INDEPENDENCE ONE MUTUAL FUNDS, 485BPOS, 1998-06-26

INDEPENDENCE ONE MUTUAL FUNDS
485BPOS, 1998-06-26

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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. 23 ..................... X
------ ----

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 22 .................................... X
------ ----

INDEPENDENCE ONE MUTUAL FUNDS

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
(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 June 30, 1998 pursuant to paragraph (b)
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.

Copies To:

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

<PAGE>

CROSS REFERENCE SHEET

This Amendment to the Registration Statement of INDEPENDENCE ONE MUTUAL
FUNDS which consists of nine 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; (7) Independence One Michigan Municipal Bond Fund; (8) Independence One
Small Cap Fund; and (9) Independence One International Equity Fund, relates only
to portfolio numbers (1) through (7), and is comprised of the following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page....................(1-9) Cover Page.
Item 2. Synopsis......................(1-4,6,7) Synopsis; (1-9) Summary of
Fund Expenses.
Item 3. Condensed Financial
Information (1-7) Financial Highlights;
(1-9) Performance Information.
Item 4. General Description of
Registrant...................(5,8,9) General Information; (1-9)
Investment Information; (1-4,6,7)
Investment Objective of Each Fund;
(5,8,9) Investment Objective; (1)
Michigan Municipal Cash Fund; (2)
Prime Money Market Fund; (3) U.S.
Treasury Money Market Fund; (4)
Government Securities Fund; (6) Fixed
Income Fund; (7) Michigan Municipal
Bond Fund; (5,8,9) Investment
Policies; (5,8,9) Acceptable
Investments; (5,8) Equity Investment
Considerations; (5,8,9) Derivative
Contracts and Securities; (1-4,6,7)
Portfolio Investments and Strategies;
(1-9) Investment Limitations; (5,8)
Standard & Poor's.
Item 5. Management of the Fund........(1-9) Independence One Mutual Funds
Information; (1-9) Management of the
Trust; (1-7) Distribution
of Shares; (8,9) Distribution of Fund
Shares; (1-9) Fund Administration;
(5,8,9) Brokerage Transactions.
Item 6. Capital Stock and Other
Securities...................(1-7) Dividends and Capital Gains;
(8,9) Dividends; (8,9) Capital Gains;
(1-9) Shareholder Information; (1-9)
Voting Rights; (1-9) Effect of Banking
Laws; (1-9) Tax Information; (1-9)
Federal Income Tax; (1) Michigan
Municipal Cash Fund Tax
Considerations; (7) Michigan Municipal
Bond Fund Tax Considerations.

<PAGE>

Item 7. Purchase of Securities Being
Offered......................(1-9) Net Asset Value; (1-4,6,7)
Investing in the Funds; (5,8,9)
Investing in the Fund; (1-9) Share
Purchases; (1-9) Minimum Investment
Required; (1-3) Cash Sweep Program;
(1-9) What Shares Cost; (1-7)
Confirmations and Account Statements;
(8,9) Certificates and Confirmations;
(1-9) Systematic Investment Program.
Item 8 Redemption or Repurchase......(1-7) Redeeming Shares; (8,9)
Redeeming Fund Shares; (1-9)
Systematic Withdrawal Program; (1-9)
Accounts with Low Balances; (1-3)
Redemption in Kind; (1-9) Exchange
Privilege; (5-9) 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....................(1-9) Cover Page.
Item 11. Table of Contents (1-9) Table of Contents.
Item 12. General Information and
History......................(1-4,6,7) General Information About
the Funds; (5,8,9) General
Information About the Fund.
Item 13. Investment Objectives and
Policies.....................(1-4,6,7) Investment Objective and
Policies of the Funds; (5,8,9)
Investment Objective and Policies;
(4,6,7) Acceptable Investments;
(1-3,5,8,9) Types of Investments;
(4-9) Portfolio Turnover; (4,6,7)
Portfolio Investments and Strategies;
(1-9) Investment Limitations; (1-3)
Regulatory Compliance; (1) Michigan
Municipal Cash Fund Investment Risks;
(7) Michigan Municipal Bond Fund
Investment Risks.
Item 14. Management of the Fund........(1-9) Independence One Mutual Funds
Management; (1-9) Officers and
Trustees; (1-9) Fund
Ownership; (1-9) Trustee Liability;
(1-9) Trustees Compensation;(1-9)
Massachusetts Partnership Law.
Item 15. Control Persons and Principal
Holders of Securities Not applicable.
Item 16. Investment Advisory and Other
Services.....................(1-9) Investment Advisory Services;
(1-3,5,8,9) Adviser to the Fund; (5,9)
Sub-Adviser to the Fund; (4,6,7)
Adviser and Sub-Adviser to the Funds;
(1-3,5) Advisory Fees; (4,6-9)
Advisory and Sub-Advisory Fees; (5)
Sub-Advisory Fees; (1-9) Other
Services; (1-9) Trust Administration;
(1-9) Custodian; (1-9) Transfer Agent
and Dividend Disbursing Agent; (1-9)
Independent Auditors.
Item 17. Brokerage Allocation..........(1-9) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.

<PAGE>

Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered......................(1-9) Purchasing Shares; (1-9)
Determining Net Asset Value; (1-3)
Use of Amortized Cost Method;
(4-9) Determining Market Value of
Securities; (1-9) Redeeming Shares;
(1-9) Redemption in Kind;
(1-4,6,7) Exchange Privilege; (4-9)
Capital Gains.
Item 20. Tax Status....................(1-9) Tax Status; (1-4,6,7) The Funds'
Tax Status; (5,8,9) The Fund's Tax
Status; (1-9) Shareholders' Tax
Status.
Item 21. Underwriters..................(1,3) Distribution Plan; (2a)
Shareholder Services Plan; (1-9)
Conversion to Federal Funds.
Item 22. Calculation of Yield
Quotations of Money Market
Funds.........................(1-9) Performance Comparisons; (1-9)
Economic and Market Information; (1,7)
Tax Equivalent
Yield;(1-3) Effective Yield; (1-9)
Yield; (1-9) Total Return; (1-4,6,7)
Appendix.
Item 23. Financial Statements..........(1-4,6,7) Financial Statements are
incorporated by reference to the
Annual Reports of the
Registrant, dated April 30, 1998
(File Nos. 33-26516 and 811-5752); (5)
Financial Statements are
filed in Part A; (8,9) Financial
Statements are to be filed by
amendment.

INDEPENDENCE ONE PRIME MONEY MARKET FUND
CLASS A SHARES
CLASS B SHARES
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH 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 Prime Money Market Fund

. Independence One U.S. Treasury Money Market Fund

. Independence One Michigan Municipal Cash 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 POSSIBLE LOSS OF
PRINCIPAL. THE FUNDS ATTEMPT TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO DO SO. BECAUSE
INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND MAY INVEST A SIGNIFICANT PORTION
OF ITS ASSETS IN SECURITIES OF A SINGLE ISSUER, AN INVESTMENT IN THIS FUND MAY
INVOLVE ADDITIONAL RISKS COMPARED TO A FULLY DIVERSIFIED MONEY MARKET FUND.

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 June 30,
1998, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement is incorporated by reference into this prospectus.
You may request a copy of the Statement free of charge 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 NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

Prospectus dated June 30, 1998

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

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

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

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

INVESTMENT INFORMATION 8
- -------------------------------------

Investment Objective of Each
Fund 8

Prime Money Market Fund 8

U.S. Treasury Money Market
Fund 9

Michigan Municipal Cash Fund 10

PORTFOLIO INVESTMENTS AND
STRATEGIES 13
- -------------------------------------

Investment Limitations 14

INDEPENDENCE ONE MUTUAL FUNDS
INFORMATION 15
- -------------------------------------

Management of the Trust 15

Distribution of Shares 16

Fund Administration 17

NET ASSET VALUE 18
- -------------------------------------

INVESTING IN THE FUNDS 18
- -------------------------------------

Share Purchases 18

Minimum Investment Required 19

Cash Sweep Program 19

What Shares Cost 19

Confirmations and Account
Statements 20

Dividends 20

Capital Gains 20

Systematic Investment
Program 20

EXCHANGE PRIVILEGE 20
- -------------------------------------

REDEEMING SHARES 22
- -------------------------------------

Systematic Withdrawal
Program 24

Accounts with Low Balances 24

Redemption in Kind 24

SHAREHOLDER INFORMATION 25
- -------------------------------------

Voting Rights 25

EFFECT OF BANKING LAWS 25
- -------------------------------------

TAX INFORMATION 26
- -------------------------------------

Federal Income Tax 26

Michigan Municipal Cash Fund Tax
Considerations 26

PERFORMANCE INFORMATION 27
- -------------------------------------

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 Prime Money Market Fund ("Prime Money Market Fund") seeks
to provide current income consistent with stability of principal. It pursues
its investment objective by investing in a variety of high-quality money
market instruments maturing in 397 days or less. The Fund currently offers
two classes of shares: Class A Shares and Class B Shares. The classes of
shares represent interests in one common investment portfolio but differ in
that Class A Shares are subject to a shareholder servicing fee paid by the
Fund, while Class B Shares, which are sold primarily to certain
institutional investors, will not be subject to such shareholder servicing
fees.

. Independence One U.S. Treasury Money Market Fund ("U.S. Treasury Money
Market Fund") seeks to provide current income consistent with stability
of principal. The Fund pursues its objective by investing in a portfolio
of short-term U.S. Treasury obligations.

. Independence One Michigan Municipal Cash Fund ("Michigan Municipal Cash
Fund") seeks to provide stability of income and current income exempt from
federal regular income tax and Michigan state income tax consistent with
stability of principal. In addition, the Fund provides income exempt from
the Michigan intangibles tax and income taxes of Michigan municipalities.
The municipal securities in which the 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"). The Fund may not be a suitable investment
for retirement plans since it invests in municipal securities.

For information on how to purchase shares of the Funds, please refer to
"Investing in the Funds." The minimum initial investment in shares of the
Prime Money Market Fund Class A Shares, the U.S. Treasury Money Market Fund,
and the Michigan Municipal Cash Fund is $1,000. The minimum initial investment
in the Prime Money Market Fund Class B Shares is $1,000,000. Subsequent
investments in all the Funds must be in amounts of at least $100. See "Minimum
Investment Required."

The Funds attempt to stabilize the value of a share at $1.00. Fund shares are
currently sold and redeemed at that price. 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.

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 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 MONEY MARKET FUNDS
SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRIME MONEY U.S. TREASURY MICHIGAN
MARKET FUND MONEY MUNICIPAL
CLASS A CLASS B MARKET FUND CASH FUND
------- ------- ------------- ---------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)...... None None None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of
offering price).......................... None None None None
Contingent Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable)...... None None None None
Redemption Fee (as a percentage of amount
redeemed, if applicable)................. None None None None
Exchange Fee.............................. None None None None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C> <C> <C>
Management Fees (after waiver) (1)........ 0.15% 0.15% 0.40% 0.24%
12b-1 Fees (2)............................ None None 0.00% 0.00%
Shareholder Services Fees (3)............. 0.25% None None None
Total Other Expenses (after waiver)....... 0.19% 0.19% 0.19% 0.25%
Total Fund Operating Expenses (after
waiver) (4)........................... 0.59% 0.34% 0.59% 0.49%
</TABLE>

(1) The management fees for the Prime Money Market Fund and the Michigan
Municipal Cash 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 both Funds is 0.40%.

(2) As of the date of this prospectus, the U.S. Treasury Money Market and the
Michigan Municipal Cash Fund are not paying or accruing 12b-1 fees. The
Funds will not pay or accrue 12b-1 fees until a separate class of shares has
been created for certain institutional investors. The Funds' distributor can
pay up to 0.25% as a 12b-1 fee which is reimbursed to the distributor by the
Funds. See "Distribution of Shares."

(3) The Prime Money Market Fund Class A Shares pays a shareholders services fee
of up to 0.25% of Class A Shares' average daily net assets.

(4) The Total Fund Operating Expenses for Prime Money Market Class A Shares and
Class B Shares and Michigan Municipal Cash Fund for the fiscal year ended
April 30, 1998, would have been 0.84%, 0.59%, and 0.65% respectively, absent
the voluntary waiver of a portion of the management fee.

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."

EXAMPLE

You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.
<TABLE>
<CAPTION>
PRIME MONEY U.S. TREASURY MICHIGAN
MARKET FUND MONEY MUNICIPAL
CLASS A CLASS B MARKET FUND CASH FUND
------- ------- ------------- ---------
<S> <C> <C> <C> <C>
1 Year................................. $ 6 $ 3 $ 6 $ 5
3 Years................................ $19 $11 $19 $16
5 Years................................ $33 $19 $33 $27
10 Years............................... $74 $43 $74 $62
</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 PRIME MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--CLASS A SHARES
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The audit report, dated June 12, 1998, of KPMG Peat Marwick LLP (the Fund's
independent auditors), on the Fund's Financial Statements for the year ended
April 30, 1998, and on the Financial Highlights for the five-year period then
ended, is included in the Fund's Combined 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 Combined Annual
Report, which may be obtained from the Fund.

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990(A)
- ----------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.05 0.05 0.05 0.05 0.03 0.03 0.05 0.07 0.08
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.05) (0.05) (0.05) (0.05) (0.03) (0.03) (0.05) (0.07) (0.08)
- ----------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN (B) 5.20% 4.94% 5.33% 4.66% 2.73% 2.99% 4.89% 7.55% 7.99%
- -----------------------
RATIOS TO AVERAGE
NET ASSETS
- -----------------------
Expenses 0.59% 0.60% 0.61% 0.61% 0.59% 0.58% 0.54% 0.53% 0.40%*
- -----------------------
Net investment income 5.07% 4.83% 5.19% 4.51% 2.70% 2.91% 4.73% 7.26% 8.24%*
- -----------------------
Expense waiver (c) 0.25% 0.25% 0.25% -- 0.02% 0.04% 0.08% 0.08% 0.23%*
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $389,522 $337,836 $310,991 $233,607 $310,588 $423,355 $309,009 $371,994 $328,434
- -----------------------
</TABLE>

*Computed on an annualized basis.

(a) Reflects operations for the period from June 1, 1989 (date of initial public
investment) to April 30, 1990.

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

Further information about Prime Money Market Fund's performance is contained in
the Combined Annual Report for the fiscal year ended April 30, 1998, which can
be obtained free of charge.

INDEPENDENCE ONE PRIME MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--CLASS B SHARES
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The audit report, dated June 12, 1998, of KPMG Peat Marwick LLP (the Fund's
independent auditors), on the Fund's Financial Statements for the year ended
April 30, 1998, and on the Financial Highlights for each of the periods
presented, is included in the Fund's Combined 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
Combined Annual Report, which may be obtained from the Fund.

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------
1998 1997 1996(A)
- ----------------------------------------- ------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------
Net investment income 0.05 0.05 0.05
- -----------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions from net investment income (0.05) (0.05) (0.05)
- ----------------------------------------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------- ------- ------- -------
TOTAL RETURN (B) 5.46% 5.20% 5.07%
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.34% 0.35% 0.36%*
- -----------------------------------------
Net investment income 5.31% 5.06% 5.34%*
- -----------------------------------------
Expense waiver (c) 0.25% 0.25% 0.25%*
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $81,723 $71,168 $85,780
- -----------------------------------------
</TABLE>

*Computed on an annualized basis.

(a) Reflects operations for the period from June 13, 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 Prime Money Market Fund's performance is contained in
the Combined Annual Report for the fiscal year ended April 30, 1998, which can
be obtained free of charge.

INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990(A)
- ----------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.05 0.05 0.05 0.04 0.03 0.03 0.05 0.07 0.08
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.05) (0.05) (0.05) (0.04) (0.03) (0.03) (0.05) (0.07) (0.08)
- ----------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------
TOTAL RETURN (B) 5.03% 4.86% 5.28% 4.49% 2.63% 2.92% 4.81% 7.17% 7.83%
- -----------------------
RATIOS TO AVERAGE
NET ASSETS
- -----------------------
Expenses 0.59% 0.59% 0.60% 0.63% 0.61% 0.54% 0.57% 0.60% 0.35%*
- -----------------------
Net investment income 4.92% 4.75% 5.14% 4.41% 2.60% 2.90% 4.55% 6.91% 8.17%*
- -----------------------
Expense waiver (c) -- -- -- -- -- 0.09% 0.12% 0.07% 0.32%*
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $320,568 $245,289 $297,233 $244,887 $215,832 $214,069 $224,803 $131,263 $89,947
- -----------------------
</TABLE>

*Computed on an annualized basis.

(a) Reflects operations for the period from June 1, 1989 (date of initial public
investment) to April 30, 1990.

(b) Based on net asset value.

Further information about U.S. Treasury Money Market Fund's performance is
contained in the Combined Annual Report for the fiscal year ended April 30,
1998, which can be obtained free of charge.

INDEPENDENCE ONE MICHIGAN MUNICIPAL CASH FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
--------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990(A)
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
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INCOME FROM INVESTMENT
OPERATIONS
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Net investment income 0.03 0.03 0.03 0.03 0.02 0.02 0.04 0.05 0.05
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LESS DISTRIBUTIONS
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Distributions from net
investment income (0.03) (0.03) (0.03) (0.03) (0.02) (0.02) (0.04) (0.05) (0.05)
- ----------------------- -------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------- -------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL RETURN (B) 3.24% 3.04% 3.24% 2.81% 1.98% 2.27% 3.68% 5.18% 5.14%
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RATIOS TO AVERAGE
NET ASSETS
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Expenses 0.49% 0.48% 0.53% 0.59% 0.50% 0.53% 0.50% 0.67% 0.44%*
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Net investment income 3.19% 3.01% 3.18% 2.80% 1.96% 2.23% 3.51% 5.02% 5.70%*
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Expense waiver (c) 0.16% 0.20% 0.20% 0.21% 0.22% 0.20% 0.39% 0.19% 0.39%*
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SUPPLEMENTAL DATA
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Net assets, end of
period (000 omitted) $102,770 $84,019 $74,712 $66,856 $55,013 $84,763 $71,745 $31,705 $28,921
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</TABLE>

*Computed on an annualized basis.

(a) Reflects operations for the period from June 14, 1989 (date of initial
public investment) to April 30, 1990.

(b) Based on net asset value.

Further information about Michigan Municipal Cash Fund's performance is
contained in the Combined Annual Report for the fiscal year ended April 30,
1998, which can be obtained free of charge.

INVESTMENT INFORMATION
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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 complying with the
diversification and other requirements of Rule 2a-7 under the Investment Company
Act of 1940 which regulates money market mutual funds and 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.

PRIME MONEY MARKET FUND

INVESTMENT OBJECTIVE AND POLICIES. The investment objective of the Fund is to
provide current income consistent with stability of principal. The Fund pursues
its investment objective by investing exclusively in a portfolio of money market
instruments maturing in 397 days or less. The average maturity of money market
instruments in the Fund's portfolio, computed on a dollar-weighted basis, will
be 90 days or less.

ACCEPTABLE INVESTMENTS. The Fund invests in high quality money market
instruments that are either rated in the highest short-term rating category by
one or more nationally recognized statistical rating organizations ("NRSROs") or
of comparable quality to securities having such ratings. Examples of these
instruments include, but are not limited to:

. domestic issues of corporate or municipal debt obligations, including
variable rate demand notes;

. commercial paper (including Canadian Commercial Paper and Europaper);

. certificates of deposits, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");

. short-term credit facilities, such as demand notes;

. asset-backed securities;

. obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities
("Government Securities"); and

. other money market instruments.

The Fund invests only in instruments denominated and payable in U.S. dollars.

BANK INSTRUMENTS. The Fund only invests in Bank Instruments either issued by an
institution having capital, surplus and undivided profits over $100 million or
insured by the Bank Insurance Fund ("BIF") or the Savings Association Insurance
Fund ("SAIF"). Bank Instruments may include Eurodollar Certificates of Deposit
("ECDs"), Yankee Certificates of Deposit ("Yankee CDs") and Eurodollar Time
Deposits ("ETDs"). The Fund will treat securities credit enhanced with a bank's
letter of credit as Bank Instruments.

SHORT-TERM CREDIT FACILITIES. Demand notes are short-term borrowing arrangements
between a corporation 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. The Fund
may also enter into, or acquire participations in, short-term revolving credit
facilities with corporate borrowers. Demand notes and other short-term credit
arrangements usually provide for floating or variable rates of interest.

ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial interest in
a special purpose trust, limited partnership interests or commercial paper or
other debt securities issued by a special purpose corporation. Although the
securities often have some form of credit or liquidity enhancement, payments on
the securities depend predominately upon collections of the loans and
receivables held by the issuer.

INVESTMENT RISKS. ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and
Europaper are subject to somewhat different risks than domestic obligations of
domestic banks. Examples of these risks include international, economic, and
political developments, foreign governmental restrictions that may adversely
affect the payment of principal or interest, foreign withholding or other taxes
on interest income, difficulties in obtaining or enforcing a judgment against
the issuing bank, and the possible impact of interruptions in the flow of
international currency transactions. Different risks may also exist for ECDs,
ETDs, and Yankee CDs because the banks issuing these instruments, or their
domestic or foreign branches, are not necessarily subject to the same regulatory
requirements that apply to domestic banks, such as reserve requirements, loan
limitations, examinations, accounting, auditing, and recordkeeping, and the
public availability of information. These factors will be carefully considered
by the Adviser in selecting investments for the Fund. For an explanation of the
risks associated with an investment in municipal securities, see "Michigan
Municipal Cash Fund-- Investment Risks" below.

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

U.S. TREASURY MONEY MARKET FUND

INVESTMENT OBJECTIVE AND POLICIES. The investment objective of the Fund is to
provide current income consistent with stability of principal. The Fund pursues
its investment objective by investing exclusively in a portfolio of short-term
U.S. Treasury obligations. The average maturity of the U.S. Treasury obligations
in the Fund's portfolio, computed on a dollar-weighted basis, will be 90 days or
less.

ACCEPTABLE INVESTMENTS. The Fund invests only in short-term U.S. Treasury
obligations, which are normally held to maturity. These instruments are issued
by the U.S. government, its agencies or instrumentalities, and are fully
guaranteed as to principal and interest by the United States. They mature in 397
days or less from the date of acquisition unless they are purchased under a
repurchase agreement that provides for repurchase by the seller within one year
from the date of acquisition.

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

MICHIGAN MUNICIPAL CASH FUND

INVESTMENT OBJECTIVE AND POLICIES. The investment objective of the Fund is to
provide stability of income and current income exempt from federal regular
income tax and Michigan state income tax consistent with stability of principal.
In addition, the Fund provides income exempt from the Michigan intangibles tax
and income taxes of Michigan municipalities. (Federal regular income tax does
not include the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.) The Fund pursues its investment
objective by investing at least 80% of its assets in a portfolio of Michigan
Municipal Securities with remaining maturities of 397 days or less at the time
of purchase by the Fund. The average maturity of the securities in the Fund's
portfolio, computed on a dollar-weighted basis, will be 90 days or less.
Michigan Municipal Securities include obligations issued by or on behalf of the
State of Michigan, its political subdivisions or agencies, or debt obligations
of any territory or possession of the United States, or any political
subdivision of any of the foregoing, or of the District of Columbia, 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 federal
regular income tax and personal income taxes imposed by the State of Michigan
and Michigan municipalities. Michigan Municipal Securities also include
participation interests in the above obligations. Interest income of the Fund
which is exempt from tax will retain its tax-free status when distributed to
Michigan shareholders. However, income distributed by the Fund may not
necessarily be exempt from state or municipal taxes in states other than
Michigan.

The municipal securities in which the Fund invests must either be rated in one
of the two highest short-term rating categories by one or more NRSROs or be of
comparable quality to securities having such ratings.

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 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. Interest on and principal of revenue bonds, however, 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.

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 municipal securities subject to
the participation interests are not limited to maturities of 397 days or less,
so long as the participation interests include the right to demand payment,
typically within seven days, from the issuers of those interests. The Fund will
purchase only participation interests which have such a demand feature or which
mature in less than 397 days. 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 Trustees of the Trust will determine that participation
interests meet the prescribed quality standards for the Fund.

In addition, the Fund may engage in when-issued and delayed delivery
transactions and invest in restricted and illiquid securities, securities of
other investment companies, and variable rate demand notes. The Fund may also
acquire securities that are subject to puts and standby commitments to purchase
securities at their principal amount within a fixed period following a demand by
the Fund. See "Portfolio Investments and Strategies."

TEMPORARY INVESTMENTS. As a fundamental policy which may only be changed by
shareholders, the Fund invests its assets so that at least 80% of its annual
interest income will be exempt from federal regular income tax and Michigan
state income tax, except in unusual circumstances, such as when management feels
that market conditions dictate a defensive posture in temporary investments.
Interest income from temporary investments may be taxable to shareholders as
ordinary income. These temporary investments include: obligations issued by or
on behalf of municipal or corporate issuers having the same quality
characteristics as municipal securities purchased by the Fund (including
obligations whose interest is subject to the federal alternative minimum income
tax); marketable obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities; instruments issued by banks or savings
associations which have capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment and if their deposits are insured by the
BIF or the SAIF, which are both administered by the Federal Deposit Insurance
Corporation ("FDIC"); repurchase agreements and prime commercial paper rated A-1
by Standard & Poor's ("S&P"), Prime-1 by Moody's Investor Service, Inc.
("Moody's"), or F-1 by Fitch IBCA, Inc. ("Fitch"), and variable amount demand
master notes.

STANDBY COMMITMENTS. Some securities dealers are willing to sell Michigan
Municipal Securities to the Fund accompanied by their commitments to repurchase
the municipal securities prior to maturity, at the Fund's option, for the
amortized cost of the municipal securities at the time of repurchase. These
arrangements are not used to protect against changes in the market value of
municipal securities. They permit the Fund, however, to remain fully invested
and still provide liquidity to satisfy redemptions. The cost of Michigan
Municipal Securities accompanied by these "standby" commitments could be greater
than the cost of municipal securities without such commitments. Standby
commitments are not marketable or otherwise assignable and have value only to
the Fund. The default or bankruptcy of a securities dealer giving such a
commitment would not affect the quality of the Michigan Municipal Securities
purchased but may make such securities more difficult to sell without such a
commitment. The Fund enters into standby commitments only with those dealers
whose credit the Adviser believes to be of high quality.

CONCENTRATION OF INVESTMENTS. The Fund may invest more than 25% of its assets in
industrial revenue bonds, including pollution control bonds. The 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 type projects. However, the Fund may invest more than 25% 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, such as repurchase agreements.

The Fund will invest more than 25% of its assets in Michigan Municipal
Securities. The Fund may invest more than 25% of the value of its assets in
tax-exempt project notes guaranteed by the U.S. government, regardless of the
location of the issuing municipality.

In addition, the Fund will not invest more than 5% of its assets in industrial
revenue bonds where the payment of principal and interest is the responsibility
of companies (or guarantors, if applicable) with less than three years of
continuous operations, including the operation of any predecessor. This
limitation may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in this limitation
becomes effective.

If the value of Fund assets invested in the securities of a governmental
subdivision changes because of changing values, the Fund will not be required to
make any reduction in its holdings.

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.

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 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. Michigan Municipal Cash Fund's concentration in Michigan
Municipal Securities may entail a greater level or risk than other types of
money market funds.

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

PORTFOLIO INVESTMENTS AND STRATEGIES
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REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S. government
securities or other securities to the Funds and agree at the time of sale to
repurchase them at a mutually agreed upon time and price within one year from
the date of acquisition. 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.

VARIABLE RATE DEMAND NOTES. Prime Money Market Fund and Michigan Municipal Cash
Fund may invest in variable rate demand notes which are long-term corporate debt
instruments or municipal securities that have variable or floating interest
rates and provide the Funds 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 a published interest rate or
interest rate index. Most variable rate demand notes allow the Funds to demand
the repurchase of the security on not more than seven days prior notice. Other
notes only permit the Funds to tender the security at the time of each interest
rate adjustment or at other fixed intervals. See "Demand Features." The Funds
treat variable rate demand notes as maturing on the later of the date of the
next interest adjustment or the date on which the Funds may next tender the
security for repurchase.

CREDIT ENHANCEMENT. Certain of the Funds' acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. Any bankruptcy,
receivership, default, or change in the credit quality of the party providing
the credit enhancement will adversely affect the quality and marketability of
the underlying security and could cause losses to a Fund and affect its share
price. Prime Money Market Fund and Michigan Municipal Cash Fund may each have
more than 25% of its total assets invested in securities credit-enhanced by
banks.

DEMAND FEATURES. Prime Money Market Fund and Michigan Municipal Cash 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 a 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 Funds use these
arrangements to provide the Funds 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.

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. The Funds
engage in when-issued and delayed delivery transactions only for the purpose of
acquiring portfolio securities consistent with each Fund's investment objective
and policies, not for investment leverage.

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. INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. Prime
Money Market Fund and Michigan Municipal Cash Fund may each invest its assets in
securities of other investment companies as an efficient means of carrying out
its investment policies. It should be noted that investment companies incur
certain expenses, such as management fees, and therefore, any investment by the
Funds in shares of other investment companies may be subject to such duplicate
expenses.

INVESTMENT LIMITATIONS

BORROWING MONEY. The Funds will not borrow money directly or through reverse
repurchase agreements or pledge securities except, under certain circumstances,
a Fund may borrow up to one-third of the value of its total assets and pledge up
to 10% of the value of those assets to secure such borrowings.

DIVERSIFICATION. The Prime Money Market 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 the securities of any one issuer (other than cash or securities issued
or guaranteed by the government of the United States or its agencies or
instrumentalities).

Michigan Municipal Cash Fund will not invest more than 10% of its total assets
in the securities of any one issuer (except cash and cash items, repurchase
agreements collateralized by U.S. Treasury securities and U.S. government
obligations) with respect to securities comprising 75% of its assets.

The above limitations may not be changed without shareholder approval. Unless
indicated otherwise, the following limitations may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in these limitations becomes effective.

RESTRICTED AND ILLIQUID SECURITIES. As a fundamental limitation which may only
be changed by shareholders, Prime Money Market Fund and Michigan Municipal Cash
Fund may invest up to 10% of their respective total assets in restricted
securities. This restriction is not applicable to commercial paper issued under
the Section 4(2) of the Securities Act of 1933. Restricted securities are any
securities in which a Fund may otherwise invest pursuant to its investment
objective and policies, but which are subject to restriction on resale under
federal securities law. All of the Funds may invest in illiquid securities. The
Funds will limit investments in illiquid securities, including certain
restricted securities not determined by the Trustees to be liquid,
non-negotiable time deposits, and repurchase agreements providing for settlement
in more than seven days after notice, to 10% of their respective net assets.

Prime Money Market 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 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. When a Fund invests in
certain restricted securities determined by the Trustees to be liquid, such
investments could have the effect of increasing the level of Fund illiquidity to
the extent that the buyers in the secondary market for such securities become,
for a time, uninterested in purchasing these securities.

INDEPENDENCE ONE MUTUAL FUNDS INFORMATION
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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 may receive an annual investment advisory fee equal
to 0.40% of each Fund's average daily net assets. The Adviser may voluntarily
choose to waive a portion of its fee or reimburse certain expenses of the Funds.

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 fourth largest bank
holding company in terms of total assets, as of December 31, 1997, 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. IOCM and the Trust Division have managed custodial assets
totaling $11.4 billion. Of this amount, IOCM and the Trust Division have
investment discretion over $2.2 billion.

Michigan National Bank has managed mutual funds since May 1989. 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 public companies. 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.

DISTRIBUTION OF 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, Inc.

DISTRIBUTION PLAN. Pursuant to the provisions of a distribution plan adopted in
accordance with the Investment Company Act Rule 12b-1 (the "Plan"), U.S.
Treasury Money Market Fund and Michigan Municipal Cash Fund will pay to the
distributor an amount computed at an annual rate of 0.25% of the average daily
net asset value of the shares to finance any activity which is principally
intended to result in the sale of shares of the Funds subject to the Plan.

However, the Funds will not accrue or pay any distribution expenses pursuant to
the Plan until a separate class of shares has been registered with the SEC.

The distributor may from time to time and for such periods as its deems
appropriate, voluntarily reduce its compensation under the Plan to the extent
the expenses attributable to the shares of the Funds exceed such lower expense
limitation as the distributor may, by notice of the Trust, voluntarily declare
to be effective.

The distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers ("brokers")
to provide sales and/or administrative services as agents for their clients or
customers who beneficially own shares of the Funds. Administrative services may
include, but are not limited to, the following functions; providing office
space, equipment, telephone facilities, and various personnel, including
clerical, supervisory, and computer, as necessary or beneficial to establish and
maintain shareholder accounts and records; processing purchase and redemption
transactions and automatic investments of client account cash balances;
answering routine client inquiries regarding the shares of the Funds; assisting
clients in changing dividend options, account designations, and addresses, and
providing such other services as the Funds reasonably request for their shares.

Financial institutions will receive fees from the distributor based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined from time to time by the
distributor.

The Funds' Plan is a compensation type plan. As such, the Funds make no payments
to the distributor except as described above. Therefore, the Funds do not pay
for reimbursed expenses of the distributor, including amounts expended by the
distributor in excess of amounts received by it from the Funds, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by the Funds
under the Plan.

The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings association) from being an underwriter or distributor of most
securities. In the event the Glass-Steagall Act is deemed to prohibit depository
institutions from acting in the administrative capacities described above or
should Congress relax current restrictions on depository institutions, the
Trustees will consider appropriate changes in the services.

SHAREHOLDER SERVICES AGREEMENT. Prime Money Market Fund has entered into a
Shareholder Services Agreement with respect to Class A Shares under which it may
make payments of up to 0.25% of the average daily net asset value of Class A
Shares to obtain certain personal services for shareholders and the maintenance
of shareholder accounts ("shareholder services"). Under the Agreement, Michigan
National Bank will either perform shareholder services directly or will select
financial institutions to perform shareholder services. Financial institutions
will receive fees based upon Class A Shares owned by their clients or customers.
The schedules of such fees and the basis upon which such fees will be paid will
be determined from time to time by the Fund and Michigan National Bank.

FUND ADMINISTRATION

ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, Inc., 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 AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE TRUST
------------------ -----------------------
<S> <C>
.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 reimburse a portion of its fee.

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

YEAR 2000 STATEMENT. Like other mutual funds and business organizations
worldwide, the Funds' service providers (among them, the adviser, distributor,
administrator and transfer agent) must ensure that their computer systems are
adjusted to properly process and calculate date-related information from and
after January 1, 2000. Many software programs and, to a lesser extent, the
computer hardware in use today cannot distinguish the year 2000 from the year
1900. Such a design flaw could have a negative impact in the handling of
securities trades, pricing and accounting services. The Funds and their service
providers are actively working on necessary changes to computer systems to deal
with the year 2000 issue and believe that systems will be year 2000 compliant
when required. Analysis continues regarding the financial impact of instituting
a year 2000 compliant program on the Funds' operations.

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

The Funds attempt to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by adding the interest of shares in the value of all
securities and other assets of the Funds, subtracting the interest of shares in
the liabilities of the Funds and those attributable to shares, and dividing the
remainder by the number of shares outstanding. The Funds, of course, cannot
guarantee that the net asset value will always remain at $1.00 per share.

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 all business days except
on days which the New York Stock Exchange is closed and federal holidays
restricting wire transfers. In connection with the sale of a Fund's 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. An investor 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. Payment may be made either by check or wire transfer of federal
funds.

To purchase by check, the check must be included with the order and made payable
to "Independence One (include name of Fund and, if applicable, "Class A" or
"Class B" Shares)." Checks must be converted into federal funds to be considered
received.

Prior to purchasing by wire, investors should call their Michigan National Bank
or Independence One representative or their authorized broker. It is the
responsibility of Michigan National Bank, Independence One and authorized
brokers to transmit orders promptly. 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 and, if applicable, "Class A" or "Class B" Shares); 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 Prime Money Market Fund Class A Shares, the
U.S. Treasury Money Market Fund, and Michigan Municipal Cash Fund by an
investor is $1,000.

The minimum initial investment in Prime Money Market Fund Class B Shares by an
investor is $1,000,000. An institutional investor's minimum investment will be
calculated by combining all accounts it maintains with the Fund for Class B
Shares.

Subsequent investments in all the Funds must be in amounts of at least $100.

CASH SWEEP PROGRAM

Cash accumulations in demand deposit accounts with depository institutions such
as banks and savings associations may be automatically invested in shares of the
Funds on a day selected by the depository institution and its customer, or when
the demand deposit account reaches a predetermined dollar amount (e.g.
$5,000).

PARTICIPATING DEPOSITORY INSTITUTIONS. Participating depository institutions are
responsible for prompt transmission of orders relating to the program. These
depository institutions are the record owners of the shares of the Funds.
Depository institutions participating in this program may charge their customers
for their services relating to the program. This prospectus should, therefore,
be read together with any agreement between the customer and the depository
institution with regard to the services provided, the fees charged for those
services, and any restrictions and limitations imposed.

WHAT SHARES COST

Fund shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Funds.

The net asset value is determined at 12:00 noon and 4:00 p.m. (Eastern time),
and as of 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 the 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; or (iii) the following holidays: New Year's Day, Martin Luther King,
Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day.

CONFIRMATIONS AND ACCOUNT STATEMENTS

As transfer agent for the Funds, Federated Shareholder Services Company
maintains a share account for each shareholder of record. Share certificates
are not issued.

Monthly confirmations are sent to report transactions such as purchases and
redemptions as well as dividends paid during the month.

DIVIDENDS

Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Funds unless cash
payments are requested by shareholders in writing to the Funds through their
Michigan National Bank or Independence One representative or authorized broker.
Share purchase orders received by a Fund before 11:00 a.m. (Eastern time) earn
dividends that day.

In the case of Prime Money Market Fund, under limited circumstances,
arrangements may be made with Michigan National Bank for same-day receipt of
purchase orders to earn dividends that day, if such orders are received before
3:00 p.m. (Eastern time). Investors interested in establishing such arrangements
should call Michigan National Bank at 1-800-334-2292, and are reminded that the
Fund reserves the right to refuse any purchase request.

CAPITAL GAINS

Capital gains, if any, could result in an increase in dividends. Capital losses
could result in a decrease in dividends. If, for some extraordinary reason, the
Fund realizes net long-term capital gains, it will distribute them at least once
every 12 months.

SYSTEMATIC INVESTMENT PROGRAM

With respect to shareholders of Prime Money Market Fund Class A Shares, U.S.
Treasury Money Market Fund, and Michigan Municipal Cash Fund, once the 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.

EXCHANGE PRIVILEGE
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All shareholders of the Funds are shareholders of the Trust which consists of
the following additional funds: Independence One Equity Plus Fund, Independence
One Fixed Income Fund, Independence One Michigan Municipal Bond Fund,
Independence One U.S. Government Securities Fund, Independence One International
Equity Fund, and Independence One Small Cap Fund ("participating funds").
Shareholders of the Funds have access to the participating funds through an
exchange program.

Shareholders who exercise this exchange privilege must exchange shares having a
net asset value of at least $1,000. Prior to any exchange, the shareholder must
receive a copy of the current prospectus of the participating fund into which an
exchange is to be made. 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 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 broker directly.

An authorization form permitting the Funds to accept telephone exchange 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.

Shares may be exchanged by telephone only between fund accounts having identical
shareholder registrations. Exchange instructions given by telephone may be
electronically 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 a Fund will not receive a dividend from
that Fund on the date of the exchange. Shareholders of the Funds may have
difficulty in making exchanges by telephone through banks, brokers and other
financial institutions during times of drastic economic or market changes. If
shareholders cannot contact their Michigan National Bank or Independence One
representative or authorized broker by telephone, it is recommended that an
exchange request be made in writing and sent by mail for next day delivery. Send
mail requests to: Independence One Mutual Funds, 27777 Inkster Road, Mail Code
10-52, Farmington Hills, Michigan 48333-9065.

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 10-52, Farmington Hills, Michigan 48333-9065. In addition, investors
may exchange shares by sending a written request to their authorized broker
directly.

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

Fund 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 net asset value.
Redemption requests cannot be executed on days on which the New York Stock
Exchange is closed and federal holidays restricting wire transfers. Telephone or
written requests for redemptions 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.

CASH SWEEP PROGRAM. Clients of Michigan National Bank who have executed a Cash
Sweep Agreement should refer to that Agreement for information about redeeming
Fund shares purchased through that program.

REDEEMING BY CHECK. At the shareholder's request, Federated Shareholder Services
Company will establish a checking account for redeeming Prime Money Market Fund
Class A Shares, U.S. Treasury Money Market Fund, and Michigan Municipal Cash
Fund shares. For further information, contact a Michigan National Bank or
Independence One representative or authorized broker.

With a Fund checking account, shares may be redeemed simply by writing a check
for $250 or more. The redemption will be made at the net asset value on the date
that the transfer agent presents the check to the Fund. A check may not be
written to close an account. In addition, if a shareholder wishes to redeem
shares and have the proceeds available, a check may be written and negotiated
through the shareholder's local bank. Checks should never be sent to the
transfer agent to redeem shares. Cancelled checks are sent to the shareholder
each month. 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 broker
directly. Redemption requests must be received and transmitted to the transfer
agent before 11:00 a.m. (Eastern time) in order for the proceeds to be wired
that same day. 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 11:00 a.m. (Eastern time) proceeds will normally be
wired the same 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. For calls received after 11:00 a.m. (Eastern time) proceeds
will normally be wired or a check sent the following business day. In no event
will proceeds be wired or a check sent more than seven days after a proper
request for redemption has been received.

A daily dividend will be paid on shares redeemed if the redemption request is
received after 11:00 a.m. (Eastern time). However, the proceeds are normally not
wired until the following business day. Redemption requests received before
11:00 a.m. (Eastern time) will normally be paid the same day and will not be
entitled to that day's dividend.

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 Fund
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, if applicable, 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 10-52, 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 Fund, or a redemption payable other than to
the shareholder of record must have signatures on written redemption requests
guaranteed by:

. a trust company or a commercial bank whose deposits are insured by BIF,
which is administered by the 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
SAIF, 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 to the shareholder within one
business day, but in no event more than seven days after receipt of a proper
written redemption request.

SYSTEMATIC WITHDRAWAL PROGRAM

Shareholders of Prime Money Market Fund Class A Shares, U.S. Treasury Money
Market Fund, and Michigan Municipal Cash Fund who desire to receive payments of
a predetermined amount may take advantage of the Systematic Withdrawal Program.
Under this program, shares of the Fund 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 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,
other than retirement accounts subject to required minimum distributions. 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 a required minimum value of $1,000, (or $1,000,000
in the case of the Prime Money Market Fund Class B Shares), due to shareholder
redemptions. 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.

REDEMPTION IN KIND

The Funds are obligated to redeem shares solely in cash up to $250,000 or 1% of
the Fund's net asset value, whichever is less, for any one shareholder within a
90-day period.

Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Fund will pay all
or a portion of the remainder of the redemption in portfolio instruments, valued
in the same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving their securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur certain transaction costs.

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

VOTING RIGHTS

Each share of the Funds 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. As of June 5, 1998,
Pierson & Co., the nominee for Michigan National Bank and Oak Mall Shopping
Center may for certain purposes be deemed to control the Prime Money Market Fund
Class B Shares because they are owners of record of certain shares of the Fund.
As of June 5, 1998, Pierson & Co, the nominee for Michigan National Bank may for
certain purposes be deemed to control the Prime Money Market Fund Class A Shares
and U.S. Treasury Money Market Fund because it is owner of record of certain
shares of the Funds.

Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the Trust's outstanding
shares.

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 its 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.

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

FEDERAL INCOME TAX

The Funds intend to pay no federal income tax because each Fund expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies (including its diversification requirements) 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 Prime Money Market Fund and U.S.
Treasury Money Market Fund are required to pay federal income tax on any
dividends and other distributions received. These tax consequences apply whether
dividends and distributions are received in cash or as additional Shares. The
Funds will provide detailed tax information for reporting purposes. Shareholders
are urged to consult their own tax advisers regarding the status of their
accounts under state and local tax laws.

MICHIGAN MUNICIPAL CASH 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.

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, 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.

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, yield and effective
yield, and, in the case of the Michigan Municipal Cash Fund, tax-equivalent
yield.

The yield of a Fund represents the annualized rate of income earned on an
investment in the Fund over a seven-day period. It is the annualized dividends
earned during the period on the investment, shown as a percentage of the
investment. The effective yield is calculated similarly to the yield, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested daily. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The tax-
equivalent yield of the Michigan Municipal Cash Fund is calculated similarly to
the yield, but is adjusted to reflect the taxable yield that the Michigan
Municipal Cash Fund would have had to earn to equal its actual yield, assuming a
specific tax rate.

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

Total return, yield and effective yield will be calculated separately for Prime
Money Market Fund Class A Shares and Class B Shares. Expense differences between
Class A Shares and Class B Shares may affect the performance of each class.

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.

INDEPENDENCE ONE
MUTUAL FUNDS

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7010

INVESTMENT ADVISER
Michigan National Bank
27777 Inkster Road
Mail Code 10-52
Farmington Hills, Michigan 48333-9065

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
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

Cusip 453777203 Cusip 453777302 Cusip 453777708 Cusip 453777401 G01285-01
(6/98)

[RECYCLED LOGO]

Independence One(R)

Prime Money Market Fund
Class A Shares
Class B Shares
U.S. Treasury
Money Market Fund
Michigan Municipal
Cash Fund
(Distributed by Federated Securities Corp.)

Prospectus dated

June 30, 1998

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[LOGO OF MICHIGAN NATIONAL BANK Investment Adviser]

Independence One Prime Money Market Fund
Class A Shares
Class B Shares
Independence One U.S. Treasury Money Market Fund
Independence One Michigan Municipal Cash 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 Prime Money Market Fund, Independence One
U.S. Treasury Money Market Fund, and Independence One Michigan Municipal
Cash Fund (the "Funds"), portfolios of Independence One Mutual Funds (the
"Trust") dated June 30, 1998. This Statement is not a prospectus. You may
request a copy of a prospectus free of charge by calling 1-800-334-2292.

Independence One Mutual Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

Statement dated June 30, 1998

[GRAPHIC OMITTED]

Cusip 453777203
Cusip 453777302
Cusip 453777708
Cusip 453777401
G00979 -09 (6/98)

<PAGE>

I
Table of Contents

<PAGE>

General Information About the Funds 1

Investment Objective and Policies of the Funds 1
Types of Investments 1
Repurchase Agreements 3
When-Issued and Delayed Delivery Transactions 3
Reverse Repurchase Agreements 3
Credit Enhancement 3
Restricted and Illiquid Securities 3
Variable Rate Demand Notes 4
Investment Limitations 4
Regulatory Compliance 6

Michigan Municipal Cash Fund
Investment Risks 6

Independence One Mutual Funds Management 7
Officers and Trustees 7
Fund Ownership 9
Trustees' Compensation 9
Trustee Liability 10
Massachusetts Partnership Law 10

Investment Advisory Services 10
Adviser to the Funds 10
Advisory Fees 10

Brokerage Transactions 10

Other Services 11
Trust Administration 11
Custodian 11
Transfer Agent and Dividend Disbursing Agent 11
Independent Auditors 11

Purchasing Shares 11
Distribution Plan (U.S. Treasury Fund and
Michigan Municipal Cash Fund Only) 11
Shareholder Services Agreement
(Prime Money Market Fund Class A Shares Only) 12
Conversion to Federal Funds 12

Determining Net Asset Value 12
Use of the Amortized Cost Method 12

Exchange Privilege 13

Redeeming Shares 13
Redemption in Kind 13

Tax Status 14
The Funds' Tax Status 14
Shareholders' Tax Status 14

Total Return 14

Yield 14

Effective Yield 15

Tax-Equivalent Yield 15
Tax-Equivalency Table 15

Performance Comparisons 17
Economic and Market Information 17

Financial Statements 17

Appendix 18

<PAGE>

General Information About the Funds

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
Prime Money Market Fund ("Prime Money Market Fund"), Independence One U.S.
Treasury Fund ("U.S. Treasury Fund"), and Independence One Michigan Municipal
Cash Fund ("Michigan Municipal Cash Fund").

Shares of the Prime Money Market Fund are currently offered in two classes:
Class A Shares and Class B Shares. Prior to May 1, 1995, the Prime Money Market
Fund offered a single class of shares, which are currently designated as Class A
Shares.

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 the
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.

Types of Investments

Bank Instruments

The Prime Money Market Fund may invest in instruments of domestic and
foreign banks and other deposit institutions.

The instruments of banks and savings associations that are insured by the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF") such as certificates of deposit, demand and time deposits,
savings shares, and bankers' acceptances, are not necessarily guaranteed
by those organizations.

In addition to domestic bank obligations such as certificates of deposit,
demand and time deposits, savings shares, and bankers' acceptances, the
Prime Money Market Fund may invest in:

o Eurodollar Certificates of Deposit issued by foreign branches of U.S.
or foreign banks;

o Eurodollar Time Deposits, which are U.S. dollar-denominated deposits
in foreign branches of U.S. or foreign banks;

o Canadian Time Deposits, which are U.S. dollar-denominated deposits
issued by branches of major Canadian banks located in the United
States; and

o Yankee Certificates of Deposit, which are U.S. dollar-denominated
certificates of deposit issued by U.S. branches of foreign banks and
held in the United States.

Ratings

A nationally recognized statistical rating organization's ("NRSRO") rating
categories are determined without regard for sub-categories and
gradations. For example, with respect to the Prime Money Market Fund,
securities rated A-1 or A-1+ by Standard & Poor's Ratings Group ("S&P"),
Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -) by
Fitch Investors Service, Inc. ("Fitch"), are all considered rated in the
highest short-term rating category, and with respect to the Michigan
Municipal Cash Fund, securities rated SP-1+, SP-1 or SP-2 by S&P, MIG-1 or
MIG-2 by Moody's, or F-1+, F-1 and F-2 by Fitch, are all considered rated
in one of the two highest short-term rating categories. The Funds will
follow applicable regulations in determining whether a security rated by
more than one NRSRO can be treated as being in the acceptable rating
categories; currently, such securities must be rated by two NRSROs in the
acceptable categories. See "Regulatory Compliance."

If a security loses its rating or the security's rating is reduced below
the required minimum after a Fund purchases it, a Fund is not required to
sell the security. The investment adviser considers this event, however,
in its determination of whether a Fund should continue to hold the
security in its portfolio. If ratings made by a NRSRO change because of
changes in those organizations or in their rating systems, the Fund will
try to use comparable ratings as standards in accordance with the
investment policies described in the Funds' prospectuses.

U.S. Government Obligations

The types of U.S. government obligations in which Prime Money Market Fund
may invest generally include direct obligations of the U.S. Treasury (such
as U.S. Treasury bills, notes, and bonds) and obligations issued or
guaranteed by U.S. government agencies or instrumentalities. These
securities are backed by:

o the full faith and credit of the U.S. Treasury;

o the issuer's right to borrow from the U.S. Treasury;

o the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or

o the credit of the agency or instrumentality issuing the obligations.

Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are: Farm Credit Banks;
National Bank for Cooperatives; Banks for Cooperatives; Federal Home Loan
Banks; Federal National Mortgage Association; Student Loan Marketing
Association; and Federal Home Loan Mortgage Corporation.

U.S. Treasury Obligations

U.S. Treasury Money Market Fund invests only in short-term U.S. Treasury
obligations. "Short-term U.S. Treasury obligations" as used herein refers
to evidences of indebtedness issued by the United States, or issued by an
agency or instrumentality thereof, and fully guaranteed as to principal
and interest by the United States, maturing in 397 days or less from the
date of acquisition or purchased pursuant to repurchase agreements that
provide for repurchase by the seller within one year from the date of
acquisition. The Fund may also retain assets in cash.

Michigan Municipal Securities

The Michigan municipal securities in which Michigan Municipal Cash Fund
invests have the characteristics set forth in the prospectus.

A Michigan municipal security which is unrated will be determined by the
Trustees to be an appropriate investment if it is of comparable quality to
municipal securities within the Fund's rating requirements. The Trustees
consider the creditworthiness of the issuer of a Michigan municipal
security, the issuer of a participation interest if the Fund has the right
to demand payment from the issuer of the interest or the guarantor of
payment by either of those issuers.

Examples of Michigan municipal securities are:

o tax-exempt project notes issued by the U.S. Department of Housing and
Urban Development to provide financing for housing, redevelopment, and
urban renewal;

o municipal notes and tax-exempt commercial paper;

o serial bonds sold with a series of maturity dates;

o tax anticipation notes sold to finance working capital needs of
municipalities in anticipation of receiving taxes at a later date;

o bond anticipation notes sold in anticipation of the issuance of
longer-term bonds in the future;

o revenue anticipation notes sold in expectation of receipt of federal
income available under the Federal Revenue Sharing Program;

o construction loan notes insured by the Federal Housing Administration
and financed by the Federal or Government National Mortgage
Association; and

o pre-refunded municipal bonds refundable at a later date.

From time to time, such as when suitable Michigan municipal securities are
not available, the 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 securities and thereby reduce the Fund's
yield.

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 a
Fund, the Fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund 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 brokers/dealers which are deemed by the Funds' investment
adviser to be creditworthy pursuant to guidelines established by the Trustees.

Michigan Municipal Cash Fund will use repurchase agreements only as temporary
investments during times of unusual market conditions for defensive purposes and
to maintain liquidity.

When-Issued and Delayed Delivery Transactions

These transactions are made to secure what is considered to be an advantageous
price or yield for a Fund. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of a Fund sufficient to
make payment for the securities to be purchased are segregated on the Fund's
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled.

The Funds do not intend to engage in when-issued and delayed delivery
transactions to an extent that would cause the segregation of more than 20% of
the total value of Fund assets.

Reverse Repurchase Agreements

The Funds may enter into reverse repurchase agreements. This transaction is
similar to borrowing cash. In a reverse repurchase agreement the 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.

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.

The use of reverse repurchase agreements may enable the Funds 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 Funds will be able to avoid selling portfolio instruments at a
disadvantageous time.

Credit Enhancement

Prime Money Market Fund and Michigan Municipal Cash Fund typically evaluate the
credit quality and ratings of credit-enhanced securities based upon the
financial condition and ratings of the party providing the credit enhancement
(the "credit enhancer"), rather than the issuer. Generally, a Fund will not
treat credit-enhanced securities as being issued by the credit enhancer for
diversification purposes. However, under certain circumstances applicable
regulations may require a Fund to treat securities as having been issued by both
the issuer and the credit enhancer. However, credit-enhanced securities will not
be treated as having been issued by the credit enhancer for diversification
purposes, unless the Funds have invested more than 10% of their respective
assets in securities issued, guaranteed or otherwise credit enhanced by the
credit enhancer, in which case the securities will be treated as having been
issued by both the issuer and the credit enhancer.

The Funds may have more than 25% of their respective total assets invested in
securities credit enhanced by banks.

Restricted and Illiquid Securities

Prime Money Market Fund and Michigan Municipal Cash Fund may invest in
restricted securities. All of the Funds may invest in illiquid securities. The
ability of the Trustees to determine the liquidity of certain restricted
securities is permitted under the Securities and Exchange Commission ("SEC")
Staff position set forth in the adopting release for Rule 144A under the
Securities Act of 1933 (the "Rule"). The Rule is a non-exclusive safe harbor for
certain secondary market transactions involving securities subject to
restrictions on resale under federal securities laws. The Rule provides an
exemption from registration for resales of otherwise restricted securities to
qualified institutional buyers. The Rule was expected to further enhance the
liquidity of the secondary market for securities eligible for resale under Rule
144A. The Fund believes that the Staff of the SEC has left the question of
determining the liquidity of all restricted securities (eligible for resale
under Rule 144A) to the Trustees. The Trustees consider the following criteria
in determining the liquidity of certain restricted securities:

o the frequency of trades and quotes for the securities;

o the number of dealers willing to purchase or sell the security and the
number of other potential buyers;

o dealer undertakings to make a market in the security; and

o the nature of the security and the nature of the marketplace trades.

Variable Rate Demand Notes

Prime Money Market Fund and Michigan Municipal Cash Fund may invest in variable
rate demand notes. 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 securities than for fixed
income obligations.

Many securities with variable interest rates purchased by the Fund are subject
to repayment of principal (usually within seven days) on the Fund's demand. For
purposes of determining the Fund's average maturity, the maturities of these
variable rate demand securities (including participation interests) are the
longer of the periods remaining until the next readjustment of their interest
rates or the periods remaining until their principal amounts can be recovered by
exercising the right to demand payment. 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.

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.
Issuing Senior Securities and Borrowing Money

The Funds will not issue senior securities except that the Funds may
borrow money and engage in reverse repurchase agreements in amounts up to
one-third of the value of their respective net assets, including the
amounts borrowed.

The Funds will not borrow money or engage in reverse repurchase agreements
for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of the portfolio by enabling
the Funds to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Funds will
not purchase any securities while borrowings in excess of 5% of their
respective total assets are outstanding.

Pledging Assets

The Funds will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In these cases, a Fund may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 10% of the value of total assets at the time of the pledge.

Underwriting

Prime Money Market Fund and Michigan Municipal Cash Fund will not
underwrite any issue of securities, except as a Fund may be deemed to be
an underwriter under the Securities Act of 1933 in connection with the
sale of securities in accordance with its investment objective, policies,
and limitations.

Lending Cash or Securities

Prime Money Market Fund will not lend any of its assets, except that it
may purchase or hold money market instruments, including repurchase
agreements and variable amount demand master notes, in accordance with its
investment objective, policies, and limitations.

U.S. Treasury Money Market Fund will not lend any of its assets, except
that it may purchase or hold U.S. Treasury obligations, including
repurchase agreements, in accordance with its investment objective,
policies, and limitations.

Michigan Municipal Cash Fund will not lend of its assets, except that it
may acquire publicly or nonpublicly issued municipal securities or
temporary investments or enter into repurchase agreements in accordance
with its investment objective, policies, and limitations.

Investing in Commodities, Commodity Contracts, or Commodity Futures Contracts

Prime Money Market Fund and Michigan Municipal Cash Fund will not purchase
or sell commodities, commodity contracts, or commodity futures contracts.

Investing in Real Estate

Prime Money Market Fund and Michigan Municipal Cash Fund will not purchase
or sell real estate, although they 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.

Investing in Restricted Securities

Prime Money Market Fund will not invest more than 10% of its net assets in
securities subject to restrictions on resale under the federal securities
laws, except for Section 4(2) commercial paper.

Michigan Municipal Cash Fund will not invest more than 10% of the value of
its net assets in securities subject to restrictions on resale under the
Securities Act of 1933.

Diversification of Investments

With respect to 75% of the value of its assets, Prime Money Market 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.

Michigan Municipal Cash Fund will not invest more than 10% of its total
assets in the securities of any one issuer (except cash and cash items,
repurchase agreements collateralized by U.S. government securities and
U.S. government obligations) with respect to securities comprising 75% of
its assets.

Under this limitation each governmental subdivision, including states and
the District of Columbia, territories, possessions of the United States,
or their political subdivisions, agencies, authorities, instrumentalities,
or similar entities, will be considered a separate issuer if its assets
and revenues are separate from those of the governmental body creating it
and the security is backed only by its own assets and revenues.

Industrial development bonds, backed only by the assets and revenues of a
nongovernmental user, are considered to be issued solely by that user. If
in the case of an industrial development bond or governmental-issued
security, a governmental or other entity guarantees the security, such
guarantee would be considered a separate security issued by the guarantor
as well as the other issuer, subject to limited exclusions allowed by the
Investment Company Act of 1940.

Concentration of Investments

Prime Money Market Fund will not invest 25% or more of the value of its
total assets in any one industry.

However, investing in bank instruments (such as time and demand deposits
and certificates of deposit), U.S. government obligations or instruments
secured by these money market instruments, such as repurchase agreements,
shall not be considered investments in any one industry.

The above investment limitations cannot be changed without approval of
shareholders. 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.

Investing in Securities of Other Investment Companies

Prime Money Market Fund and Michigan Municipal Cash Fund can acquire up
to 3 per centum of the total outstanding stock of other investment
companies, and may invest in the securities of affiliated money market
funds as an efficient means of managing the Funds' uninvested cash. 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 other investment company's shares does not
include a sales charge exceeding 1-1/2 percent. However, these limitations
are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be
noted that investment companies incur certain expenses, such as investment
advisory, custodian and transfer agent fees, and therefore, any investment
by the Fund in shares of another investment company would be subject to
such duplicate expenses.

U.S. Treasury Money Market Fund will not purchase securities of other
investment companies except as part of a merger, consolidation,
reorganization, or other acquisition.

Investing in Illiquid Securities

The Funds will not invest more than 10% of the value of their respective
net assets in illiquid securities, including repurchase agreements
providing for settlement in more than seven days after notice, certain
restricted securities not determined by the Trustees to be liquid, and
non-negotiable fixed time deposits with maturities over seven days.

Dealing in Puts and Calls

Michigan Municipal Cash Fund will not purchase or sell puts, calls,
straddles, spreads, or any combination of them, except that the Fund may
purchase municipal securities accompanied by agreements of sellers to
repurchase them at the Fund's option.

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, invest in illiquid
securities, restricted securities, or engage in when-issued and delayed delivery
transactions or reverse 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."

Regulatory Compliance

Each Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, each Fund will comply
with the various requirements of Rule 2a-7, which regulates money market mutual
funds. For example, with limited exceptions, Rule 2a-7 prohibits the investment
of more than 5% of a Fund's total assets in securities of any one issuer,
although a Fund's limitation may only require such 5% diversification with
respect to 75% or less of its assets. Each Fund will invest more than 5% of its
assets in any one issuer only under the circumstances permitted by Rule 2a-7.
Each Fund will also determine the effective maturity of its investments, as well
as its ability to consider a security as having received the requisite
short-term ratings by NRSROs, according to Rule 2a-7. The Funds may change these
operational policies to reflect changes in the laws and regulations without the
approval of shareholders.

Michigan Municipal Cash 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 comprises 23% of the total jobs in the state,
relative to 17% nationally, it comprises a lesser share than in the 1970s when
it was 35%. The automobile industry has reduced its share of employment to 6.9%
of total employment, compared with 10.8% in 1979. In fact, Michigan's economy
continues to shift away from durable goods manufacturing to a more diversified
base reliant on services and trade. This shift to jobs in service and trade
industries has, however, resulted in declines in per capita income relative to
the nation.

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 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
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 1996, the Budget Stabilization Fund reached an
historically high level of $1.1 billion, with a continuation of this position
currently projected for the year ending September 30, 1997.

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, Inc.,
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*
Berry Enterprises
290 Franklin Center
29100 Northwestern Highway

Southfield, MI

Birthdate: September 17, 1925

Trustee

Managing Partner, Berry Enterprises; Chairman, Independent Sprinkler Companies,
Inc.; Chairman, Berry, Ziegelman & Company.

Nathan Forbes**
1945 Long Point Drive
Bloomfield Hills, MI
Birthdate: December 5, 1962
Trustee
President, Forbes/Cohen Properties; President and Partner,
The Forbes Company.

<PAGE>

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

Trustee

Chairman, Nederlander Enterprises.

Thomas S. Wilson+
Two Championship Drive
Auburn Hills, MI
Birthdate: October 8, 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, Federated Investors, Inc.; 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.

<PAGE>

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

Secretary

Corporate Counsel, Federated Investors, Inc.

* Members of the Trust's Audit Committee.

** This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.

+ 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 June 5, 1998: Pierson & Co., the nominee for Michigan National Bank,
acting in various capacities for numerous accounts, was the record owner of
152,511,923 Class A Shares (36.19%) of Prime Money Market Fund, 27,178,016 Class
B Shares (33.04%) of Prime Money Market Fund, 107,060,482 shares (38.67%) of
Treasury Money Market Fund and 22,322,384 shares (21.52%) of Michigan Municipal
Cash Fund. As of June 5, 1998, Oak Mall Shopping Center owned 30,993,490 shares
(37.68%) of Class B Shares of Prime Money Market Fund and 5,733,888 shares
(5.53%) of Michigan Municipal Cash Fund. As of June 5, 1998, South Side
Landfill, Inc. owned 8,168,077 shares (9.93%) and Trendway Corporation owned
5,100,943 shares (6.20%) of Class B Shares of Prime Money Market Fund. As of
June 5, 1998, United American Health Care owned 6,266,443 shares (6.04%) and
Christman Company owned 5,654,999 shares (5.45%) of Michigan Municipal Cash
Fund.

Trustees' Compensation

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

Robert E. Baker $12,000
Trustee
Harold Berry $12,000
Trustee
Nathan Forbes $0+
Trustee
Harry J. Nederlander $12,000
Trustee
Thomas S. Wilson $12,000
Trustee

*Information is furnished for the fiscal year ended April 30, 1998. 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.

+Information is furnished for the period from March 4, 1998 (date of election as
Trustee of the Trust) through April 30, 1998.

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 to the Funds

The Fund's investment adviser is Michigan National Bank (the "Adviser").

The 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 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 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, 1998, 1997, and 1996, the Adviser earned
fees from: Prime Money Market Fund of $1,861,933, $1,720,845, and $1,424,895, of
which $1,163,708, $1,075,528, and $890,559, respectively, were voluntarily
waived; U.S. Treasury Money Market Fund of $1,062,526, $1,099,098, and
$1,093,871, none of which were voluntarily waived; and Michigan Municipal Cash
Fund of $375,284, $355,606, and $288,247, of which $146,672, $167,803, and
$144,124, respectively, were voluntarily waived.

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

Custodian

Michigan National Bank, Farmington Hills, Michigan, is custodian for the
securities and cash of the Funds. For its services as custodian, Michigan
National Bank receives an annual fee, payable monthly, based on a percentage of
each Fund's average aggregate daily net assets and the number and type of
transactions, plus 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 which
the New York Stock Exchange is open for business, except on federal holidays
restricting wire transfers. The procedure for purchasing shares of the Funds is
explained in the prospectus under "Investing in the Funds."

Distribution Plan (U.S. Treasury Fund and Michigan Municipal Cash Fund Only)

The Trust has adopted a Plan pursuant to Rule 12b-1 which was promulgated by the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940 (the "Plan"). The Plan provides for payment of fees to Federated Securities
Corp. to finance any activity which is principally intended to result in the
sale of the Funds' shares subject to the Plan. Such activities may include the
advertising and marketing of shares; preparing, printing, and distributing
prospectuses and sales literature to prospective shareholders, brokers, or
administrators; and implementing and operating the Plan. Pursuant to the Plan,
Federated Securities Corp. may pay fees to brokers for distribution and
administrative services and to administrators for administrative services as to
shareholders. The administrative services are provided by a representative who
has knowledge of the shareholder's particular circumstances and goals, and
include, but are not limited to: communicating account openings; communicating
account closings; entering purchase transactions; entering redemption
transactions; providing or arranging to provide accounting support for all
transactions, wiring funds and receiving funds for share purchases and
redemptions, confirming and reconciling all transactions, reviewing the activity
in Fund accounts, and providing training and supervision of broker personnel;
posting and reinvesting dividends to Fund accounts or arranging for this service
to be performed by the Funds' transfer agent; and maintaining and distributing
current copies of prospectuses and shareholder reports to the beneficial owners
of shares and prospective shareholders.

The Board of Trustees expects that the Plan will result in the sale of a
sufficient number of shares so as to allow the Funds to achieve economic
viability. It is also anticipated that an increase in the size of each Fund will
facilitate more efficient portfolio management and assist each Fund in seeking
to achieve its investment objective.

The Funds are not currently paying any 12b-1 fees under the Plan. Should the
Funds begin to pay these fees, shareholders would be notified.

Shareholder Services Agreement (Prime Money Market Fund Class A Shares Only)

This arrangement permits the payment of fees to Michigan National Bank and other
financial institutions to cause services to be provided which are necessary for
the maintenance of shareholder accounts and to encourage personal services to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may include,
but are not limited to: providing office space, equipment, telephone facilities,
and various clerical, supervisory, computer and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of a
client's account cash balance; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses. By
adopting the Shareholder Services Agreement on behalf of Class A Shares, the
Board of Trustees expects that the Class A Shares will benefit by: (1) providing
personal services to shareholders; (2) investing shareholder assets with a
minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests and
inquiries concerning their accounts.

For the fiscal year ended April 30, 1998, Prime Money Market Fund (Class A
Shares) paid $910,356 in shareholder services fees.

Conversion to Federal Funds

It is the Funds' 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. Federated Shareholder Services
Company acts as the shareholder's agent in depositing checks and converting them
to federal funds.

Determining Net Asset Value

The Funds attempt to stabilize the value of a share at $1.00. The days on which
net asset value is calculated by the Funds are described in the prospectus.

Use of the Amortized Cost Method

The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.

The Funds' use of the amortized cost method of valuing portfolio instruments
depends on its compliance with Rule 2a-7, (the "Rule"), under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Fund's investment objective.

Under the Rule, a Fund is permitted to purchase instruments which are subject to
demand features or standby commitments. As defined by the Rule, a demand feature
entitles the Fund to receive the principal amount of the instrument from the
issuer or a third party on (1) no more than 30 days' notice or (2) at specified
intervals not exceeding one year on no more than 30 days' notice. A standby
commitment entitles the Fund to achieve same day settlement and to receive an
exercise price equal to the amortized cost of the underlying instrument plus
accrued interest at the time of exercise.

Although demand features and standby commitments are defined as "puts" under the
Rule, Prime Money Market Fund and Michigan Municipal Cash Fund do not consider
them to be "puts" as that term is used in the Funds' investment limitations.
Demand features and standby commitments are features which enhance an
instrument's liquidity, and the investment limitation which proscribes puts is
designed to prohibit the purchase and sale of put and call options and is not
designed to prohibit a Fund from using techniques which enhance the liquidity of
portfolio instruments.

Monitoring Procedures

The Trustees' procedures include monitoring the relationship between the
amortized cost value per share and the net asset value per share based
upon available indications of market value. The Trustees will decide what,
if any, steps should be taken if there is a difference of more than .50%
between the two values. The Trustees will take any steps they consider
appropriate (such as redemption in kind or shortening the average
portfolio maturity) to minimize any material dilution or other unfair
results arising from differences between the two methods of determining
net asset value.

Investment Restrictions

The Rule requires that each Fund limit its investments to instruments
that, in the opinion of the Trustees, present minimal credit risks, and
have received the requisite rating from one or more nationally recognized
statistical rating organizations. If the instruments are not rated, the
Trustees must determine that they are of comparable quality. The Rule also
requires each Fund to maintain a dollar-weighted average portfolio
maturity (not more than 90 days) appropriate to the objective of
maintaining a stable net asset value of $1.00 per share. In addition, no
instrument with a remaining maturity of more than 397 days can be
purchased by a Fund.

Should the disposition of a portfolio security result in a dollar-weighted
average portfolio maturity of more than 90 days, the Fund will invest its
available cash to reduce the average maturity to 90 days or less as soon as
possible.

The Funds may attempt to increase yield by trading portfolio securities to take
advantage of short-term market variations. This policy may, from time to time,
result in high portfolio turnover. Under the amortized cost method of valuation,
neither the amount of daily income nor the net asset value is affected by any
unrealized appreciation or depreciation of the portfolio.

In periods of declining interest rates, the indicated daily yield on shares,
computed by dividing the annualized daily income on the Fund's portfolio by the
net asset value computed as above, may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates.

In periods of rising interest rates, the indicated daily yield on shares,
computed the same way may tend to be lower than a similar computation made by
using a method of calculation based upon market prices and estimates.

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 Fund's portfolio. 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 a Fund is obligated to redeem shares for any one shareholder
in cash only up to the lesser of $250,000 or 1% of the 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 invest in securities within certain statutory limits; and

o distribute to its shareholders at least 90% of its net income earned
during the year.

Shareholders' Tax Status

No portion of any income dividend paid by a Fund is eligible for the dividends
received deduction available to corporations. Any short-term capital gains are
taxable as ordinary income.

Total Return

The average annual total returns for the 1-year and 5-year periods ended
April 30, 1998 and the period from June 1, 1989 (date of initial public
investment) to April 30, 1998 for Prime Money Market Fund-Class A Shares and
U.S. Treasury Money Market Fund were 5.20%, 4.57%, 5.18%, and 5.03%, 4.45%
5.04%, respectively. The average annual total returns for Prime Money Market
Fund-Class B Shares for the 1-year period ended April 30, 1998 and the period
from June 13, 1995 (date of initial public investment) to April 30, 1998 were
5.46% and 5.42%, respectively. The average annual total returns for the 1-year
and 5-year periods ended April 30, 1998 and the period from June 14, 1989 (date
of initial public investment) to April 30, 1998 for Michigan Municipal Cash Fund
were 3.24%, 2.86%, and 3.42%, respectively.

The average annual total return for the Fund 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 net asset value 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.

Advertisements and other sales literature for either class of shares may refer
to total return. Total return is the historic change in the value of an
investment in either class of shares based on the monthly reinvestment of
dividends over a specified period of time.

Yield

For the period ended April 30, 1998, the seven-day yields for Class A Shares
and Class B Shares of Prime Money Market Fund were 5.03% and 5.28%,
respectively.

For the period ended April 30, 1998, the seven-day yield for U.S. Treasury Money
Market Fund was 4.91%. For the period ended April 30, 1998, the seven-day yield
for Michigan Municipal Cash Fund was 3.40%.

<PAGE>

The Funds calculate yield daily, based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:

o determining the net change in the value of a hypothetical account with
a balance of one share at the beginning of the base period, with the
net change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares;

o dividing the net change in the account's value by the value of the
account at the beginning of the base period to determine the base
period return; and

o multiplying the base period return by (365/7).

To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in a Fund,
the performance will be reduced for those shareholders paying those fees.

Effective Yield

For the period ended April 30, 1998, the seven-day effective yields for Class
A Shares and Class B Shares of Prime Money Market Fund were 5.15% and 5.42%,
respectively.

For the period ended April 30, 1998, the seven-day effective yield for U. S.
Treasury Money Market Fund was 5.03%. For the period ended April 30, 1998, the
seven-day effective yield for Michigan Municipal Cash Fund was 3.46%. The
Funds' effective yield is computed by compounding the unannualized base period
return by:

o adding 1 to the base period return;

o raising the sum to the 365/7th power; and

o subtracting 1 from the result.

Tax-Equivalent Yield

Michigan Municipal Cash Fund's tax-equivalent yield for the seven-day period
ended April 30, 1998, was 5.03%, assuming an effective tax rate of 32.40%.

The tax-equivalent yield of the 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.

Tax-Equivalency Table

Michigan Municipal Cash 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.

<PAGE>

TAXABLE YIELD EQUIVALENT FOR 1998
STATE OF MICHIGAN
COMBINED FEDERAL AND STATE INCOME TAX BRACKET:
19.40% 32.40% 35.40% 40.40% 44.00%

JOINT $1- $42,351- $102,301- $155,951- OVER

RETURN 42,350 102,300 155,950 278,450 $278,450

SINGLE $1- $25,351- $61,401- $128,101- OVER

RETURN 25,350 61,400 128,100 278,450 $278,450

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%

* Some portion of Michigan Municipal Cash Fund's income may be subject to the
federal alternative minimum tax and state and local taxes.

The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of the Michigan Municipal Cash Fund.

<PAGE>

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 on money market instruments;

o changes in Fund expenses; and

o the relative amount of Fund cash flow.

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:

o Lipper Analytical Services, Inc., ranks funds in various fund
categories by making comparative calculations using total return. Total
return assumes the reinvestment of all income dividends and capital
gains distributions, if any. From time to time, a Fund will quote its
ranking in its respective Lipper category in advertising and sales
literature.

o Money, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day compound
(effective) yield. From time to time, a Fund will quote its Money
ranking in advertising and sales literature.

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, and may refer to the Funds'
participation in asset allocation or other investment programs. 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,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $4.4 trillion to the more than 6,700 funds available.

Financial Statements

The Financial Statements for the fiscal year ended April 30, 1998 are
incorporated herein by reference to the Annual Report of the Funds dated April
30, 1998 (File Nos. 33-26516 and 811-5752). A copy of the Funds' Annual Report
may be obtained without charge by contacting the Trust.

<PAGE>

Appendix

Standard and Poor's 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 IBCA, 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 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 IBCA, 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 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.

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

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 June 30,
1998, with the Securities and Exchange Commission ("SEC"). 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.

Prospectus dated June 30, 1998

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

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

SUMMARY OF FUND EXPENSES 2
- -------------------------------------

FINANCIAL HIGHLIGHTS 3
- -------------------------------------

INVESTMENT INFORMATION 6
- -------------------------------------

Investment Objective of Each Fund 6

Government Securities Fund 6

Fixed Income Fund 7

Michigan Municipal Bond Fund 13

PORTFOLIO INVESTMENTS AND
STRATEGIES 16
- -------------------------------------

Investment Limitations 17

INDEPENDENCE ONE MUTUAL FUNDS
INFORMATION 18
- -------------------------------------

Management of the Trust 18

Distribution of Shares 19

Administration of the Funds 19

Year 2000 Statement 19

NET ASSET VALUE 20
- -------------------------------------

INVESTING IN THE FUNDS 20
- -------------------------------------

Share Purchases 20

Minimum Investment Required 21

What Shares Cost 21

Confirmations and Account
Statements 21

Dividends and Capital Gains 21

Systematic Investment Program 21

Exchanging Securities for Fund
Shares 21

EXCHANGE PRIVILEGE 22
- -------------------------------------

REDEEMING SHARES 23
- -------------------------------------

Systematic Withdrawal Program 25

Accounts with Low Balances 25

SHAREHOLDER INFORMATION 25
- -------------------------------------

Voting Rights 25

EFFECT OF BANKING LAWS 26
- -------------------------------------

TAX INFORMATION 26
- -------------------------------------

Federal Income Tax 26

Michigan Municipal Bond Fund Tax
Considerations 27

PERFORMANCE INFORMATION 27
- -------------------------------------

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

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

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
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees (after waiver) (1)...... 0.25% 0.25% 0.25%
12b-1 Fees.............................. None None None
Total Other Expenses (after waiver) (2). 0.36% 0.31% 0.73%
Total Fund Operating Expenses (after
waivers) (3)........................ 0.61% 0.56% 0.98%
</TABLE>

(1) The management fees for Government Securities Fund, Fixed Income Fund and
Michigan Municipal Bond Fund have been reduced to reflect the anticipated
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 Municipal Bond Fund is 0.75%.

(2) Total Other Expenses for the 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 Michigan Municipal Bond Fund are based
on expenses expected to be incurred during the fiscal year ended April 30,
1999, and are expected to be 1.57% absent the voluntary waivers described in
Notes 1 and 2 above. During the course of this period, expenses may be more
or less than the amounts shown. The Total Fund Operating Expenses for
Government Securites Fund and Fixed Income Fund for the fiscal year ended
April 30, 1998, were 0.61% and 0.56% respectively, and would have been 1.06%
and 1.06% respectively, absent the voluntary waivers of the management fee.
The Total Fund Operating Expenses for the Michigan Municipal Bond Fund for
the fiscal year ended April 30, 1998 were 0.81% and would have been 1.53%
absent the voluntary waivers of the management fee and administrative fee.

EXAMPLE

You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.

<TABLE>
<CAPTION>
MICHIGAN
GOVERNMENT FIXED INCOME MUNICIPAL
SECURITIES FUND FUND BOND FUND
--------------- ------------ ---------
<S> <C> <C> <C>
1 Year................................... $ 6 $ 6 $ 10
3 Years.................................. $20 $18 $ 31
5 Years.................................. $34 $31 $ 54
10 Years................................. $76 $70 $120
</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 12, 1998, on the Fund's Financial
Statements for the year ended April 30, 1998, and on the following table for
each of the periods presented, is included in the Fund's Combined 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 Combined Annual Report, which may be obtained from the Fund.

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------------------------------
1998 1997 1996 1995 1994 1993(A)
- ----------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 9.98 $9.98 $9.79 $9.84 $10.31 $10.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.58 0.59 0.59 0.60 0.55 0.33
- -----------------------
Net realized and
unrealized gain (loss)
on investments 0.43 0.01 0.19 (0.05) (0.47) 0.31
- ----------------------- ------- ------- ------- ------- ------- -------
Total from investment
operations 1.01 0.60 0.78 0.55 0.08 0.64
- ----------------------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.58) (0.59) (0.59) (0.60) (0.55) (0.33)
- -----------------------
Distributions from net
realized gain on
investments -- (0.01) -- -- -- --
- ----------------------- ------- ------- ------- ------- ------- -------
Total distributions (0.58) (0.60) (0.59) (0.60) (0.55) (0.33)
- ----------------------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD $10.41 $9.98 $9.98 $9.79 $ 9.84 $10.31
- ----------------------- ------- ------- ------- ------- ------- -------
TOTAL RETURN (B) 10.37% 6.15% 7.97% 5.90% 0.66% 4.61%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.61% 0.57% 0.40% 0.35% 0.31% 0.17%*
- -----------------------
Net investment income 5.67% 5.82% 5.85% 6.23% 5.32% 5.59%*
- -----------------------
Expense waiver (c) 0.45% 0.45% 0.66% 0.70% 0.70% 0.83%*
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $70,867 $71,883 $72,291 $62,514 $72,866 $87,704
- -----------------------
Portfolio turnover 28% 73% 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.

Further information about U.S. Government Securities Fund's performance is
contained in the Combined Annual Report for the fiscal year ended April 30,
1998, which can be obtained free of charge.

INDEPENDENCE ONE FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------
1998 1997 1996(A)
- ------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.80 $9.82 $10.00
- -------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------
Net investment income 0.59 0.57 0.30
- -------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.23 (0.02) (0.18)
- ------------------------------------------- ------- ------- -------
Total from investment operations 0.82 0.55 0.12
- ------------------------------------------- ------- ------- -------
LESS DISTRIBUTIONS
- -------------------------------------------
Distributions from net investment income (0.59) (0.57) (0.30)
- -------------------------------------------
Distributions from net realized gain on
investments -- 0.00(b) --
- ------------------------------------------- ------- ------- -------
Total distributions (0.59) (0.57) (0.30)
- ------------------------------------------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $10.03 $9.80 $ 9.82
- ------------------------------------------- ------- ------- -------
TOTAL RETURN (C) 8.56% 5.79% 1.15%
- -------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------
Expenses 0.56% 0.55% 0.54%*
- -------------------------------------------
Net investment income 5.92% 5.83% 5.73%*
- -------------------------------------------
Expense waiver/reimbursement (d) 0.50% 0.50% 0.61%*
- -------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------
Net assets, end of period (000 omitted) $80,342 $70,884 $62,256
- -------------------------------------------
Portfolio turnover 21% 23% 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) Distribution from net realized gain on investments was less than one cent
per share.

(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about Fixed Income Fund's performance is contained in the
Combined Annual Report for the fiscal year ended April 30, 1998, which can be
obtained free of charge.

INDEPENDENCE ONE MICHIGAN MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------
1998 1997 1996(A)
- ------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.99 $9.95 $10.00
- -------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------
Net investment income 0.42 0.41 0.17
- -------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.31 0.04 (0.05)
- ------------------------------------------- ------- ------- -------
Total from investment operations 0.73 0.45 0.12
- ------------------------------------------- ------- ------- -------
LESS DISTRIBUTIONS
- -------------------------------------------
Distributions from net investment income (0.42) (0.41) (0.17)
- -------------------------------------------
Distributions from net realized gain on
investments -- 0.00(b) --
- ------------------------------------------- ------- ------- -------
Total distributions (0.42) (0.41) (0.17)
- ------------------------------------------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $10.30 $9.99 $ 9.95
- ------------------------------------------- ------- ------- -------
TOTAL RETURN (C) 7.38% 4.62% 1.21%
- -------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------
Expenses 0.81% 0.70% 0.57%*
- -------------------------------------------
Net investment income 4.07% 4.12% 3.83%*
- -------------------------------------------
Expense waiver (d) 0.72% 0.94% 0.76%*
- -------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------
Net assets, end of period (000 omitted) $21,027 $23,483 $25,123
- -------------------------------------------
Portfolio turnover 11% 48% 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) Distribution from net realized gain on investments was less than one cent
per share.

(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

Further information about Michigan Municipal Bond Fund's performance is
contained in the Combined Annual Report for the fiscal year ended April 30,
1998, which can be obtained free of charge.

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

INVESTMENT OBJECTIVE OF EACH FUND

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

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;

. notes, bonds and discount notes issued or guaranteed by U.S. government
agencies and instrumentalities supported by the full faith and credit of
the United States;

. notes, bonds and discount notes of U.S. government agencies or
instrumentalities which receive or have access to federal funding; and

. notes, bonds and discount notes of other U.S. government
instrumentalities supported only by the credit of the instrumentalities.

Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government 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 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 ("S&P"), or Fitch IBCA, 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 3 and 8 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 may extend 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 may shorten 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 may attempt to improve
the Fund's total return by weighing the relative value of fixed income
securities issues having similar maturities in selecting portfolio securities.

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 can invest 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 a nationally recognized statistical rating organization ("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
an 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 would use 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.

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 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.

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.

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.

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.

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. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be noted that
investment companies incur certain expenses, such as management fees, and
therefore, any investment by the Funds in shares of other investment companies
may 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.

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.

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

MANAGEMENT OF THE TRUST

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 Adviser may voluntarily choose to waive a portion of its fee or
reimburse certain expenses of the Funds. 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--fourth largest bank holding company in terms of total assets as
of December 31, 1997, 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 $11.4
billion. Of this amount, IOCM and the Trust Division have investment discretion
over $2.2 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. Mr. Beaumont has been
responsible for management of Fixed Income Fund's portfolio since February
1998 and Michigan Municipal Bond Fund's portfolio since November 1995. Mr.
Beaumont has been primarily responsible for management of Government
Securities Fund's portfolio since January 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.

DISTRIBUTION OF SHARES

ADMINISTRATION OF THE FUNDS

<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE TRUST
------------------ -----------------------------------
<S> <C>
.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>

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

YEAR 2000 STATEMENT

Like other mutual funds and business organizations worldwide, the Funds' service
providers (among them, the adviser, distributor, administrator and transfer
agent) must ensure that their computer systems are adjusted to properly process
and calculate date-related information from and after January 1, 2000. Many
software programs and, to a lesser extent, the computer hardware in use today
cannot distinguish the year 2000 from the year 1900. Such a design flaw could
have a negative impact in the handling of securities trades, pricing and
accounting services. The Funds and their service providers are actively working
on necessary changes to computer systems to deal with the year 2000 issue and
believe that systems will be year 2000 compliant when required. Analysis
continues regarding the financial impact of instituting a year 2000 compliant
program on the Funds' operations.

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, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
CONFIRMATIONS AND ACCOUNT STATEMENTS Share certificates are not issued.

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 and must have a readily ascertainable market value. 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;
Independence One U.S. Treasury Money Market Fund; Independence One International
Equity Fund; and Independence One Small Cap 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. 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.

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.

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.

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 10-52, 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.

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 10-52, 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.

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, other
than retirement accounts subject to required minimum distributions. 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
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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 June 5, 1998, 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
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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.

TAX INFORMATION
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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

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.

PERFORMANCE INFORMATION
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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 SEC) 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 pooled fund managed by
the Adviser. At the Fund's commencement of operations, the assets from the
pooled fund were 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 pooled fund.
The Fund's average annual total return for the fiscal year ended April 30,
1998 was 8.56%. The Fund's cumulative total return for the period from January
3, 1995 (date of commencement of operations of the pooled fund) to April 30,
1998 was 29.52%. The average annual total return for the same period was 8.08%.
The quoted performance data includes the performance of the pooled 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 its initial prospectus. The pooled 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 pooled fund had been registered under the 1940 Act, the performance may have
been adversely affected.

INDEPENDENCE ONE
MUTUAL FUNDS

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7010

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

1001 Liberty Avenue
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

Cusip 453777864
Cusip 453777856
Cusip 453777807

G01285-02 (6/98)

[RECYCLED LOGO]

Independence One(R)
U.S. Government
Securities Fund
Fixed Income Fund
Michigan Municipal
Bond Fund

(Distributed by Federated Securities Corp.)

Prospectus dated

June 30, 1998

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[LOGO OF MICHIGAN NATIONAL BANK INVESTMENT ADVISER]

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 June 30,
1998. This Statement is not a prospectus. You may request a copy of the
prospectus free of charge by calling 1-800-334-2292.

Independence One Mutual Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

Statement dated June 30, 1998
[GRAPHIC OMITTED]

Cusip 453777807
Cusip 453777864
Cusip 453777856
G01285 -03 (6/98)

<PAGE>

I
Table of Contents

<PAGE>

General Information About the Funds 1

Investment Objective and Policies of the Funds 1
Acceptable Investments 1
Fixed Income Fund 1
Michigan Municipal Bond Fund 6

Portfolio Investments and Strategies 7
When-Issued and Delayed Delivery Transactions 7
Repurchase Agreements 7
Reverse Repurchase Agreements 7
Portfolio Turnover 8

Investment Limitations 8

Michigan Municipal Bond Fund
Investment Risks 11

Independence One Mutual Funds Management 11
Officers and Trustees 11
Fund Ownership 13
Trustees' Compensation 13
Trustee Liability 13
Massachusetts Partnership Law 14

Investment Advisory Services 14
Adviser and Sub-Adviser to the Funds14
Advisory and Sub-Advisory Fees 14

Brokerage Transactions 14

Other Services 15
Trust Administration 15
Custodian 15
Transfer Agent and Dividend Disbursing Agent 15
Independent Auditors 15

Purchasing Shares 15
Conversion to Federal Funds 15

Determining Net Asset Value 16

Determining Market Value of Securities16

Exchange Privilege 16

Redeeming Shares 16
Redemption in Kind 16

Tax Status 17
The Funds' Tax Status 17
Shareholder's Tax Status 17
Capital Gains 17

Total Return 17

Yield 18

Tax-Equivalent Yield 18
Tax-Equivalency Table 19

Performance Comparisons 20
Economic and Market Information 21
Duration 21

Financial Statements 21

Appendix 22

<PAGE>

General Information About the Funds

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 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:

o instruments 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;

o commercial 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;

o time 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

o bankers' 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.

<PAGE>

Resets of Interest Rates

The interest rates paid on certain mortgage-backed securities in which
Fixed Income Fund may invest 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 may invest 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 may invest 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 Trustees. The
Trustees consider the following criteria in determining the liquidity of
certain restricted securities:

o the frequency of trades and quotes for the security;

o the number of dealers willing to purchase or sell the security and the
number of other potential buyers;

o dealer undertakings to make a market in the security; and

o the 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 investment adviser's ability to
accurately predict the direction of 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.

"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 investment 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
investment 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.

<PAGE>

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:

o municipal notes and municipal commercial paper;

o serial bonds sold with differing maturity dates;

o tax anticipation notes sold to finance working capital needs of
municipalities;

o bond anticipation notes sold prior to the issuance of longer-term
bonds;

o pre-refunded municipal bonds; and

o general 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.

<PAGE>

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:

o whether the lease can be terminated by the lessee;

o the potential recovery, if any, from a sale of the leased property
upon termination of the lease;

o the lessee's general credit strength (e.g., its debt, administrative,
economic and financial characteristics and prospects);

o the likelihood that the lessee will discontinue appropriating funding
for the leased property because the property is no longer deemed
essential to its operations (e.g., the potential for an "event of
non-appropriation"); and

o any 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'
investment 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.

<PAGE>

Portfolio Turnover

The Funds may trade or dispose of portfolio securities as considered
necessary to meet their respective investment objectives. For the fiscal years
ended April 30, 1998 and 1997, Government Securities Fund's portfolio turnover
rates were 28% and 73%, respectively. For the fiscal years ended April 30, 1998
and 1997, Fixed Income Fund's portfolio turnover rates were 21% and 23%,
respectively. For the fiscal years ended April 30, 1998 and 1997, Michigan
Municipal Bond Fund's portfolio turnover rates were 11% and 48%,
respectively.

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 Restricted and 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 or 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 restricted 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 not determined by the Trustees to be liquid.

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, and may invest in the securities of affiliated money market
funds as an efficient means of managing the Funds' uninvested cash. 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. 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 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.

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.

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.

<PAGE>

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 comprises 23% of the total jobs in the state,
relative to 17% nationally, it comprises a lesser share than in the 1970s when
it was 35%. The automobile industry has reduced its share of employment to 6.9%
of total employment, compared with 10.8% in 1979. In fact, Michigan's economy
continues to shift away from durable goods manufacturing to a more diversified
base reliant on services and trade. The shift to jobs in service and trade
industries has, however, resulted in declines in per capita income relative to
the nation.

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 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 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 1996, the Budget Stabilization Fund reached an historically
high level of $1.1 billion, with a continuation of this position currently
projected for the year ending September 30, 1997.

Independence One Mutual Funds Management

Officers and Trustees

Robert E. Baker*
4327 Stoneleigh Road
Bloomfield Hills, MI
Birthdate: May 6, 1930

Trustee

Retired; formerly, Vice Chairman, Chrysler Financial Corporation.

Harold Berry*
Berry Enterprises
290 Franklin Center
29100 Northwestern Highway

Southfield, MI

Birthdate: September 17, 1925

Trustee

Managing Partner, Berry Enterprises; Chairman, Independent Sprinkler Companies,
Inc.; Chairman, Berry, Ziegelman & Company.

Nathan Forbes**
1945 Long Point Drive
Bloomfield Hills, MI
Birthdate: December 5, 1962
Trustee
President, Forbes/Cohen Properties; President and Partner, The Forbes Company.

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

Trustee

Chairman, Nederlander Enterprises.

Thomas S. Wilson+
Two Championship Drive
Auburn Hills, MI
Birthdate: October 8, 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

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.

<PAGE>

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

Secretary

Corporate Counsel, Federated Investors, Inc.

* Members of the Trust's Audit Committee.

** This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.

+ 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

Trustees' Compensation

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

Robert E. Baker $12,000
Trustee
Harold Berry $12,000
Trustee
Nathan Forbes $0+
Trustee
Harry J. Nederlander $12,000
Trustee
Thomas S. Wilson $12,000
Trustee

+Information is furnished for the period from March 4, 1998 (date of election as
Trustee of the Trust) through April 30, 1998.

Trustee Liability

Massachusetts Partnership Law

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, 1998, 1997, and 1996, the Adviser earned fees from Government
Securities Fund of $507,916, $509,098, and $481,848, of which $326,518,
$327,278, and $394,602, respectively, was voluntarily waived because of
undertakings to limit Government Securities Fund's expenses. For the fiscal
years ended April 30, 1998, and 1997, and 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 $574,565, $500,293 and $212,343, of which $383,043,
$333,528 and $141,562, respectively, was voluntarily waived because of
undertakings to limit Fixed Income Fund's expenses. For the fiscal years ended
April 30, 1998, and 1997, and 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 $184,611, $182,176 and $86,756, of which
$129,534, $182,176 and $57,837, respectively, 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.

Brokerage Transactions

Other Services

Trust Administration

Federated Administrative Services, a subsidiary of Federated Investors, Inc.,
provides administrative personnel and services to the Funds for the fees set
forth in the prospectus. For the fiscal years ended April 30, 1998, 1997, and
1996, Government Securities Fund incurred administrative services costs of
$77,385, $79,408, and $81,663, respectively, of which $0, $0, and $57,395, were
voluntarily waived because of undertakings to limit Fund expenses. For the
fiscal years ended April 30, 1998, and 1997 and for the period from October 23,
1995 (date of initial public investment) to April 30, 1996, Fixed Income Fund
incurred administrative services costs of $81,673, $72,776 and $31,636, of which
$0, $0 and $30,644, respectively, was voluntarily waived because of undertakings
to limit Fund expenses. For the fiscal years ended April 30, 1998, and 1997 and
for the period from November 20, 1995 (date of initial public investment) to
April 30, 1996, Michigan Municipal Bond Fund incurred administrative costs of
$50,000, $50,000 and $12,868, of which $46,548, $44,944 and $12,468,
respectively, 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

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

Instructions for exchanges may be given in writing or by telephone. Exchange
procedures are explained in the prospectus under "Exchange Privilege."

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.

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.

<PAGE>

Tax Status

The Funds' Tax Status

o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;

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 need to raise cash to honor share redemption requests;

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

Government Securities Fund's average annual total return for the one-year and
five-year periods ended April 30, 1998 and for the period from January 11, 1993
(date of initial public investment) to April 30, 1998 were 10.37%, 6.16% and
6.70%, respectively.

Fixed Income Fund's average annual total return for the one-year period ended
April 30, 1998 was 8.56%. 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, 1998 was 16.17%. The average annual total return for the same period
was 6.12%. 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.

Michigan Municipal Bond Fund's average annual total return for the one-year
period ended April 30, 1998 and for the period from November 20, 1995 (date of
initial public investment) to April 30, 1998 were 7.38% and 5.39%,
respectively.

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.

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, 1998 for Government
Securities Fund, Fixed Income Fund and Michigan Municipal Bond Fund were 5.22%,
5.28%, and 3.95%, 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, 1998, was 5.84%, assuming a combined federal and state income
effective tax rate of 32.40%.

<PAGE>

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 1998
STATE OF MICHIGAN
COMBINED FEDERAL AND STATE INCOME TAX BRACKET:
19.40% 32.40% 35.40% 40.40% 44.00%

JOINT $1- $42,351- $102,301- $155,951- OVER

RETURN 42,350 102,300 155,950 278,450 $278,450

SINGLE $1- $25,351- $61,401- $128,101- OVER

RETURN 25,350 61,400 128,100 278,450 $278,450

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.
* Some portion of Michigan Municipal Bond Fund's income may be subject to
the federal alternative minimum tax and state and local taxes. The chart above
is for illustrative purposes only. It is not an indicator of past or future
performance of Michigan Municipal Bond Fund.

<PAGE>

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.

o 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, a
Fund will quote its ranking from its respective Lipper category in
advertising and sales literature.

o 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.

o Lehman Brothers Government Bond Index (Government Securities Fund) is
an unmanaged index comprised of all publicly issued, non-convertible
domestic debt of the U.S. government, or any agency thereof, or any
quasi-federal corporation and of corporate debt guaranteed by the U.S.
government. Lehman Brothers Government/Corporate (Total) Index
(Government Securities 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 U.S. Government its agencies and instrumentalities and corporations
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.

o Lehman Brothers Seven Year State General Obligation Bond Index
(Michigan Municipal Bond Index) is an index of general obligation bonds
rated Baa or better with 6-8 years to maturity.

<PAGE>

Economic and Market Information

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

<PAGE>

Appendix

Standard and Poor's 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.

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

NR--Not rated by Moody's.

Fitch IBCA, Inc. Long-Term Debt Ratings

NR--NR indicates that Fitch does not rate the specific issue.

Standard and Poor's 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

MIG2/VMIG2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.

Fitch IBCA, 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 Commercial Paper Ratings Definitions

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

INDEPENDENCE ONE EQUITY PLUS FUND
(A PORTFOLIO OF INDEPENDENCE ONE MUTUAL FUNDS)

PROSPECTUS

The shares of Independence One Equity Plus Fund (the "Fund") offered by this
prospectus represent interests in the Fund which is a diversified portfolio and
one of a series of investment portfolios in Independence One Mutual Funds (the
"Trust"), an open-end management investment company (a mutual fund). Michigan
National Bank professionally manages the Fund's portfolio.

The investment objective of the Fund is total return. The Fund will pursue this
objective by attempting to provide investment results that correspond to or
exceed the aggregate price and dividend performance of the Standard & Poor's 100
Composite Stock Price Index (the "S&P 100") by investing primarily in the common
stocks comprising the S&P 100. The Fund is neither affiliated with nor sponsored
by Standard & Poor's ("S&P").

Shares of the Fund are intended to be sold as an investment vehicle for
institutions, corporations, fiduciaries and individuals. Shareholders can
invest, reinvest, or redeem shares at any time without charge or penalty imposed
by the Fund. Shareholders have access to other portfolios of the Trust through
an exchange program. 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 shares of the Fund. Keep this prospectus for future reference.

The Fund has also filed a Statement of Additional Information dated June 30,
1998, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement is incorporated by reference into this prospectus.
You may request a copy of the Statement free of charge 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.

Prospectus dated June 30, 1998

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- -------------------------------------

FINANCIAL HIGHLIGHTS 2
- -------------------------------------

GENERAL INFORMATION 3
- -------------------------------------
INVESTMENT INFORMATION 3
- -------------------------------------

Investment Objective 3

Investment Policies 3

Acceptable Investments 4

Equity Investment
Considerations 6
Derivative Contracts and
Securities 7

Investment Limitation 7

INDEPENDENCE ONE MUTUAL FUNDS
INFORMATION 7
- -------------------------------------

Management of the Trust 7

Distribution of Shares 9

Fund Administration 9
Brokerage Transactions 9
Year 2000 Statement 9

NET ASSET VALUE 10
- -------------------------------------

INVESTING IN THE FUND 10
- -------------------------------------

Share Purchases 10

Minimum Investment Required 10

What Shares Cost 11

Confirmations and Account
Statements 11

Dividends and Capital Gains 11

Systematic Investment
Program 11

EXCHANGING SECURITIES FOR FUND
SHARES 11
- -------------------------------------

EXCHANGE PRIVILEGE 12
- -------------------------------------

REDEEMING SHARES 13
- -------------------------------------

Systematic Withdrawal
Program 15

Accounts with Low Balances 15

SHAREHOLDER INFORMATION 15
- -------------------------------------

Voting Rights 15

EFFECT OF BANKING LAWS 16
- -------------------------------------

TAX INFORMATION 16
- -------------------------------------

Federal Income Tax 16

PERFORMANCE INFORMATION 17
- -------------------------------------

STANDARD AND POOR'S 17
- -------------------------------------

FINANCIAL STATEMENTS 19
- -------------------------------------

INDEPENDENT AUDITORS' REPORT 33
- -------------------------------------

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

INDEPENDENCE ONE EQUITY PLUS FUND
SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)................................................................... None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of
offering price)......................................................... None
Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)..................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)....... None
Exchange Fee............................................................. None

ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)

Management Fee (after waiver)(1)......................................... 0.25%
12b-1 Fees............................................................... None
Total Other Expenses (after waiver)(2)................................... 0.17%
Total Fund Operating Expenses (after waivers)(3)....................... 0.42%
</TABLE>

(1) The management fee was reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee 0.40%.

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

(3) The Total Fund Operating Expenses for the fiscal year ended April 30, 1998,
would have been 0.61% absent the voluntary waiver of portions of the
management and administrative fees.

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
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......................................... $ 4 $13 $24 $53
</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 EQUITY PLUS FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Independent Auditors' Report on page 33.

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------
1998 1997 1996(A)
- ------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.04 $11.39 $10.00
- -------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------
Net investment income 0.22 0.21 0.11
- -------------------------------------------
Net realized and unrealized gain (loss) on
investments 4.85 2.70 1.38
- ------------------------------------------- -------- -------- --------
Total from investment operations 5.07 2.91 1.49
- ------------------------------------------- -------- -------- --------
LESS DISTRIBUTIONS
- -------------------------------------------
Distributions from net investment income (0.22) (0.21) (0.10)
- -------------------------------------------
Distributions from net realized gain on
investments (0.65) (0.05) --
- ------------------------------------------- -------- -------- --------
Total distributions (0.87) (0.26) (0.10)
- ------------------------------------------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $18.24 $14.04 $11.39
- ------------------------------------------- -------- -------- --------
TOTAL RETURN (B) 37.20% 26.00% 14.96%
- -------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------
Expenses 0.42% 0.40% 0.39%*
- -------------------------------------------
Net investment income 1.28% 1.74% 1.92%*
- -------------------------------------------
Expense waiver (c) 0.19% 0.24% 0.31%*
- -------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------
Net assets, end of period (000 omitted) $209,753 $169,328 $112,609
- -------------------------------------------
Average commission rate paid (d) $0.0350 $0.0350 $0.0345
- -------------------------------------------
Portfolio turnover 11% 8% 6%
- -------------------------------------------
</TABLE>

* Computed on an annualized basis.

(a) Reflects operations for the period from September 25, 1995 (date of initial
public investment) to April 30, 1996.

(b) Based on net asset value.

(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.

(See Notes which are an integral part of the Financial Statements)

GENERAL INFORMATION
- -------------------------------------------------------------------------------

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 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 Trust's portfolio known as Independence One
Equity Plus Fund. As of the date of this prospectus, the Fund does not offer
separate classes of shares.

Shares of the Fund are designed primarily for individuals and institutions as a
convenient means of accumulating an interest in a professionally-managed,
diversified portfolio investing substantially in the common stocks of companies
with very large market capitalization. A minimum initial investment of $1,000 is
required. Subsequent investments must be in the amount of at least $100.

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

INVESTMENT OBJECTIVE

The investment objective of the Fund is total return. The investment objective
cannot be changed without the approval of shareholders. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the investment policies described in this prospectus.

INVESTMENT POLICIES

The Fund will pursue its investment objective by attempting to provide
investment results that correspond to or exceed the aggregate price and dividend
performance of the S&P 100 by investing primarily in the stocks comprising the
S&P 100. Unless indicated otherwise, the investment policies of the Fund may be
changed by the Board of Trustees ("Trustees") without the approval of
shareholders. Shareholders will be notified before any material change in these
policies becomes effective.

The S&P 100 is a capitalization-weighted index of 100 stocks from a broad range
of industries. It provides a measure of overall large company performance
because it comprises 100 blue chip stocks from diverse industry groups. Stocks
selected for inclusion tend to be the leading companies in leading industries in
the U.S. economy. Selection criteria include market value, capitalization,
trading activity and liquidity, and soundness of financial and operating
conditions. The component stocks are weighted according to the total market
value of their outstanding shares. The impact of a component's price change is
proportional to the issue's total market value, which is the share price times
the number of shares outstanding. These are summed for all 100 stocks and
divided by a predetermined base value. The base value for the S&P 100 is
adjusted to reflect changes in capitalization resulting from mergers,
acquisitions, stock rights and substitutions. Inclusion of a particular stock in
the S&P 100 in no way implies an opinion by S&P as to its investment
attractiveness, nor is S&P a sponsor or in any way affiliated with the Fund.

Under normal circumstances, at least 80% of the Fund's assets will be invested
to correspond as closely as possible to the relative weighting of the S&P 100.
With respect to this 80% investment level, the Fund will attempt to achieve a
high degree of correlation between the performance of its portfolio and that of
the S&P 100. In managing this portion of the Fund's assets, Michigan National
Bank (the "Adviser") and Sosnoff Sheridan Group (the "Sub-Adviser")
(collectively, the "Advisers") will utilize a technique called index fund
management which entails the use of a computer program to track the S&P 100 on a
daily basis. The Advisers will purchase and sell securities from the Fund's
portfolio as necessary to continually and accurately duplicate the composition
of the S&P 100, as appropriate, as it changes over time. The Advisers will
continually assess the validity of the adjustments made to the Fund's portfolio.

With respect to the remaining 20% of the Fund's assets, the Advisers will
normally select common stocks that are included in the S&P 100, the weightings
of which may or may not be identical to that of the S&P 100. These weightings
will be determined by the Advisers in an effort to exceed the total return
performance of the S&P 100. Several criteria are considered in selecting those
stocks that, in the Advisers' opinion, are likely to have above-average
performance. These criteria include: (1) projections by securities analysts of
the stock's earnings and dividend growth; (2) growth potential, as measured by
reinvestment of a high portion of a company's current earnings; (3) improving
earnings outlook, as determined based upon surveys of Wall Street securities
analysts; (4) technical measures, such as rising trading volume indicating an
increasing investor interest in a stock; and (5) dividend yield, with preference
being given to high-yield stocks and stocks of companies which pay no dividends
and retain their earnings to finance growth.

The Fund's ability to provide investment results that correspond to or exceed
the aggregate price and dividend performance of the S&P 100 will depend partly
on the size and timing of cash flows into and out of the Fund. Investment
changes to accommodate these cash flows will be made to maintain the similarity
of the Fund's portfolio to the S&P 100, with respect to the 80% investment level
described above, to the maximum practicable extent. With respect to the
reciprocal 20% investment level described above, changes will be made to
accommodate cash flows, as appropriate. From time to time, adjustments may be
made in the Fund because of changes in the composition of the S&P 100 as
announced by S&P. It is anticipated that these adjustments will occur
infrequently, and therefore, the accompanying costs, including brokerage fees,
custodial expenses, and transfer taxes, are expected to be relatively low.
Portfolio turnover is also expected to be lower than for most other investment
companies. The adverse financial situation of an issuer may not directly result
in the elimination of its securities from the portfolio, unless the securities
are removed from the S&P 100. The Fund reserves the right to remove an
investment from the Fund if, in the Advisers' opinion, the merit of the
investment has been substantially impaired by extraordinary events or financial
conditions.

ACCEPTABLE INVESTMENTS

In addition to the investment policies described above, the Fund may utilize
stock index futures contracts and options on stocks, stock indices and stock
index futures contracts for the purposes of managing cash flows into and out of
the Fund's portfolio and potentially reducing transactional costs. The Fund will
only enter into stock index futures contracts for the purpose of offsetting
risks from other positions.

The Fund may hold cash reserves which may be invested in temporary investments
which include, but are not limited to, short-term money market instruments, U.S.
government securities (including variable rate U.S. government securities), and
repurchase agreements. The Fund may also invest in restricted and illiquid
securities, securities of other investment companies, and lend portfolio
securities.

STOCK INDEX FUTURES AND OPTIONS. The Fund may utilize stock index futures
contracts, options, and options on futures contracts, subject to the limitation
that the value of these futures contracts and options will not exceed 20% of the
Fund's total assets. Also the Fund will not purchase options to the extent that
more than 5% of the value of the Fund's total assets would be invested in
premiums on open option positions.

These contracts and options will serve three purposes. First, the contracts,
some of which require a small margin, will allow the Fund to maintain sufficient
liquidity to meet redemption requests, thereby handling cash flows into and out
of the Fund. In addition, the contracts will increase the level of Fund assets
that may be devoted to attempting to approximate the investment return of the
S&P 100. Third, participation in futures contracts could potentially reduce
transaction costs, since transaction costs associated with futures and options
contracts can be lower than costs stemming from direct investments in stocks.

RISKS. There are several risks accompanying the utilization of futures contracts
to effectively anticipate market movements. First, positions in futures
contracts may be closed only on an exchange or board of trade that furnishes a
secondary market for such contracts. While the Fund plans to utilize futures
contracts only if an active market for such contracts exists, there is no
guarantee that a liquid market will exist for the contracts at a specified time.
The Fund's ability to establish and close out futures and options positions
depends on this secondary market. Furthermore, because, by definition, futures
contracts look to projected price levels in the future, and not to current
levels of valuation, market circumstances may result in there being a
discrepancy between the price of the stock index future and the movement in the
corresponding stock index. The absence of a perfect price correlation between
the futures contract and its underlying stock index could stem from investors
choosing to close futures contracts by offsetting transactions, rather than
satisfying additional margin requirements. This could result in a distortion of
the relationship between the index and futures market. In addition, because the
futures market imposes less burdensome margin requirements than the securities
market, an increased amount of participation by speculators in the futures
market could result in price fluctuations.

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 Adviser's ability to accurately predict the direction
of stock prices, interest rates and other relevant economic factors. In
addition, 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 Statement of Additional Information includes a further
discussion of futures and options transactions.

In view of these considerations, 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. In this regard,
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, the Fund has claimed an exclusion from registration as a
commodity pool operator under the regulations promulgated by the CFTC.

TEMPORARY INVESTMENTS. For temporary defensive purposes, the Fund may invest
up to 100% of its total assets in cash and cash items including: short-term
money market instruments; securities issued and/or guaranteed as to payment of
principal and interest by the U.S. government, its agencies or
instrumentalities; shares of money market mutual funds; and repurchase
agreements.

The Fund may also hold the instruments described above in such amounts as
necessary: to provide funds for the settlement of portfolio transactions;
pending investment of cash receipts in the ordinary course of business; and to
meet requests for redemption of Fund shares.

U.S. GOVERNMENT SECURITIES. The Fund is permitted to invest 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, the following:

. 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, Farm Credit Banks, and Banks for Cooperatives;
Farmers Home Administration; Federal Home Loan Banks; Federal Home Loan
Mortgage Corporation; Federal National Mortgage Association; Government
National Mortgage Association; and Student Loan Marketing Association.

Some of the short-term U.S. government securities the Fund may purchase carry
variable interest rates. These securities have a rate of interest subject to
adjustment at least annually. This adjusted interest rate is ordinarily tied to
some objective standard, such as a published interest rate or interest rate
index.

REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which banks,
broker/ dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at the time of
sale to repurchase them at a mutually agreed upon time and price within one year
from the date of acquisition. To the extent that the original seller does not
repurchase the securities from the Fund, the Fund could receive less than the
repurchase price on any sale of such securities.

EQUITY INVESTMENT CONSIDERATIONS

As described above, the Fund invests primarily in the common stocks comprising
the S&P 100. As with other mutual funds that invest primarily in common stocks,
the Fund is subject to market risks. That is, the possibility exists that common
stocks will decline over short or even extended periods of time, and the United
States equity market tends to be cyclical, experiencing both periods when stock
prices generally increase and periods when stocks prices generally decrease.

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, it will only do so in a manner consistent with its
investment objectives, policies and limitations.

INVESTMENT LIMITATION

The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for at least a
percentage of its cash value with an agreement to buy it back on a set date)
except, under certain circumstances, the Fund may borrow up to one-third of the
value of its total assets and pledge securities to secure such borrowings.

The above investment limitation cannot be changed without shareholder approval.

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

MANAGEMENT OF THE TRUST

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

ADVISORY FEES. The Adviser may receive an annual investment advisory fee equal
to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive a portion of its fee or reimburse certain expenses of the Fund.

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 fourth largest bank
holding company in terms of total assets, as of December 31, 1997, 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. IOCM and the Trust Division of Michigan National Bank (the
"Trust Division") have managed custodial assets totaling $11.4 billion. Of this
amount, IOCM and the Trust Division have investment discretion over $2.2
billion.

Michigan National Bank has managed mutual funds since May 1989. 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 Fund 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.

Sharon Dischinger is Second Vice President and Portfolio Manager for Michigan
National Bank and Independence One Capital Management Corporation in Farmington
Hills, and has been responsible for management of the Fund's portfolio since its
inception. Ms. Dischinger joined Michigan National Bank in 1990 and is currently
the head equity trader. She is also a General Securities Representative. Prior
to Michigan National Bank, Ms. Dischinger was the head equity trader at Morison
Asset Management. SUB-ADVISER. Pursuant to the terms of an investment
sub-advisory agreement between the Adviser and Sosnoff Sheridan Corporation
(doing business as Sosnoff Sheridan Group), the Sub-Adviser furnishes certain
investment advisory services to the Adviser, including investment research,
statistical and other factual information, and recommendations, based on its
analysis, and assists the Adviser in identifying securities for potential
purchase and/or sale on behalf of the Fund's portfolio. For the services
provided and the expenses incurred by the Sub-Adviser pursuant to the
sub-advisory agreement, the Sub- Adviser is entitled to receive an annual fee of
0.035% of the average daily value of the Fund's equity securities payable by the
Adviser. The Sub-Adviser may elect to waive some or all of its fee. In no event
shall the Fund be responsible for any fees due to the Sub-Adviser for its
services to the Adviser. The Sub-Adviser, located at 440 South LaSalle Street,
Suite 2301, Chicago, Illinois, 60605, is a corporation controlled by Tom
Sosnoff, its Director and President, and Scott Sheridan, its Director, Executive
Vice- President and Secretary. In the event that the Sub-Adviser, for any
reason, ceases to furnish sub-advisory services to the Fund, the Adviser will
assume direct responsibility for all advisory functions.

DISTRIBUTION OF SHARES

Federated Securities Corp. is the principal distributor for shares of the
Fund. 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, Inc.

FUND ADMINISTRATION

ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, Inc., provides the Fund with certain administrative
personnel and services necessary to operate the Fund, such as certain legal
and accounting services. Federated Administrative Services provides these at
an annual rate as specified below:

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

BROKERAGE TRANSACTIONS

Like other mutual funds and business organizations worldwide, the Fund's service
providers (among them, the adviser, distributor, administrator and transfer
agent) must ensure that their computer systems are adjusted to properly process
and calculate date-related information from and after January 1, 2000. Many
software programs and, to a lesser extent, the computer hardware in use today
cannot distinguish the year 2000 from the year 1900. Such a design flaw could
have a negative impact in the handling of securities trades, pricing and
accounting services. The Fund and its service providers are actively working on
necessary changes to computer systems to deal with the year 2000 issue and
believe that systems will be year 2000 compliant when required. Analysis
continues regarding the financial impact of instituting a year 2000 compliant
program on the Fund's operations.

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

The Fund's net asset value per share fluctuates. It is determined 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 FUND
- -------------------------------------------------------------------------------

SHARE PURCHASES

Shares of the Fund 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 Fund on days on which both the New York Stock Exchange
and 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 Fund reserves 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 Fund through Michigan National Bank or Independence One. In
addition, investors may purchase shares of the Fund 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 Fund 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 by check or wire transfer within three business days of receipt of the
order. To purchase by check, the check must be included with the order and made
payable to "Independence One Equity Plus 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 Equity Plus 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 the Fund is $1,000. Subsequent investments
must be in amounts of at least $100.

WHAT SHARES COST

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

The net asset value is determined as of 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
the 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, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
CONFIRMATIONS AND ACCOUNT STATEMENTS As transfer agent for the Fund,
Federated Shareholder Services Company maintains a share account for each
shareholder of record. Share certificates are not issued.

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 and paid quarterly. Capital gains realized by the Fund,
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 Fund 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 the Fund account has been opened, shareholder 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
- -------------------------------------------------------------------------------

The Fund may accept securities in exchange for Fund shares. The Fund will allow
such exchanges only upon the prior approval of the Fund and a determination by
the Fund and the Adviser that the securities to be exchanged are acceptable.
Any securities exchanged must meet the investment objective and policies of the
Fund, must have a readily ascertainable market value. 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 Fund. The Fund acquires the exchanged
securities for investment and not for resale.

Securities accepted by the Fund will be valued in the same manner as the Fund
values its 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 the Fund will
be issued for the equivalent amount of securities accepted.

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

All shareholders of the Fund are shareholders of the Trust, which consists of
the Fund, Independence One Fixed Income Fund, Independence One Michigan
Municipal Bond Fund, Independence One U.S. Government Securities Fund,
Independence One International Equity Fund, and Independence One Small Cap Fund
and the following money market funds: Independence One Michigan Municipal Cash
Fund; Independence One Prime Money Market Fund; Independence One U.S. Treasury
Money Market Fund. Shareholders of the Fund 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 Fund 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 Fund may be exchanged for shares of participating funds at net
asset value.

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 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 Fund reserves 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.

An authorization form permitting the Fund to accept telephone exchange 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 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 a fund will not receive a dividend from the Fund
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 shareholders cannot
contact their Michigan National Bank or Independence One representative or
authorized broker by telephone, it is recommended that an exchange request be
made in writing and sent by mail for next day delivery. Send mail requests to:
Independence One Mutual Funds, 27777 Inkster Road, Mail Code 10-52, Farmington
Hills, Michigan 48333-9065.

If reasonable procedures are not followed by the Fund, it 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 10-52, 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 next determined net asset value after Federated
Shareholder Services Company receives the redemption request. Redemptions will
be made on days on which the Fund computes its 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
Fund 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 Fund shall determine it necessary to terminate or modify this
method of redemption, shareholders would be promptly notified.

An authorization form permitting the Fund 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.

If reasonable procedures are not followed by the Fund, it 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 Fund
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 10-52, 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.

. 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 Fund does not accept signatures guaranteed by a notary public.

The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its 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 Fund 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 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, other
than retirement accounts subject to required minimum distributions. 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 Fund 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 the 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 the 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 Fund's operation and for
the election of Trustees under certain circumstances. As of June 5, 1998,
Pierson & Co., the nominee for Michigan National Bank may for certain purposes
be deemed to control the Equity Plus Fund because it is owner of record of
certain shares of the Fund.

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

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

FEDERAL INCOME TAX

The Fund will pay no federal income tax because it 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.

The 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, if any, will not be combined for tax purposes with
those realized by the Fund.

Unless otherwise exempt, shareholders 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. 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.

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

From time to time the Fund advertises its total return and yield.

Total return represents the change, over a specific period of time, in the value
of an investment in the Fund 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 yield of the Fund is calculated by dividing the net investment income per
share (as defined by the SEC) earned by the Fund over a thirty-day period by the
offering price per share of the Fund on the last day of the period. This number
is then annualized using semi-annual compounding. The yield does not necessarily
reflect income actually earned by the Fund and, therefore, may not correlate to
the dividends or other distributions paid to shareholders.

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

STANDARD & POOR'S
- -------------------------------------------------------------------------------

"Standard & Poor's(R)", "S&P(R)", and "S&P 100(R)" are trademarks of the
McGraw-Hill Companies, Inc. and have been licensed for use by Michigan National
Bank. The Fund is not sponsored, endorsed, sold or promoted by, or affiliated
with, Standard & Poor's ("S&P").

S&P makes no representation or warranty, express or implied, to the owners of
the Fund or any member of the public regarding the advisability of investing in
securities generally or in the Fund particularly or the ability of the Standard
& Poor's 100 Index ("S&P 100 Index") to track general stock market performance.
S&P's only relationship to Michigan National Bank (the "Licensee") is the
licensing of certain trademarks and trade names of S&P and of the S&P 100 Index
which is determined, composed and calculated by S&P without regard to the
Licensee or the Fund. S&P has no obligation to take the needs of the Licensee or
the owners of the Fund into consideration in the determination of the timing of,
prices at, or quantities of the Fund to be issued or in the determination or
calculation of the equation by which the Fund is to be converted into cash. S&P
has no obligation or liability in connection with the administration, marketing
or trading of the Fund.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 100 INDEX
OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE FUND, OR ANY OTHER PERSON
OR ENTITY FROM THE USE OF THE S&P 100 INDEX OR ANY DATA INCLUDED THEREIN IN
CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER USE. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
S&P 100 INDEX OR ANY DATA INCLUDED THEREIN.

WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY
FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

INDEPENDENCE ONE EQUITY PLUS FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS--98.2%
-----------------------------------------------
AEROSPACE & DEFENSE--2.8%
------------------------------------
53,972 Boeing Co. $ 2,701,973
------------------------------------
6,850 General Dynamics Corp. 289,413
------------------------------------
18,467 Raytheon Co., Class B 1,046,848
------------------------------------
11,373 Rockwell International Corp. 636,177
------------------------------------
12,531 United Technologies Corp. 1,233,520
------------------------------------ ------------
Total 5,907,931
------------------------------------ ------------
AUTOMOTIVE--3.4%
------------------------------------
36,081 Chrysler Corp. 1,450,005
------------------------------------
66,133 Ford Motor Co. 3,029,718
------------------------------------
38,521 General Motors Corp. 2,595,352
------------------------------------ ------------
Total 7,075,075
------------------------------------ ------------
BANKING--4.0%
------------------------------------
37,299 BankAmerica Corp. 3,170,415
------------------------------------
15,636 First Chicago NBD Corp. 1,452,194
------------------------------------
51,206 NationsBank Corp. 3,878,855
------------------------------------ ------------
Total 8,501,464
------------------------------------ ------------
CAPITAL GOODS--1.1%
------------------------------------
8,088 Homestake Mining Co. 134,711
------------------------------------
22,258 Minnesota Mining & Manufacturing Co. 2,100,599
------------------------------------ ------------
Total 2,235,310
------------------------------------ ------------
CHEMICALS--3.6%
------------------------------------
12,509 Dow Chemical Co. 1,209,464
------------------------------------
61,630 Du Pont (E.I.) de Nemours & Co. 4,487,434
------------------------------------
3,972 Mallinckrodt, Inc. 128,097
------------------------------------
31,910 Monsanto Co. 1,687,241
------------------------------------ ------------
Total 7,512,236
------------------------------------ ------------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------
COMMERCIAL--1.2%
-------------------------------------
59,611 Ameritech Corp. $ 2,537,193
------------------------------------- ------------
COMPUTERS--13.5%
-------------------------------------
4,159 (a)Ceridian Corp. 235,243
-------------------------------------
54,800 (a)Cisco Systems, Inc. 4,014,100
-------------------------------------
8,458 (a)Computer Sciences Corp. 446,160
-------------------------------------
55,986 Hewlett-Packard Co. 4,216,446
-------------------------------------
52,270 International Business Machines Corp. 6,056,786
-------------------------------------
131,442 (a)Microsoft Corp. 11,846,210
-------------------------------------
52,755 (a)Oracle Corp. 1,365,036
-------------------------------------
9,690 (a)Unisys Corp. 217,419
------------------------------------- ------------
Total 28,397,400
------------------------------------- ------------
CONSUMER--1.2%
-------------------------------------
25,314 American Express Co. 2,582,028
------------------------------------- ------------
ELECTRIC--0.6%
-------------------------------------
13,436 Entergy Corp. 334,221
-------------------------------------
38,028 Southern Co. 1,007,742
------------------------------------- ------------
Total 1,341,963
------------------------------------- ------------
ELECTRICAL EQUIPMENT--7.8%
-------------------------------------
5,164 Black & Decker Corp. 266,592
-------------------------------------
8,152 (a)Digital Equipment Corp. 453,455
-------------------------------------
176,085 General Electric Co. 14,989,236
-------------------------------------
6,850 Honeywell, Inc. 637,906
------------------------------------- ------------
Total 16,347,189
------------------------------------- ------------
ELECTRONICS--4.5%
-------------------------------------
12,127 AMP, Inc. 476,743
-------------------------------------
88,027 Intel Corp. 7,113,682
-------------------------------------
8,890 (a)National Semiconductor Corp. 195,580
-------------------------------------
2,445 Polaroid Corp. 107,580
-------------------------------------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
--------------------------------------------------
ELECTRONICS--CONTINUED
---------------------------------------
2,758 Tektronix, Inc. $ 118,594
---------------------------------------
21,255 Texas Instruments, Inc. 1,361,648
--------------------------------------- ------------
Total 9,373,827
--------------------------------------- ------------
ENTERTAINMENT--2.2%
---------------------------------------
36,770 Disney (Walt) Co. 4,570,971
---------------------------------------
5,565 (a)Harrah's Entertainment, Inc. 145,038
--------------------------------------- ------------
Total 4,716,009
--------------------------------------- ------------
FINANCIAL SERVICES--2.9%
---------------------------------------
24,572 Citicorp 3,698,086
---------------------------------------
6,430 Hartford Financial Services Group, Inc. 712,123
---------------------------------------
17,929 Merrill Lynch & Co., Inc. 1,573,270
--------------------------------------- ------------
Total 5,983,479
--------------------------------------- ------------
FOOD & BEVERAGE--8.3%
---------------------------------------
133,069 Coca-Cola Co. 10,096,610
---------------------------------------
19,998 Heinz (H.J.) Co. 1,089,891
---------------------------------------
37,472 McDonald's Corp. 2,318,580
---------------------------------------
82,626 PepsiCo, Inc. 3,279,219
---------------------------------------
5,803 Ralston Purina Co. 615,118
--------------------------------------- ------------
Total 17,399,418
--------------------------------------- ------------
FOREST PRODUCTS & PAPER--0.9%
---------------------------------------
3,094 Boise Cascade Corp. 116,218
---------------------------------------
5,299 Champion International Corp. 285,152
---------------------------------------
16,661 International Paper Co. 869,496
---------------------------------------
10,872 Weyerhaeuser Co. 626,499
--------------------------------------- ------------
Total 1,897,365
--------------------------------------- ------------
HOMEBUILDERS--0.1%
---------------------------------------
4,566 Fluor Corp. 215,744
--------------------------------------- ------------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
---------------------------------------------
HOUSEHOLD PRODUCTS--0.7%
----------------------------------
16,111 Colgate-Palmolive Co. $ 1,444,955
---------------------------------- ------------
INSURANCE--3.2%
----------------------------------
13,266 American General Corp. 883,847
----------------------------------
38,206 American International Group, Inc. 5,026,477
----------------------------------
3,984 CIGNA Corp. 824,439
---------------------------------- ------------
Total 6,734,763
---------------------------------- ------------
MANUFACTURING--0.7%
----------------------------------
9,491 Allegheny Teledyne, Inc. 240,834
----------------------------------
17,695 Eastman Kodak Co. 1,277,358
---------------------------------- ------------
Total 1,518,192
---------------------------------- ------------
MEDICAL SUPPLIES--1.0%
----------------------------------
15,253 Baxter International, Inc. 845,588
----------------------------------
35,268 Columbia/HCA Healthcare Corp. 1,161,640
---------------------------------- ------------
Total 2,007,228
---------------------------------- ------------
METALS & MINING--0.3%
----------------------------------
9,393 Aluminum Co. of America 727,958
---------------------------------- ------------
OFFICE EQUIPMENT--1.1%
----------------------------------
4,367 Harris Corp. 211,254
----------------------------------
17,749 Xerox Corp. 2,014,512
---------------------------------- ------------
Total 2,225,766
---------------------------------- ------------
OIL--10.1%
----------------------------------
53,040 Amoco Corp. 2,347,020
----------------------------------
17,470 Atlantic Richfield Co. 1,362,660
----------------------------------
9,095 Baker Hughes, Inc. 368,348
----------------------------------
5,776 Coastal Corp. 412,623
----------------------------------
134,303 Exxon Corp. 9,795,725
----------------------------------
14,268 Halliburton Co. 784,740
----------------------------------
42,722 Mobil Corp. 3,375,038
----------------------------------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
---------------------------------------------------
OIL--CONTINUED
----------------------------------------
18,666 Occidental Petroleum Corp. $ 549,480
----------------------------------------
26,640 Schlumberger Ltd. 2,207,790
---------------------------------------- ------------
Total 21,203,424
---------------------------------------- ------------
PERSONAL CARE PRODUCTS--0.4%
----------------------------------------
7,190 Avon Products, Inc. 590,928
----------------------------------------
5,873 International Flavors & Fragrances, Inc. 287,410
---------------------------------------- ------------
Total 878,338
---------------------------------------- ------------
PHARMACEUTICALS--9.5%
----------------------------------------
54,152 Bristol-Myers Squibb Co. 5,733,343
----------------------------------------
73,246 Johnson & Johnson 5,227,933
----------------------------------------
64,472 Merck & Co., Inc. 7,768,876
----------------------------------------
27,636 Pharmacia & Upjohn, Inc. 1,162,439
---------------------------------------- ------------
Total 19,892,591
---------------------------------------- ------------
RECREATION--0.1%
----------------------------------------
5,430 Brunswick Corp. 176,475
---------------------------------------- ------------
RETAIL--4.8%
----------------------------------------
26,881 (a)K Mart Corp. 468,737
----------------------------------------
14,987 Limited, Inc. 503,001
----------------------------------------
12,597 May Department Stores Co. 777,077
----------------------------------------
21,350 Sears, Roebuck & Co. 1,266,322
----------------------------------------
5,809 Tandy Corp. 288,998
----------------------------------------
15,733 (a)Toys 'R' Us, Inc. 433,641
----------------------------------------
124,236 Wal-Mart Stores, Inc. 6,281,683
---------------------------------------- ------------
Total 10,019,459
---------------------------------------- ------------
STEEL--0.1%
----------------------------------------
6,217 (a)Bethlehem Steel Corp. 96,752
---------------------------------------- ------------
TELECOMMUNICATIONS--6.2%
----------------------------------------
89,525 AT&T Corp. 5,377,095
----------------------------------------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
-------------------------------------------------------------
TELECOMMUNICATIONS--CONTINUED
--------------------------------------------------
42,299 Bell Atlantic Corp. $ 3,957,600
--------------------------------------------------
37,934 MCI Communications Corp. 1,908,554
--------------------------------------------------
28,559 Northern Telecom Ltd. 1,738,529
-------------------------------------------------- ------------
Total 12,981,778
-------------------------------------------------- ------------
TRANSPORTATION--1.2%
--------------------------------------------------
8,507 Burlington Northern Santa Fe 842,193
--------------------------------------------------
4,031 Delta Air Lines, Inc. 468,604
--------------------------------------------------
6,266 (a)FDX Corp. 426,088
--------------------------------------------------
20,536 Norfolk Southern Corp. 686,673
-------------------------------------------------- ------------
Total 2,423,558
-------------------------------------------------- ------------
UTILITIES--0.3%
--------------------------------------------------
22,382 Williams Cos., Inc. (The) 707,831
-------------------------------------------------- ------------
UTILITIES-ELECTRIC--0.4%
--------------------------------------------------
10,327 American Electric Power Co., Inc. 493,114
--------------------------------------------------
11,932 Unicom Corp. 414,635
-------------------------------------------------- ------------
Total 907,749
-------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $108,178,946) 205,970,448
-------------------------------------------------- ------------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- --------------------------------------------------- ------------
<C> <S> <C>
(B) REPURCHASE AGREEMENT--1.6%
--------------------------------------------------------------
$3,429,000 First Chicago Capital Markets, Inc., 5.52%, dated
4/30/1998, due 5/1/1998 $ 3,429,000
--------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $111,607,946)(C) $209,399,448
--------------------------------------------------- ------------
</TABLE>

(a) Non-income producing security.

(b) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.

(c) The cost of investments for federal tax purposes amounts to $111,710,005.
The net unrealized appreciation of investments on a federal tax basis
amounts to $97,689,443 which is comprised of $97,801,707 appreciation and
$112,264 depreciation at April 30, 1998.

Note: The categories of investments are shown as a percentage of net assets
($209,753,144) at April 30, 1998.

(See Notes which are an integral part of the Financial Statements)

INDEPENDENCE ONE EQUITY PLUS FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------
Total investments in securities, at value
(identified cost $111,607,946 and tax cost
$111,710,005) $209,399,448
- -------------------------------------------
Cash 564
- -------------------------------------------
Income receivable 208,581
- -------------------------------------------
Receivable for shares sold 270,632
- -------------------------------------------
Deferred organizational costs 14,374
- -------------------------------------------
Other assets 10,371
- ------------------------------------------- ------------
Total assets 209,903,970
- -------------------------------------------
LIABILITIES:
- ----------------------------------
Payable for investments purchased $ 42,123
- ----------------------------------
Payable for shares redeemed 88,452
- ----------------------------------
Accrued expenses 20,251
- ---------------------------------- --------
Total liabilities 150,826
- ------------------------------------------- ------------
NET ASSETS for 11,496,485 shares
outstanding $209,753,144
- ------------------------------------------- ------------
NET ASSETS CONSIST OF:
- -------------------------------------------
Paid in capital $109,067,271
- -------------------------------------------
Net unrealized appreciation of investments 97,791,502
- -------------------------------------------
Accumulated net realized gain on
investments 2,809,476
- -------------------------------------------
Undistributed net investment income 84,895
- ------------------------------------------- ------------
Total Net Assets $209,753,144
- ------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------
$209,753,144/11,496,485 shares outstanding $18.24
- ------------------------------------------- ------------
</TABLE>

(See Notes which are an integral part of the Financial Statements)

INDEPENDENCE ONE EQUITY PLUS FUND
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------
Dividends $ 2,987,137
- -------------------------------------------------------------
Interest 236,911
- ------------------------------------------------------------- -----------
Total income 3,224,048
- -------------------------------------------------------------
EXPENSES:
- -------------------------------------------------
Investment advisory fee $ 758,348
- -------------------------------------------------
Administrative personnel and services fee 202,102
- -------------------------------------------------
Custodian fees 39,564
- -------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 28,306
- -------------------------------------------------
Trustees' fees 8,000
- -------------------------------------------------
Auditing fees 13,500
- -------------------------------------------------
Legal fees 5,500
- -------------------------------------------------
Portfolio accounting fees 53,283
- -------------------------------------------------
Share registration costs 19,849
- -------------------------------------------------
Printing and postage 15,276
- -------------------------------------------------
Insurance premiums 3,000
- -------------------------------------------------
Miscellaneous 8,001
- ------------------------------------------------- ----------
Total expenses 1,154,729
- -------------------------------------------------
Waivers--
- ---------------------------------------
Waiver of investment advisory fee $(284,380)
- ---------------------------------------
Waiver of administrative personnel and
services fee (80,996)
- --------------------------------------- ---------
Total waivers (365,376)
- ------------------------------------------------- ----------
Net expenses 789,353
- ------------------------------------------------------------- -----------
Net investment income 2,434,695
- ------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------
Net realized gain on investments 8,506,760
- -------------------------------------------------------------
Net change in unrealized appreciation of investments 48,813,788
- ------------------------------------------------------------- -----------
Net realized and unrealized gain on investments 57,320,548
- ------------------------------------------------------------- -----------
Change in net assets resulting from operations $59,755,243
- ------------------------------------------------------------- -----------
</TABLE>

(See Notes which are an integral part of the Financial Statements)

INDEPENDENCE ONE EQUITY PLUS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
--------------------------
1998 1997
- --------------------------------------------------- ------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------
OPERATIONS--
- ---------------------------------------------------
Net investment income $ 2,434,695 $ 2,555,704
- ---------------------------------------------------
Net realized gain on investments ($8,551,167 and
$1,787,648 net gains, respectively, as computed for
federal tax purposes) 8,506,760 1,757,572
- ---------------------------------------------------
Net change in unrealized appreciation 48,813,788 31,063,371
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from operations 59,755,243 35,376,647
- --------------------------------------------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------
Distributions from net investment income (2,497,120) (2,489,618)
- ---------------------------------------------------
Distributions from net realized gains (7,427,247) (594,000)
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from distributions
to shareholders (9,924,367) (3,083,618)
- --------------------------------------------------- ------------ ------------
SHARE TRANSACTIONS--
- ---------------------------------------------------
Proceeds from sale of shares 29,050,872 50,948,693
- ---------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 6,777,113 1,995,104
- ---------------------------------------------------
Cost of shares redeemed (45,233,940) (28,517,581)
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from share
transactions (9,405,955) 24,426,216
- --------------------------------------------------- ------------ ------------
Change in net assets 40,424,921 56,719,245
- ---------------------------------------------------
NET ASSETS:
- ---------------------------------------------------
Beginning of period 169,328,223 112,608,978
- --------------------------------------------------- ------------ ------------
End of period (including undistributed net
investment income of $84,895 and $147,320,
respectively) $209,753,144 $169,328,223
- --------------------------------------------------- ------------ ------------
</TABLE>

(See Notes which are an integral part of the Financial Statements)

INDEPENDENCE ONE EQUITY PLUS FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
- -------------------------------------------------------------------------------

(1) ORGANIZATION

Independence One Mutual Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Trust consists of nine portfolios. The financial
statements included herein are only those of Independence One Equity Plus Fund
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The investment
objective is total return.

(2) SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.

INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at the
time of purchase may be valued at amortized cost, which approximates fair
market value.

REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Fund to monitor, on a
daily basis, the market value of each repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price to be
paid under the repurchase agreement transaction.

The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.

INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend date.

INDEPENDENCE ONE EQUITY PLUS FUND
- -------------------------------------------------------------------------------

FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin earning interest on the settlement date.

DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration
of its shares in its first fiscal year, excluding the initial expense of
registering its shares, have been deferred and are being amortized over a
period not to exceed five years from the Fund's commencement date.

Organizational expenses of $23,832 were borne initially by the Adviser. The
Fund has reimbursed the Adviser for these expenses. These expenses have been
deferred and are being amortized over the five year period following the
Fund's effective date. For the year ended April 30, 1998, the Fund expensed
$4,569 of organizational expenses.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results could differ
from those estimated.

OTHER--Investment transactions are accounted for on the trade date.

(3) SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).

Transactions in shares were as follows:

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------
1998 1997
- ---------------------------------------------- ---------- ----------
<S> <C> <C>
Shares sold 1,818,823 4,175,707
- ----------------------------------------------
Shares issued to shareholders in payment of
distributions declare 436,421 164,811
- ----------------------------------------------
Shares redeemed (2,818,913) (2,168,967)
- ---------------------------------------------- ---------- ----------
Net change resulting from share transactions (563,669) 2,171,551
- ---------------------------------------------- ---------- ----------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- -------------------------------------------------------------------------------

(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Michigan National Bank, the Fund's investment adviser
(the "Adviser"), earns for its services an annual investment advisory fee
equal to 0.40% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.

Under the terms of a sub-advisory agreement between the Adviser and Sosnoff
Sheridan Corporation, Sosnoff Sheridan Corporation receives an annual fee from
the Adviser equal to .035% of the average daily value of the Fund's equity
securities. Sosnoff Sheridan Corporation may voluntarily
choose to reduce its compensation.

ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the
Fund with certain administrative personnel and services. The fee paid to FAS
is based on the level of average aggregate net assets of the Trust for the
period. The administrative fee during any fiscal year shall be at least
$50,000 for each portfolio in the Trust. FAS may voluntarily choose to waive a
portion of its fee.

TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC") serves as transfer and dividend disbursing agent for the
Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.

PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.

CUSTODIAN FEES--Michigan National Bank is the Fund's custodian. The fee is
based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.

GENERAL--Certain of the Officers of the Trust are Officers and/or
Directors or Trustees of the above companies.

(5) INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities, for the
period ended April 30, 1998, were as follows:
<TABLE>
<S> <C>
- ---------
PURCHASES $19,452,363
- --------- -----------
SALES $33,899,681
- --------- -----------
</TABLE>

INDEPENDENCE ONE EQUITY PLUS FUND
- -------------------------------------------------------------------------------

(6) YEAR 2000

Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund. (7) SUBSEQUENT
EVENT Subsequent to the year ended April 30, 1998, the Trust added
Independence One Small Cap Fund and Independence One International Equity Fund,
which will become effective June 16, 1998.

REPORT OF KPMG PEAT MARWICK LLP,
INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------

To the Board of Trustees and Shareholders INDEPENDENCE ONE MUTUAL FUNDS:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Independence One Equity Plus Fund (a portfolio
within Independence One Mutual Funds) as of April 30, 1998, and the related
statement of operations for the year then ended, and the statements of changes
in net assets for each of the years in the two-year period then ended, and the
financial highlights, which is presented on page 2 of this prospectus, for the
years or period from September 25, 1995 (commencement of operations) to April
30, 1998. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned at April 30, 1998 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
presentation. We believe that our audits provide a reasonable basis for our
opinion. In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material respects, the
financial position of Independence One Equity Plus Fund as of April 30, 1998,
and the results of its operations, changes in its net assets, and its financial
highlights for each of the periods listed above, in conformity with generally
accepted accounting principles.

KPMG PEAT MARWICK LLP

Pittsburgh, Pennsylvania

June 12, 1998

INDEPENDENCE ONE
MUTUAL FUNDS

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7010

INVESTMENT ADVISER
Michigan National Bank
27777 Inkster Road
Mail Code 10-52
Farmington Hills, Michigan 48333-9065

SUB-ADVISER
Sosnoff Sheridan Corporation
440 South LaSalle Street
Suite 2301
Chicago, Illinois 60605

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower

1001 Liberty Avenue
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

Cusip 453777872

G00979-08 (6/98)

[RECYCLED LOGO]

Independence One(R)
Equity Plus Fund

(Distributed by Federated Securities Corp.)

Prospectus dated

June 30, 1998

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

[LOGO OF MICHIGAN NATIONAL BANK Investment Adviser]

Independence One Equity Plus Fund
(A Portfolio of Independence One Mutual Funds)

Statement of Additional Information

This Statement of Additional Information should be read with the
prospectus of Independence One Equity Plus Fund (the "Fund"), a portfolio
of Independence One Mutual Funds (the "Trust") dated June 30, 1998. This
Statement is not a prospectus. You may request a copy of a prospectus free
of charge by calling 1-800-334-2292.

Independence One Mutual Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

Statement dated June 30, 1998
[GRAPHIC OMITTED]

Cusip 453777872
G01198 -01 (6/98)

<PAGE>

I
Table of Contents

<PAGE>

General Information About the Fund 1

Investment Objective and Policies 1
Types of Investments 1
Portfolio Turnover 3
Investment Limitations 3

Independence One Mutual Funds Management 6
Officers and Trustees 6
Fund Ownership 7
Trustees' Compensation 8
Trustee Liability 8
Massachusetts Partnership Law 8

Investment Advisory Services 8
Adviser to the Fund 8
Advisory Fees 9
Sub-Adviser to the Fund 9
Sub-Advisory Fees 9

Brokerage Transactions 9

Other Services 9
Trust Administration 9
Custodian 9
Transfer Agent and Dividend Disbursing Agent 9
Independent Auditors 10

Purchasing Shares 10
Conversion to Federal Funds 10

Determining Net Asset Value 10

Determining Market Value of Securities10

Redeeming Shares 10
Redemption in Kind 10

Tax Status 11
The Fund's Tax Status 11
Shareholders' Tax Status 11
Capital Gains 11

Total Return 11

Yield 11

Performance Comparisons 12
Economic and Market Information 12

<PAGE>

General Information About the Fund

The Fund is a portfolio in Independence One Mutual Funds (the "Trust"), which
was established as a Massachusetts business trust under a Declaration of Trust
dated January 9, 1989.

Investment Objective and Policies

The Fund's investment objective is total return. This investment objective
cannot be changed without the approval of shareholders.

Types of Investments

In addition to the common stocks described in the prospectus, the Fund may also
invest in temporary investments which include, but are not limited to,
short-term money market instruments and U.S. government obligations, and
securities in such proportions as, in the judgment of the Fund's investment
adviser, prevailing market conditions warrant. The following discussion
supplements the description of the Fund's investment policies in the prospectus.
Unless otherwise indicated, 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 the policies becomes
effective.

U.S. Government Obligations

The types of U.S. government obligations in which the Fund may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are backed
by:

o the full faith and credit of the U.S. Treasury;

o the issuer's right to borrow from the U.S. Treasury;

o the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or

o the credit of the agency or instrumentality issuing the obligations.

Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are: Farm Credit System,
including the National Bank for Cooperatives, Farm Credit Banks, and Banks
for Cooperatives; Farmers Home Administration; Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation; Federal National Mortgage
Association; Government National Mortgage Association; and Student Loan
Marketing Association.

Variable Rate U.S. Government Securities

In the case of certain U.S. government securities purchased by the Fund
that carry variable interest rates, these rates will reduce the changes in
the market value of such securities from their original purchase prices.

Accordingly, the potential for capital appreciation or capital
depreciation should not be greater than the potential for capital
appreciation or capital depreciation of fixed interest rate U.S.
government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities.

The Fund may purchase variable rate U.S. government securities upon the
determination by the Trustees that the interest rate as adjusted will
cause the instrument to have a current market value that approximates its
par value on the adjustment date.

Money Market Instruments

The Fund may invest in the following money market instruments:

o instruments of domestic and foreign banks and savings associations
having capital, surplus, and undivided profits of over $100,000,000, or
if the principal amount of the instrument is insured in full by the
Federal Deposit Insurance Corporation ("FDIC");

o commercial paper issued by domestic or foreign corporations rated A-1
by Standard & Poor's Ratings Group ("S&P") Prime-1 by Moody's Investors
Service, Inc., or F-1 by Fitch Investors Service, Inc. or, if unrated,
of comparable quality as determined by the Fund's investment adviser;

o time and savings deposits whose accounts are insured by the Bank
Insurance Fund ("BIF") 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

o bankers' acceptances.

Repurchase Agreements

The Fund requires its custodian to 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 Fund, the Fund could receive less than the
repurchase price on any sale of such securities. In the event that a
defaulting seller of the securities filed for bankruptcy or became
insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are
deemed by the Fund's investment adviser to be creditworthy pursuant to
guidelines established by the Trustees.

Stock Index Futures and Options

The Fund may utilize stock index futures contracts, options, and options
on futures contracts as discussed in the prospectus.

A stock index futures contract is a bilateral agreement which obligates
the seller to deliver (and the purchaser to take delivery of) an amount of
cash equal to a specific dollar amount times the difference between the
value of a specific stock index at the close of trading of the contract
and the price at which the agreement is originally made. There is no
physical delivery of the stocks constituting the index, and no price is
paid upon entering into a futures contract. In general, contracts are
closed out prior to their expiration. The Fund, when purchasing or selling
a futures contract, will initially be required to deposit in a segregated
account in the broker's name with the Fund's custodian an amount of cash
or U.S. government securities approximately equal to 5-10% of the contract
value. This amount is known as "initial margin," and it is subject to
change by the exchange or board of trade on which the contract is traded.
Subsequent payments to and from the broker are made on a daily basis as
the price of the index or the securities underlying the futures contract
fluctuates. These payments are known as "variation margins," and the
fluctuation in value of the long and short positions in the futures
contract is a process referred to as "marking to market." The Fund may
decide to close its position on a contract at any time prior to the
contract's expiration. This is accomplished by the Fund taking an opposite
position at the then prevailing price, thereby terminating its existing
position in the contract. Because both the initial and variation margin
resemble a performance bond or good faith deposit on the contract, they
are returned to the Fund upon the termination of the contract, assuming
that all contractual obligations have been satisfied. Therefore, the
margin utilized in futures contracts is readily distinguishable from the
margin employed in security transactions, since futures contracts margin
does not involve the borrowing of funds to finance the transaction.

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. Put options on stock indices are similar to put
options on stocks except for the delivery requirements. Instead of giving
the Fund the right to make delivery of stock at a specified price, a put
option on a stock index gives the Fund, as holder, the right to receive an
amount of cash upon exercise of the option.

The Fund may also write covered call options. 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. Writing of call options is intended to generate income for
the Fund and thereby protect against price movements in particular
securities in the Fund's portfolio.

The Fund may only: (1) buy listed put options on stock indices; (2) buy
listed put options on securities held in its portfolio; and (3) sell
listed call options either on securities held in its portfolio or on
securities which it has the right to obtain without payment of further
consideration (or has segregated cash in the amount of any such additional
consideration). The Fund will maintain its positions in securities, option
rights, and segregated cash subject to puts and calls until the options
are exercised, closed, or expired.

Reverse Repurchase Agreements

The Fund also may enter into reverse repurchase agreements under certain
circumstances. This transaction is similar to borrowing cash. In a reverse
repurchase agreement, the 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.

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 Fund's investment 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.

Portfolio Turnover

The Fund may trade or dispose of portfolio securities as considered necessary
to meet its investment objective. It is not anticipated that the portfolio
trading engaged in by the Fund will result in its annual rate of portfolio
turnover exceeding 100%. For the fiscal years ended April 30, 1998 and 1997, the
Fund's portfolio turnover rates were 11% and 8%, respectively.

Investment Limitations

Selling Short and Buying on Margin

The Fund will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as are necessary for
clearance of transactions. The deposit or payment by the Fund of initial
or variation margin in connection with futures contracts or related
options transactions is not considered the purchase of a security on
margin.

Issuing Senior Securities and Borrowing Money

The Fund will not issue senior securities except that the Fund may borrow
money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amount borrowed.
The Fund will not purchase any securities while borrowings in excess of 5%
of the value of the Fund's total assets are outstanding.

The Fund will not borrow money or engage in reverse repurchase agreements
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.

Pledging Assets

The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. For the purpose of this limitation, the
following are not deemed to be pledges: margin deposits for the purchase
and sale of futures contracts and related options, and segregation or
collateral arrangements made in connection with options activities.

Investing in Real Estate

The 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.

Investing in Commodities, Commodity Contracts, or Commodity Futures Contracts

The 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.

Underwriting

The 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 securities in accordance with its investment objective,
policies, and limitations.

Diversification of Investments

With respect to securities comprising 75% of the value of its assets, the
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 voting securities of
any one issuer.

Concentration of Investments

The 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
secured by such instruments.
Lending Cash or Securities

The 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 U.S. government obligations, money market
instruments, 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 objective,
policies and limitations.

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

Investing in Securities of Other Investment Companies

The Fund can acquire up to 3% of the total outstanding stock of other
investment companies, and may invest in the securities of affiliated money
market funds as an efficient means of managing the Fund's uninvested cash.
The Fund 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 Fund's shares does not include a sales charge
exceeding 1-1/2 percent. However, these limitations are not applicable if
the securities are acquired in a merger, consolidation, reorganization, or
acquisition of assets. It should be noted that investment companies incur
certain expenses, such as investment advisory, custodian and transfer
agent fees, and therefore, any investment by the Fund in shares of another
investment company would be subject to such duplicate expenses.

Investing in Restricted and Illiquid Securities

The 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 restricted securities not determined by the Trustees to be liquid,
and non-negotiable fixed income time deposits with maturities over seven
days.

Investing in Put Options

The Fund will not purchase put options on securities, other than put
options on stock indices, 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

The 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

The Fund will not invest more than 5% of its assets in warrants.

Purchasing Securities to Exercise Control

The Fund will not purchase securities of a company for purposes of
exercising control or management.

For purposes of its policies and limitations, the 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."

The Fund does not intend to borrow money in excess of 5% of the value of its
total assets during the current year.

<PAGE>

Independence One Mutual Funds Management

Officers and Trustees

Robert E. Baker*
4327 Stoneleigh Road
Bloomfield Hills, MI
Birthdate: May 6, 1930

Trustee

Retired; formerly, Vice Chairman, Chrysler Financial Corporation.

Harold Berry*
Berry Enterprises
290 Franklin Center
29100 Northwestern Highway

Southfield, MI

Birthdate: September 17, 1925

Trustee

Managing Partner, Berry Enterprises; Chairman, Independent Sprinkler Companies,
Inc.; Chairman, Berry, Ziegelman & Company.

Nathan Forbes**
1945 Long Point Drive
Bloomfield Hills, MI
Birthdate: December 5, 1962
Trustee
President, Forbes/Cohen Properties, President and Partner,
The Forbes Company.

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

Trustee

Chairman, Nederlander Enterprises.

<PAGE>

Thomas S. Wilson+
Two Championship Drive
Auburn Hills, MI
Birthdate: October 8, 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

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, Inc.

* Members of the Trust's Audit Committee.

** This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.

+ 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

Trustees' Compensation

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

Robert E. Baker $12,000
Trustee
Harold Berry $12,000
Trustee
Nathan Forbes $0+
Trustee
Harry J. Nederlander $12,000
Trustee
Thomas S. Wilson $12,000
Trustee

+Information is furnished for the period from March 4, 1998 (date of election as
Trustee of the Trust) through April 30, 1998.

Trustee Liability

Massachusetts Partnership Law

Investment Advisory Services

Adviser to the Fund

The Fund's investment adviser is Michigan National Bank (the "Adviser").

The Adviser shall not be liable to the Trust, the Fund, or any shareholder of
the Fund 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.

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, 1998, 1997 and for the period from September 25, 1995 (date of
initial public investment) through April 30, 1996, the Adviser earned $758,348,
$588,469 and $208,897, of which $284,380, $262,493 and $104,448, respectively,
were voluntarily waived.

Sub-Adviser to the Fund

The Fund's sub-adviser is Sosnoff Sheridan Corporation (doing business as
Sosnoff Sheridan Group)(the "Sub-Adviser").

Sub-Advisory Fees

For its sub-advisory services, the Sub-Adviser receives an annual sub-advisory
fee as described in the prospectus.

For the fiscal years ended April 30, 1998, 1997 and for the period from
September 25, 1995 (date of initial public investment) through April 30, 1996,
the Sub-Adviser earned $65,680, $50,260 and $19,633, respectively, none of which
was voluntarily waived.

Brokerage Transactions

The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund 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 Fund 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.
For the fiscal years ended April 30, 1998 and 1997, the Fund paid $20,319 and
$26,727, respectively, in brokerage commissions on brokerage transactions.

Other Services

Trust Administration

Federated Administrative Services, a subsidiary of Federated Investors, Inc.,
provides administrative personnel and services to the Funds for the fees set
forth in the prospectus. For the fiscal years ended April 30, 1998, 1997 and for
the period from September 25 1995 (date of initial public investment) to April
30, 1996, the administrator earned $202,102, $160,370 and $58,574, of which
$80,996, $88,264 and $57,628, respectively, were voluntarily waived.

Custodian

Michigan National Bank, Farmington Hills, Michigan, is custodian for the
securities and cash of the Fund. 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 the Fund and which is payable
monthly. The custodian will also charge transaction fees and out-of-pocket
expenses.

Transfer Agent and Dividend Disbursing Agent

Independent Auditors

The independent auditors for the Fund is 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 procedure for purchasing shares of the Fund is explained in
the prospectus under "Investing in the Fund."

Conversion to Federal Funds

It is the 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 Fund are described in the prospectus.

Determining Market Value of Securities

The market values of the Fund's portfolio securities are determined as follows:

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;

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; or

o for all other securities, at fair value as determined in good faith by
the Trustees.

The Fund 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.

Redeeming Shares

The Fund redeems 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 Fund Shares."

Redemption in Kind

Although the Fund intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio. 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
Fund reserves the right to redeem in kind by delivering those securities it
deems appropriate.

Redemption in kind will be made in conformity with applicable SEC 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 the Fund is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of the Fund's net
asset value during any 90-day period.

Tax Status

The Fund's Tax Status

The Fund expects to pay no federal income tax because it intends 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, the 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 invest in securities within certain statutory limits; and

o distribute to its shareholders at least 90% of its net income earned
during the year.

Shareholders' Tax Status

Shareholders are subject to federal income tax on dividends received as cash or
additional shares. The dividends received deduction for corporations will apply
to ordinary income distributions to the extent the distribution represents
amounts that would qualify for the dividends received deduction to the Fund if
the Fund were a regular corporation, and to the extent designated by the Fund as
so qualifying. These dividends, and any short-term capital gains, are taxable as
ordinary income.

Capital Gains

Long-term capital gains distributed to shareholders will be treated as long-term
capital gains regardless of how long shareholders have held shares.

Total Return

The average annual total returns for the Fund for the 1-year period ended
April 30, 1998 and the period from September 25, 1995 (date of initial public
investment) through April 30, 1998 were 37.20% and 30.25%, respectively.

Advertisements and other sales literature for the Fund may quote total returns
which are calculated on nonstandardized base periods. These total returns also
represent the historic change in the value of an investment in the Fund based on
quarterly reinvestment of dividends over a specified period of time.

Yield

The Fund's yield for the thirty-day period ended April 30, 1998 was
1.06%.

The yield for the Fund is determined each day by dividing the net investment
income per share (as defined by the SEC) earned by the Fund over a thirty-day
period by the maximum offering price per share of the Fund on the last day of
the period. This value is then annualized using semi-annual compounding. This
means that the amount of income generated during the thirty-day period is
assumed to be generated each month over a 12-month period and is reinvested
every six months. The yield does not necessarily reflect income actually earned
by the Fund because of certain adjustments required by the SEC and, therefore,
may not correlate to the dividends or other distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
the performance will be reduced for those shareholders paying those fees.

Performance Comparisons

The Fund's 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 Fund's expenses; and

o various other factors.

The Fund's performance fluctuates on a daily basis largely because net earnings
and the 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 Fund's performance. When comparing performance, investors
should consider all relevant factors, such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may include:

o Standard & Poor's Composite Index of 500 Stocks and Standard & Poor's
100 Index, a composite indices of common stocks in industry,
transportation, and financial and public utility companies can be used
to compare to the total returns of funds whose portfolios are invested
primarily in common stocks. In addition, the Standard & Poor's index
assumes reinvestments of all dividends paid by stocks listed on its
index. Taxes due on any of these distributions are not included, nor
are brokerage or other fees calculated in Standard & Poor's figures.

o Lipper Analytical Services, Inc. ranks funds in various fund categories
by making comparative calculations using total return. Total return
assumes the reinvestment of all capital gains distributions and income
dividends and takes into account any change in the maximum offering
price over a specific period of time. From time to time, the Fund will
quote its Lipper ranking in the "index funds" category in advertising
and sales literature.

o Morningstar, Inc., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.

Advertising and other promotional literature may include charts, graphs and
other illustrations using the Fund's returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment, and may refer to the Fund's
participation in asset allocation or other investment programs. In addition, the
Fund can compare its performance, or performance for the types of securities in
which it invests, 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 Fund 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 Fund. 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,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $4.4 trillion to the more than 6,700 funds available.

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:

(a) Financial Statements:
(1) Financial Statements for Independence One Michigan
Municipal Cash Fund, Independence One Michigan Prime
Money Market Fund, Independence One U.S. Treasury Money
Market Fund, Independence One U.S. Government Securities
Fund, Independence One Fixed Income Fund, and
Independence One Michigan Municipal Bond Fund are
incorporated by reference to the Annual Reports of the
Registrant, dated April 30, 1998 (File Nos. 33-26516 and
811-5752);
(2) Financial Statements for Independence One Equity Plus
Fund are filed in Part A;
(3) Financial Statements for Independence One Small Cap Fund
and Independence One International Equity Fund are to be
filed by amendment.
(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; (2.)
(ii) Conformed copy of Amendment No. 2 to the Declaration of Trust; (2.)
(iii) Conformed copy of Amendment No. 3 to the Declaration of Trust; (4.)
(iv) Conformed copy of Amendment No. 4 to the Declaration of Trust; (6.)
(v) Conformed copy of Amendment No. 5 to the Declaration of Trust; (6.)
(vi) Conformed copy of Amendment No. 6 to the Declaration of Trust; (10.)
(vii) Conformed copy of Amendment No. 8 to the Declaration of Trust; (10.)
(viii) Conformed copy of Certification dated December 6,
1994; (10.) (ix) Conformed copy of Amendment No. 9 to
the Declaration of Trust; (12.)
(x) Conformed copy of Amendment No. 10 to the Declaration of Trust; (+)
- --------------------
+ 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)

<PAGE>

(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.)
(v) Copy of Specimen Certificates for Shares of
Beneficial Interest of Independence One Small Cap
Fund and Independence One International Equity
Fund ; (19.)
(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.)
- --------------------

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)

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)

19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on April 2, 1998. (File Nos. 33-26516
and 811-5752)

<PAGE>

(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 Exhibit H to the Present
Investment Advisory Contract of the Registrant to
add Independence One International Equity Fund;
(19.)
(vi) Conformed copy of Exhibit I to the Present
Investment Advisory Contract of the Registrant to
add Independence One Small Cap Fund; (19.)
(vii) Conformed copy of Investment Sub-Advisory Agreement for
Independence One Equity Plus Fund; (14.)
(viii) Copy of Investment Sub-Advisory Agreement for Independence One
Small Cap Fund; (+)
(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.) (vii) Conformed copy of Exhibit J to the
Distributor's Contract; (13.)
(viii) Conformed copy of Exhibit K 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.)
(a) Conformed Copy of Amendment No. 2 to Exhibit A of the Custodian
Agreement; (19.)
- --------------------
+ All exhibits have been filed electronically.

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)

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)

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)

19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on April 2, 1998. (File Nos. 33-26516
and 811-5752)

<PAGE>

(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
Recordkeeping, and Custody Services Procurement;(10.)
(a) Amendment to Exhibit 1 of the Agreement for Fund Accounting,
Shareholder Recordkeeping, and Custody Services Procurement;
(19.)
(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 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.)
(11) Conformed Copy of Independent Auditors Consent;(+) (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.)
- --------------------
+ 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)

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)

18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 21 on Form N-1A filed on June 25, 1997. (File Nos. 33-26516
and 811-5752)

<PAGE>

(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 Municipal Bond
Fund; (16.)
(vi) Copy of Schedule for Computation of Performance Data
(SEC Yield) for Independence One Michigan Municipal 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; (17.) (19) (i) Conformed copy of Power of
Attorney; (16.)
(ii) Conformed copy of Power of Attorney (adding Nathan
Forbes as Trustee); (+)

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

None
- --------------------
+ 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)

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)

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. 18 on Form N-1A filed on June 28, 1996. (File Nos. 33-26516
and 811-5752)

17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed on August 26, 1996. (File Nos. 33-26516
and 811-5752)

<PAGE>

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class Portfolio name as of June 5, 1998
Shares of
beneficial Independence One Prime 3,403
interest Money Market Fund (Class A)

Independence One Prime 29
Money Market Fund (Class B)

Independence One U.S. 881
Treasury Money Market Fund

Independence One Michigan 883
Municipal Cash Fund

Independence One U.S. 23
Government Securities Fund

Independence One Michigan 13
Municipal Bond Fund

Independence One Equity 144
Plus Fund

Independence One Fixed 13
Income Fund

Independence One Small Cap Fund Not yet effective

Independence One International Not yet
Equity Fund effective

Item 27. Indemnification: (4.)

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 fourth
largest bank holding company in terms of total assets, as of
December 31, 1997, 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 $2.2 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."
- --------------------

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)

<PAGE>

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

Glenn L. Barnes Director Executive General Manager,
Business and Personal Financial
Services, National Australia
Bank Limited.

John S. Carton Director Director, Michigan National
Corporation; Chairman,
President, and CEO,
Pine View, Inc.

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

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

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

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

James A. Williams Chairman Chairman, Michigan National
Corporation; Chairman and
President Williams, Schaefer,
Ruby & Williams.

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

Richard C. Webb Head CFS Head, Commercial Financial
Services, Michigan National
Corporation.

Robert V. Panizzi Controller Michigan National
Corporation.

Brian Black Head of Consumer Head of Consumer Financial
Financial Services Services, Michigan National
Corporation

<PAGE>

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

Susan Barbour Head of Business Head of Business Financial
Financial Services Services, Michigan National
Corporation

Robert Hutchinson Head of Channel Michigan National Corporation
Management

Charles Van Swearingen Chief Financial Chief Financial Officer,
Officer Michigan National Corporation.

Kevin J. Van Solkema Head/Risk Head of Risk
Management,
Management Michigan National Bank.

Errol Talbott Chief Operations Director, Michigan
Officer National Corporation.

Joseph L. Fritzsche Head/Human Head of Human Resources,
Resources Michigan National Corporation.

Kay Thawley Head/Marketing Head of Marketing, Michigan
National Corporation

Mickey Brown Head/Operations Head of Operations and
and Information Information Technology,
Technology Michigan National Corporation.

James B. Meyer Director Director, Michigan National
Corporation, President and
Chief Operating Officer,
Spartan Stores, Inc.

Dr. Donald Argus Director Managing Director, and Chief
Executive Officer, National
Australia Bank Limited.

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 on
November 2, 1995 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, 1997.

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 18.3% of commercial
banking assets in Australia as of August 1997, 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, 1997, Group assets totalled A$202.0 billion, of
which approximately 53.3% was domiciled in Australia, and Group deposits and
borrowings totalled A$128.5 billion, of which approximately 46.7% 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 commercial bank. In its present form, NAB
is the product of the merger in 1981 of The National Bank of Australasia Limited
and Commercial Banking Company of Sydney Limited, the latter Bank being
established in 1834 in New South Wales, Australia.

At September 30, 1997 the Group had 52,226 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, 1997, NAB was the largest financial institution in Australia
(according to the Reserve Bank of Australia Bulletin) based on domestic assets
of $107.3 billion. The Group is the largest Australian banking group based on
its global assets of A$202.0 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, 1997, funds under management amounted to A$4.4 billion. Two of
the Group's banking subsidiaries in the United Kingdom, Yorkshire Bank and
Northern Bank, offer certain insurance and investment products through
subsidiaries, mainly in the areas of funds management and other investment
related products.

At September 1997, 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.

<PAGE>

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
Management Limited and National
Australia Group (UK) Limited; former
Partner, Hedderwick Fookes & Alston,
Solicitors.

Brian Thorley Loton 1992/1988 Chairman, The
Vice-Chairman 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.

<PAGE>

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

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 Management 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.

<PAGE>

Item 29. Principal Underwriters:

(a) Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant:

111 Corcoran Funds; Automated Government Money Trust; 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 Core Trust; 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 Investment Portfolios; Federated Investment Trust; 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.; Fixed Income Securities, 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 Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; Regions
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; The Planters Funds; The Virtus
Funds; The Wachovia Funds; The Wachovia Municipal 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.; and World Investment Series, Inc.

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

<PAGE>

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor 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 Vice President and
Federated Investors Tower President, Federated, Treasurer
Pittsburgh, PA 15222-3779 Securities Corp.

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

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

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

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

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

Laura M. Deger 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

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk 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

David J. Callahan 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

R. Leonard Corton, 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

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Doyle 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

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

John K. Goettlicher 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

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

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

Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael R. Manning 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

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas A. Peters III 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

Richard A. Recker 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 Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Edward L. Smith 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

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Colin B. Starks 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

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

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John F. Wallin 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

Edward J. Wojnarowski 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

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert M. Rossi 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

Leslie K. Platt 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 5800 Corporate Drive
(Registrant) Pittsburgh, PA 15237-7010

Federated Services Company P.O. Box 8609
(Transfer Agent, Dividend Boston, Massachusetts 02266-
Disbursing Agent and Portfolio 8609
Recordkeeper)

Federated Administrative Services Federated Investors Tower
(Administrator) 1001 Liberty Avenue
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
(Custodian) Mail Code 10-52
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.

<PAGE>

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 1993 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 June, 1998.

INDEPENDENCE ONE MUTUAL FUNDS

BY: /s/ Jay S. Neuman
Jay S. Neuman, Secretary
Attorney in Fact for Edward C. Gonzales
June 26, 1998

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/ Jay S. Neuman
Jay S. Neuman Attorney In Fact June 26, 1998
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

Harold Berry* Trustee

Nathan Forbes* Trustee

Harry J. Nederlander* Trustee

Thomas S. Wilson* Trustee

* By Power of Attorney

Exhibit 1(x) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K

INDEPENDENCE ONE MUTUAL FUNDS
Amendment No. 10
to
DECLARATION OF TRUST
dated January 9, 1989

This Declaration of Trust is amended as follows:

A. Revise Section 5 of Article III of the Declaration of Trust to read as
set forth on January 9, 1989; and then

B. Strike the first paragraph of Section 5 of Article III from the
Declaration of Trust and substitute in its place the following:

"Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in Article
XII, Section 8, inter alia, to establish and designate any
additional Series or Class or to modify the rights and preferences
of any existing Series or Class, the Series and Classes of the Trust
shall be and are established and designated as

Independence One Equity Plus Fund
Independence One Fixed Income Fund
Independence One International Equity Fund
Independence One Michigan Municipal Bond Fund
Independence One Michigan Municipal Cash Fund
Investment Shares
Trust Shares
Independence One Prime Money Market Fund
Class A Shares
Class B Shares
Independence One Small Cap Fund
Independence One U.S. Government Securities Fund
Investment Shares
Trust Shares, and
Independence One U.S. Treasury Money Market Fund"

The undersigned hereby certify that the above-stated amendment is a true
and correct Amendment to the Declaration of Trust, as adopted by the Board of
Trustees on March 4, 1998.
WITNESS the due execution hereof this 4th day of March, 1998.

/s/ Robert E. Baker /s/ Harry J. Nederlander
Robert E Baker Harry J. Nederlander

/s/ Harold Berry /s/ Thomas S. Wilson
Harold Berry Thomas S. Wilson

Exhibit 5(viii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

INDEPENDENCE ONE MUTUAL FUNDS

SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made between Michigan National Bank, a national banking
association (hereinafter referred to as "Adviser") and Sosnoff Sheridan
Corporation, an Illinois corporation located in Chicago, Illinois (hereinafter
referred to as the "Sub-Adviser").
WITNESSETH:
That the parties hereto, intending to be legally bound, hereby agree as
follows:1. Notice of Advice: Sub-Adviser hereby agrees to furnish to Adviser in
its capacity as Investment adviser to the Independence One Small Cap Fund (the
"Fund"), a portfolio of the Independence One Mutual Funds ("Trust"), such
investment advice, statistical and other factual information, as may from time
to time be reasonably requested by Adviser for the Fund, which may be offered in
one or more classes of shares ( "Classes"). Sub-Adviser shall furnish such
advice and information to Adviser on a non-discretionary basis. Sub-Adviser
shall not have custody of any funds or securities of the Fund at any time. 2.
Representations of Sub-Adviser. Sub-Adviser hereby represents to Adviser that it
is duly registered as an investment adviser with (a) the United States
Securities and Exchange Commission pursuant to the Investment Advisers Act of
1940, and (b) any state authorities with which such registration necessary in
order to lawfully provide services pursuant to this Agreement. Sub-Adviser
hereby agrees to maintain such registrations in effect for so long as it
continues to provide services pursuant to this Agreement and to notify Adviser
immediately upon termination or revocation of any such registration during such
period. 3. Brokerage. Sub-Adviser may placed orders for the execution of
transactions with or through such brokers-dealers (including floor brokers) or
banks as Adviser may select. Sub-Adviser may suggest broker-dealers or banks to
Adviser; however, Adviser will choose the broker-dealer or banks through which
Sub-Adviser may place orders. Any accounts opened with such broker-dealers or
banks shall be in the name of the Fund. 4. Records and Confirms. Sub-Adviser
will send Adviser a record of the investments and positions of Fund as soon as
reasonably possible after the end of each quarterly period. Copies of
confirmations of transactions executed for the Fund will be sent by the
broker-dealers executing the transactions promptly to the custodian for the Fund
and the Sub-Adviser, if the custodian is other than the broker-dealer.
Otherwise, copies of confirmations of transactions executed will be sent by the
broker-dealers executing the transactions to Sub-Adviser and the Fund.
Sub-Adviser does not assume responsibility for the accuracy of information
furnished by Adviser or any other party. 5. Voting. Unless otherwise
specifically agreed, Sub-Adviser will not be required to take any action, or
render any advice, with respect to the voting of securities held by the Fund. 6.
Confidentiality. All information and advice furnished by either party hereto to
the other shall be treated as confidential and shall not be disclosed to third
parties, unless generally known or otherwise publicly available, and except as
required by regulatory agencies or otherwise by law. 7. Other Clients.
Sub-Adviser acts as adviser to other clients and may give advice, and take
action, with respect to any of those which may differ from the advice given, or
the timing or nature of action taken, with respect to the Fund. Sub-Adviser
shall have no obligation to purchase or sell for the Fund, or to recommend for
purchase or sale by the Fund, any security which Sub-Adviser, its principals,
affiliates or employees may purchase or sell for themselves or for any other
clients. Except as otherwise required by law, Sub-Adviser shall not make any
information about the accounts of its clients available to Adviser or the Fund.
Adviser recognizes that transactions in a specific security or securities may
not be accomplished for all client accounts at the same time or at the same
price. In the performance of Sub-Adviser's services hereunder, Sub-Adviser shall
not be liable for any failure to recommend or effect any purchase or sale, or
other investment or trading strategy on the basis of any information known to
Sub-Adviser where the utilization of such information might, in Sub-Adviser's
opinion, constitute a violation of any federal or state law, rules or
regulations, or the breach of any fiduciary duty or confidential relationship
between Sub-Adviser and any other person or persons. 8. Adviser's
Representations. Adviser represents that it has full authority to grant
Sub-Adviser the authority given to Sub-Adviser under this Agreement.9. Fees. For
its services under this Agreement, Sub-Adviser shall receive from Adviser an
annual fee ("the Sub-Advisory Fee"), as set forth on Exhibit A attached hereto.
Notwithstanding any other provision of this Agreement, the Sub-Adviser may from
time to time and for such periods as it deems appropriate, reduce its
compensation (and, if appropriate, assume expenses of the Fund or Class of the
Fund) to the extent that the Fund's expenses exceed such expense limitation as
the Sub-Adviser may, by notice to the Trust on behalf of the Fund, voluntarily
declare to be effective.10. Term. This Agreement shall begin for the Fund on the
date that the parties execute this Agreement relating to such Fund and shall
continue in effect for the Fund for two years from the date of its execution and
from year to year thereafter, subject to the provisions for termination and all
of the other terms and conditions hereof if: (a) such continuation shall be
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are not parties
to this Agreement or interested persons of any such party (other than as
Trustees of the Trust) cast in person at a meeting called for that purpose; and
(b) Adviser shall not have notified the Trust in writing at least sixty (60)
days prior to the anniversary date of this Agreement in any year thereafter that
it does not desire such continuation with respect to the Fund.11. Termination.
Notwithstanding any provision in this Agreement, it may be terminated at any
time without the payment of any penalty: (a) by the Trustees of the Trust or by
a vote of majority of the outstanding voting securities (as defined in Section
2(a)(42) of the Investment Company Act of 1940 (the "Act")) of the Fund on sixty
(60) days written notice to Adviser; and (b) by Sub-Adviser or Adviser upon
sixty (60) days written notice to the other party to the Agreement.12. Automatic
Termination. This Agreement shall automatically terminate:
(a) in the event of its assignment (as defined in the Act); or
(b) in the event of termination of the Investment Advisory Contract
between the Trust and Adviser ("Investment Advisory Contract") for
any reason whatsoever.
13. Limitation of Authority. Neither Adviser nor Sub-Adviser shall act as an
investment adviser (as such term is defined in the Act) to the Fund except as
provided herein and in the Investment Advisory contract between the Adviser and
the Fund or in such other manner as may be expressly agreed between Adviser and
Sub-Adviser. Provided, however, that if the Adviser or Sub-Adviser shall resign
prior to the end of any term of this Agreement or for any reason be unable or
unwilling to serve for a successive term which has been approved by the Trustees
of the Trust pursuant to the provisions of Paragraph 10 of this Agreement or
Paragraph 6 of the Investment Advisory Contract, the remaining party,
Sub-Adviser of Adviser as the case may be, shall not be prohibited from serving
as an investment advisor to such Fund by reason of the provisions of this
Paragraph 13.14. Notices. Notices regarding termination or other matters of this
Agreement or other matters shall be certified mail or overnight by a nationally
recognized courier and shall be deemed given when received at the addresses
specified below, or at such other address as a party to receive notice may
specify in a notice given in accordance with this provision. Sub-Adviser may
rely on any notice from any person reasonably believed to be genuine and
authorized. If to Sub-Adviser: If to Adviser: Sosnoff Sheridan Corporation
Michigan National Bank 440 South LaSalle Street 27777 Inkster Road Suite 2301
Farmington Hills, Michigan 48334 Chicago, Illinois 60605 Attention: Robert J.
Stapleton, Jr. Attention: Tom Sosnoff 15. Indemnification. (a) (i) In any
threatened, pending or completed action, suit or proceeding to which the
Sub-Adviser, was, is or is threatened to be made a party, in connection with or
relating to the services performed by the Sub-Adviser for the Adviser or the
Fund as contemplated herein, including, without limitation, any breach of any
representations, warranties or convenants made by the Adviser in this Agreement
or any failure by the Adviser to comply with the federal or any state securities
laws or the rules and regulations promulgated thereunder or any other federal or
state law, or any rule or regulation promulgated by a governmental agency or
self-regulatory organization, Adviser shall indemnify and hold harmless the
Sub-Adviser, against any loss, liability, damage, cost and expense (including
reasonable attorneys' and accountants' fees and disbursements) incurred or
suffered by the Sub-Adviser in connection with the investigation, defense or
settlement of any such action, suit or proceeding, only if the acts or omissions
of the Sub-Adviser, did not involve willful misfeasance, gross negligence, bad
faith or reckless disregard of its duties and obligations under this Agreement;
and (ii) In the event that the Sub-Adviser is made a party to any claim, dispute
or litigation or otherwise incurs any loss or expense as a result of or in
connection with the activities or claimed activities of Adviser or its partners,
officers, directors, employees, agents or affiliates unrelated to the
Sub-Adviser or the Sub-Adviser's business, Adviser shall indemnify, defend and
hold harmless the Sub-Adviser against any loss, liability, damage, cost and
expense (including, without limitation, reasonable attorneys' and accountants'
fees and disbursements to be paid as incurred) incurred in connection therewith.
As used is subparagraphs (i) through (ii) above, the term "Sub-Adviser" shall
include the Sub-Adviser' directors, officers, shareholders, employees, agents
and affiliates.(b) (i) In any threatened, pending or contemplated action, suit
or proceeding to which the Adviser, was is or is threatened to be made a party,
in connection with or relating to the services performed by the Sub-Adviser for
the Adviser or the Fund as contemplated herein, including, without limitation,
any breach of any representations, warranties or covenants made by Sub-Adviser
in this Agreement or any failure by Sub-Adviser to comply with the federal or
any state securities laws or the rules and regulations promulgated thereunder or
any other federal or state law, or any rule or regulation promulgated by any
governmental agency or self-regulatory organization, Sub-Adviser shall indemnify
and hold harmless the Adviser, against any loss, liability, damage, cost and
expense (including reasonable attorneys' and accountants' fees and
disbursements) incurred or suffered by the Adviser in connection with the
investigation, defense or settlement of any such action, suit or proceeding,
only if the acts or omissions of the Adviser did not involve willful
misfeasance, gross negligence, bad faith or reckless disregard of its duties and
obligations under this Agreement; and (ii) In the event that the Adviser is made
a party to any claim, dispute or litigation or otherwise incurs any loss or
expense as a result of or in connection with the activities or claimed
activities of Sub-Adviser or its officers, directors, employees, agents or
affiliates unrelated to the Adviser or the Adviser's business, Sub-Adviser shall
indemnify, defend and hold harmless the Adviser against any loss, liability,
damage, cost and expense (including, without limitation, reasonable attorneys'
and accountants' fees and disbursements to be paid as incurred) incurred in
connection therewith. As used in subparagraphs (i) through (ii) above, the term
"Adviser" shall include the Adviser and the Adviser's directors, officers,
shareholders, employees, agents, and affiliates.(c) In the event that a person
entitled to indemnification under Sections 15 (a) and (b) is made a party to an
action, suit or proceeding alleging both matters for which indemnification can
be made hereunder and matters for which indemnification may not be made
hereunder, such person shall be indemnified only for that portion of the loss,
liability, damage, cost or expense incurred in such action, suit or proceeding
which relates to the matters for which indemnification can be made.(d) None of
the indemnifications contained in this Section 15 shall be applicable with
respect to default judgments, confessions of judgment or settlements entered
into by the part(ies) claiming indemnification without the prior written consent
of the party obligated to indemnify such party.(e) The provisions of this
Section 15 shall survive the termination or other expiration of this
Agreement.16.Independent Contractors. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor of Adviser. It is expressly
agreed to by the parties hereto that the relationship created by this Agreement
does not create a partnership or joint venture between the Sub-Adviser and the
Adviser. Except as specifically set forth herein wit respect to the
Sub-Adviser's authority to place orders approved by the Adviser to
broker-dealers or banks for trading the accounts of the Fund, neither party
shall have any authority to bind the other nor shall either party represent to
third parties that it has such authority.17. Liability. Neither the Sub-Adviser
nor any of its agents, employees, principals, directors, or officers or any
person who controls the Sub-Adviser shall be liable to Adviser or its officers,
directors, partners, employees, agents or any person who controls Adviser or any
of its successors, or assigns under this Agreement, except by reason of acts or
omissions in contravention of this Agreement due to willful misfeasance, gross
negligence, bad faith, reckless disregard of its duties and obligations under
this Agreement, or violation of applicable law. Adviser acknowledges that all
transactions made by the Sub-Adviser on behalf of the Fund, shall be for the
account and risk of the Fund. The Sub-Adviser shall have no responsibility for
the execution or clearance of the Fund's trades once orders have been
transmitted to the executing broker-dealer or bank for those trades.
Notwithstanding the foregoing sentences, the federal securities laws impose
liabilities under certain circumstances on persons who act in good faith and
therefore, nothing herein shall in any way constitute a waiver or limitation of
any rights which Adviser may have under the federal securities laws or state
securities laws.18. Disclosure. [] Adviser acknowledges receipt of Sub-Adviser's
Disclosure Statement (Part II of Adviser's Form ADV), as required by Rule 204-3
under the Investment Advisers Act of 1940, not less than 48 hours prior to the
date of execution of this agreement shown below.[] Adviser acknowledges receipt
of Sub-Adviser's Disclosure Statement (Part II of Adviser's Form ADV) less than
48 hours prior to, but not later than, the date of execution of this agreement.
Accordingly, Adviser shall have the option to terminate this agreement without
penalty within five business days after that date of execution; provided,
however, that any investment action taken by Adviser with respect to the Fund
prior to the effective date of such termination shall be at Fund's risk.19.
Entire Agreement: Governing Law. This agreement constitutes the entire agreement
of the parties with respect to the rendering of advice by Sub-Adviser for the
benefit of Adviser and the Fund and can be amended only by written document
signed by the parties. This agreement shall be governed by the internal laws of
the State of Illinois.20. Amendment. This Agreement may be amended from time to
time by agreement of the parties hereto provided that such amendment shall be
approved both by the vote of a majority of Trustees of the Trust, including a
majority of Trustees who are not parties to this Agreement or interested person,
as defined in Section 2(a)(19) of the Act, of any such party at a meeting called
for that purpose, and, where required by Section 15(a)(2) of the Act, by the
holders of a majority of the outstanding voting securities (as defined in
Section 2(a)(42) of the Act) of the Fund.IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed on their behalf by their duty
authorized officers, and their corporate seals affixed hereto this 16th day of
June, 1998.

ATTEST:MICHIGAN NATIONAL BANK

Secretary Director, Investment Services
Lawrence L. Gladchun Robert J. Stapleton, Jr.
SOSNOFF SHERIDAN CORPORATION

Secretary Vice President
Scott D. Sheridan Scott D. Sheridan

<PAGE>

Exhibit A

Independence One Mutual Funds

Independence One Small Cap Fund

Sub-Advisory Agreement

Advisor will pay Sub-Adviser as full compensation for services rendered
hereunder, an annual fee at the rate of 0.05% based on the average daily value
of the equity securities in the Fund. The fee shall be calculated as determined
by the Fund on the last day of each month on which the New York Stock Exchange
is open and shall be payable on a monthly basis, in arrears.This Exhibit duly
incorporates by reference the Sub-Advisory Agreement.Adviser:
(initials)Sub-adviser: (initials)

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

[LOGO of KPMG Peat Marwick LLP]
One Mellon Bank Center Telephone 412 391 9710 Telefax 412 391 8963
Pittsburgh, PA 15219 Telex 7106642199 PMM & CO PGH

INDEPENDENT AUDITORS' CONSENT

The Board of Trustees
Independence One Mutual Funds:

With respect to this Post-Effective Amendment No. 23 to the Registration
Statement (No. 33-26516) on Form N-1A of Independence One Mutual Funds, we
consent to the use of our reports dated June 12, 1998, 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 Prime Money Market Fund; Independence One U.S.
Treasury Money Market Fund; Independence One Michigan Municipal
Cash Fund; Independence One Equity Plus Fund; Independence One
U.S. Government Securities Fund; Independence One Fixed Income
Fund; and Independence One Michigan Municipal Bond Fund.

/s/KPMG Peat Marwick LLP

Pittsburgh, Pennsylvania
June 24, 1998

[LOGO] Member Firm of KPMG International

Exhibit 19(ii) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of INDEPENDENCE ONE MUTUAL FUNDS and the
Deputy General Counsel of Federated Services Company, and each of them, their
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.

SIGNATURES TITLE DATE

/s/ Nathan Forbes Trustee 6-1-98
Nathan Forbes

Sworn to and subscribed before me this 1st day of June, 1998

/s/ Kim Y. Thayer
Kim Y. Thayer
Notary Public, Oakland County, MI
My Comm. Expires Mar. 20, 2001

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> Independence One Funds
Independence One Prime
Money Market Fund
Class A Shares
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 470,192,628
<INVESTMENTS-AT-VALUE> 470,192,628
<RECEIVABLES> 1,955,091
<ASSETS-OTHER> 59
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 472,147,778
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 902,709
<TOTAL-LIABILITIES> 902,709
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 471,245,069
<SHARES-COMMON-STOCK> 389,521,875
<SHARES-COMMON-PRIOR> 337,836,340
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 389,521,875
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 26,325,908
<OTHER-INCOME> 0
<EXPENSES-NET> 2,480,130
<NET-INVESTMENT-INCOME> 23,845,778
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 23,845,778
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18,466,487
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,741,778,522
<NUMBER-OF-SHARES-REDEEMED> 2,700,548,575
<SHARES-REINVESTED> 10,455,588
<NET-CHANGE-IN-ASSETS> 62,241,093
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,861,933
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,643,838
<AVERAGE-NET-ASSETS> 465,477,635
<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> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> Independence One Funds
Independence One Prime Money
Market Fund
Class B Shares
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 470,192,628
<INVESTMENTS-AT-VALUE> 470,192,628
<RECEIVABLES> 1,955,091
<ASSETS-OTHER> 59
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 472,147,778
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 902,709
<TOTAL-LIABILITIES> 902,709
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 471,245,069
<SHARES-COMMON-STOCK> 81,723,194
<SHARES-COMMON-PRIOR> 71,167,636
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 81,723,194
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 26,325,908
<OTHER-INCOME> 0
<EXPENSES-NET> 2,480,130
<NET-INVESTMENT-INCOME> 23,845,778
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 23,845,778
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,379,291
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 385,822,201
<NUMBER-OF-SHARES-REDEEMED> 378,652,322
<SHARES-REINVESTED> 3,385,679
<NET-CHANGE-IN-ASSETS> 62,241,093
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,861,933
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,643,838
<AVERAGE-NET-ASSETS> 465,477,635
<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> 0.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

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

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 320,632,721
<INVESTMENTS-AT-VALUE> 320,632,721
<RECEIVABLES> 710,538
<ASSETS-OTHER> 612
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 321,343,871
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 775,528
<TOTAL-LIABILITIES> 775,528
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 320,568,343
<SHARES-COMMON-STOCK> 320,568,343
<SHARES-COMMON-PRIOR> 245,289,366
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 320,568,343
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,643,043
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 13,078,210
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 13,078,210
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13,078,210
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,653,184,433
<NUMBER-OF-SHARES-REDEEMED> 2,585,884,188
<SHARES-REINVESTED> 7,978,732
<NET-CHANGE-IN-ASSETS> 75,278,977
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,062,526
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,564,833
<AVERAGE-NET-ASSETS> 265,597,253
<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> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

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

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 97,939,145
<INVESTMENTS-AT-VALUE> 97,939,145
<RECEIVABLES> 4,954,965
<ASSETS-OTHER> 203
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 102,894,313
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 124,588
<TOTAL-LIABILITIES> 124,588
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 102,769,725
<SHARES-COMMON-STOCK> 102,769,725
<SHARES-COMMON-PRIOR> 84,019,313
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 102,769,725
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,448,607
<OTHER-INCOME> 0
<EXPENSES-NET> 458,539
<NET-INVESTMENT-INCOME> 2,990,068
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,990,068
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,990,068
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 746,963,146
<NUMBER-OF-SHARES-REDEEMED> 730,595,042
<SHARES-REINVESTED> 2,382,308
<NET-CHANGE-IN-ASSETS> 18,750,412
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 375,284
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 605,211
<AVERAGE-NET-ASSETS> 93,820,932
<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> 0.49
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 04
<NAME> Independence One Funds
Independence One U.S.
Government Fund

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 67,248,239
<INVESTMENTS-AT-VALUE> 70,176,815
<RECEIVABLES> 977,995
<ASSETS-OTHER> 52
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 71,154,862
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 288,079
<TOTAL-LIABILITIES> 288,079
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68,425,283
<SHARES-COMMON-STOCK> 6,807,039
<SHARES-COMMON-PRIOR> 7,206,247
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (487,076)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,928,576
<NET-ASSETS> 70,866,783
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,552,418
<OTHER-INCOME> 0
<EXPENSES-NET> 440,240
<NET-INVESTMENT-INCOME> 4,112,178
<REALIZED-GAINS-CURRENT> 567,403
<APPREC-INCREASE-CURRENT> 2,548,205
<NET-CHANGE-FROM-OPS> 7,227,786
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,112,178
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,008,867
<NUMBER-OF-SHARES-REDEEMED> 1,447,352
<SHARES-REINVESTED> 39,277
<NET-CHANGE-IN-ASSETS> (1,016,487)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,054,479)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 507,916
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 766,758
<AVERAGE-NET-ASSETS> 72,481,808
<PER-SHARE-NAV-BEGIN> 9.980
<PER-SHARE-NII> 0.580
<PER-SHARE-GAIN-APPREC> 0.430
<PER-SHARE-DIVIDEND> 0.580
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.410
<EXPENSE-RATIO> 0.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

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

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 81,216,258
<INVESTMENTS-AT-VALUE> 81,692,183
<RECEIVABLES> 2,730,927
<ASSETS-OTHER> 21,225
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,444,335
<PAYABLE-FOR-SECURITIES> 3,970,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 132,111
<TOTAL-LIABILITIES> 4,102,111
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 80,085,396
<SHARES-COMMON-STOCK> 8,008,395
<SHARES-COMMON-PRIOR> 7,234,918
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (219,097)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 475,925
<NET-ASSETS> 80,342,224
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,966,452
<OTHER-INCOME> 0
<EXPENSES-NET> 429,225
<NET-INVESTMENT-INCOME> 4,537,227
<REALIZED-GAINS-CURRENT> (16,975)
<APPREC-INCREASE-CURRENT> 1,766,893
<NET-CHANGE-FROM-OPS> 6,287,145
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,537,227
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,968,892
<NUMBER-OF-SHARES-REDEEMED> 1,583,847
<SHARES-REINVESTED> 388,432
<NET-CHANGE-IN-ASSETS> 9,458,679
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (202,122)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 574,565
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 812,268
<AVERAGE-NET-ASSETS> 76,244,698
<PER-SHARE-NAV-BEGIN> 9.800
<PER-SHARE-NII> 0.590
<PER-SHARE-GAIN-APPREC> 0.230
<PER-SHARE-DIVIDEND> 0.590
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.030
<EXPENSE-RATIO> 0.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

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

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 19,622,946
<INVESTMENTS-AT-VALUE> 20,365,240
<RECEIVABLES> 1,436,721
<ASSETS-OTHER> 18,698
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,820,659
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 794,141
<TOTAL-LIABILITIES> 794,141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,261,694
<SHARES-COMMON-STOCK> 2,041,080
<SHARES-COMMON-PRIOR> 2,350,116
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,530
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 742,294
<NET-ASSETS> 21,026,518
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,202,794
<OTHER-INCOME> 0
<EXPENSES-NET> 199,764
<NET-INVESTMENT-INCOME> 1,003,030
<REALIZED-GAINS-CURRENT> 91,171
<APPREC-INCREASE-CURRENT> 709,048
<NET-CHANGE-FROM-OPS> 1,803,249
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,003,030
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 358,787
<NUMBER-OF-SHARES-REDEEMED> 669,163
<SHARES-REINVESTED> 1,340
<NET-CHANGE-IN-ASSETS> (2,456,427)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (68,641)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 184,611
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 375,846
<AVERAGE-NET-ASSETS> 24,405,843
<PER-SHARE-NAV-BEGIN> 9.990
<PER-SHARE-NII> 0.420
<PER-SHARE-GAIN-APPREC> 0.310
<PER-SHARE-DIVIDEND> 0.420
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.300
<EXPENSE-RATIO> 0.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<S> <C>

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

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Apr-30-1998
<PERIOD-END> Apr-30-1998
<INVESTMENTS-AT-COST> 111,607,946
<INVESTMENTS-AT-VALUE> 209,399,448
<RECEIVABLES> 479,213
<ASSETS-OTHER> 25,309
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 209,903,970
<PAYABLE-FOR-SECURITIES> 42,123
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 108,703
<TOTAL-LIABILITIES> 150,826
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 109,067,271
<SHARES-COMMON-STOCK> 11,496,485
<SHARES-COMMON-PRIOR> 12,060,154
<ACCUMULATED-NII-CURRENT> 84,895
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,809,476
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 97,791,502
<NET-ASSETS> 209,753,144
<DIVIDEND-INCOME> 2,987,137
<INTEREST-INCOME> 236,911
<OTHER-INCOME> 0
<EXPENSES-NET> 789,353
<NET-INVESTMENT-INCOME> 2,434,695
<REALIZED-GAINS-CURRENT> 8,506,760
<APPREC-INCREASE-CURRENT> 48,813,788
<NET-CHANGE-FROM-OPS> 59,755,243
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,497,120
<DISTRIBUTIONS-OF-GAINS> 7,427,247
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,818,823
<NUMBER-OF-SHARES-REDEEMED> 2,818,913
<SHARES-REINVESTED> 436,421
<NET-CHANGE-IN-ASSETS> 40,424,921
<ACCUMULATED-NII-PRIOR> 147,320
<ACCUMULATED-GAINS-PRIOR> 1,729,963
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 758,348
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,154,729
<AVERAGE-NET-ASSETS> 189,034,104
<PER-SHARE-NAV-BEGIN> 14.040
<PER-SHARE-NII> 0.220
<PER-SHARE-GAIN-APPREC> 4.850
<PER-SHARE-DIVIDEND> 0.220
<PER-SHARE-DISTRIBUTIONS> 0.650
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 18.240
<EXPENSE-RATIO> 0.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>