696,372
<OTHER-INCOME> 0
<EXPENSES-NET> 1,648,766
<NET-INVESTMENT-INCOME> 14,047,606
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14,047,606
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14,047,606
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,423,363,168
<NUMBER-OF-SHARES-REDEEMED> 2,379,419,355
<SHARES-REINVESTED> 8,401,826
<NET-CHANGE-IN-ASSETS> 52,345,639
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,093,871
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,648,766
<AVERAGE-NET-ASSETS> 273,467,713
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.050
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> Independence One Mutual Funds
Independence One Equity Plus Fund

<PERIOD-TYPE> 7-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 94,584,745
<INVESTMENTS-AT-VALUE> 112,499,088
<RECEIVABLES> 153,376
<ASSETS-OTHER> 20,047
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 112,672,511
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 63,533
<TOTAL-LIABILITIES> 63,533
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 94,047,010
<SHARES-COMMON-STOCK> 9,888,603
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 81,234
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 566,391
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,914,343
<NET-ASSETS> 112,608,978
<DIVIDEND-INCOME> 1,134,849
<INTEREST-INCOME> 70,364
<OTHER-INCOME> 0
<EXPENSES-NET> 201,914
<NET-INVESTMENT-INCOME> 1,003,299
<REALIZED-GAINS-CURRENT> 566,391
<APPREC-INCREASE-CURRENT> 17,914,343
<NET-CHANGE-FROM-OPS> 19,484,033
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 922,065
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,346,964
<NUMBER-OF-SHARES-REDEEMED> 458,932
<SHARES-REINVESTED> 571
<NET-CHANGE-IN-ASSETS> 112,608,978
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 208,897
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 363,990
<AVERAGE-NET-ASSETS> 83,269,802
<PER-SHARE-NAV-BEGIN> 10.000
<PER-SHARE-NII> 0.110
<PER-SHARE-GAIN-APPREC> 1.380
<PER-SHARE-DIVIDEND> 0.100
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.390
<EXPENSE-RATIO> 0.39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 06
<NAME> Independence One Mutual Funds
Independence One Fixed Income Fund

<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 63,932,910
<INVESTMENTS-AT-VALUE> 62,577,193
<RECEIVABLES> 1,001,868
<ASSETS-OTHER> 14,315
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 63,593,376
<PAYABLE-FOR-SECURITIES> 981,610
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 355,271
<TOTAL-LIABILITIES> 1,336,881
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63,601,039
<SHARES-COMMON-STOCK> 6,342,457
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11,172
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,355,717)
<NET-ASSETS> 62,256,494
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,774,597
<OTHER-INCOME> 0
<EXPENSES-NET> 153,596
<NET-INVESTMENT-INCOME> 1,621,001
<REALIZED-GAINS-CURRENT> 11,172
<APPREC-INCREASE-CURRENT> (1,355,717)
<NET-CHANGE-FROM-OPS> 276,456
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,621,001
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,455,118
<NUMBER-OF-SHARES-REDEEMED> 112,661
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 62,256,494
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 212,343
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 325,802
<AVERAGE-NET-ASSETS> 53,167,259
<PER-SHARE-NAV-BEGIN> 10.000
<PER-SHARE-NII> 0.300
<PER-SHARE-GAIN-APPREC> (0.180)
<PER-SHARE-DIVIDEND> 0.300
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.820
<EXPENSE-RATIO> 0.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 04
<NAME> Independence One Mutual Funds
Independence One U.S. Government Securities Fu

<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 72,438,908
<INVESTMENTS-AT-VALUE> 71,640,714
<RECEIVABLES> 1,268,900
<ASSETS-OTHER> 13,556
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 72,923,170
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 631,834
<TOTAL-LIABILITIES> 631,834
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 73,025,816
<SHARES-COMMON-STOCK> 7,245,275
<SHARES-COMMON-PRIOR> 6,382,809
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63,714
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (798,194)
<NET-ASSETS> 72,291,336
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,298,938
<OTHER-INCOME> 0
<EXPENSES-NET> 272,933
<NET-INVESTMENT-INCOME> 4,026,005
<REALIZED-GAINS-CURRENT> 1,859,938
<APPREC-INCREASE-CURRENT> (999,752)
<NET-CHANGE-FROM-OPS> 4,886,191
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,026,005
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,192,059
<NUMBER-OF-SHARES-REDEEMED> 1,329,593
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 9,777,193
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,800,400)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 481,848
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 724,930
<AVERAGE-NET-ASSETS> 68,857,265
<PER-SHARE-NAV-BEGIN> 9.790
<PER-SHARE-NII> 0.590
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<PER-SHARE-DIVIDEND> 0.590
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<EXPENSE-RATIO> 0.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 07
<NAME> Independence One Mutual Funds
Independence One Michigan Municipal Bond Fund

<PERIOD-TYPE> 5-mos
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-END> Apr-30-1996
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</TABLE>