STAR U.S. GOVERNMENT INCOME FUND
(A PORTFOLIO OF STAR FUNDS)
Supplement to Prospectus dated January 31, 1994
Please add the following as a fifth paragraph under the sub-
section entitled "Other Acceptable Investments" on pages 4 and 5:
"o debt securities of foreign governments, foreign
governmental agencies or supranational institutions.
In addition, the Fund will also invest in investment
quality debt securities issued by foreign corporations.
These securities will be rated in one of the four
highest rating categories by the above-mentioned
nationally recognized statistical rating organizations,
or, if unrated, will be of comparable quality in the
judgment of the adviser. (The Fund may not invest more
than 5% of its assets in foreign debt securities)."
August 30, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated
Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
854911500
005947 (8/94)
STAR U.S. GOVERNMENT INCOME FUND
(A PORTFOLIO OF STAR FUNDS)
Supplement to Statement of Additional Information dated January 31, 1994
Please add the following immediately before the sub-section
entitled "Restricted and Illiquid Securities" on page 2 and
insert the heading "Investments in Foreign Securities" into the
Table of Contents:
"Investments in Foreign Securities. The Fund may
invest in foreign securities. Investments in foreign
securities involve special risks that differ from those
associated with investments in domestic securities.
The risks associated with investments in foreign
securities relate to political and economic
developments abroad, as well as those that result from
the differences between the regulation of domestic
securities and issuers and foreign securities and
issuers. These risks may include, but are not limited
to, expropriation, confiscatory taxation, currency
fluctuations, withholding taxes on interest,
limitations on the use or transfer of Fund assets,
political or social instability and adverse diplomatic
developments. In addition, there are restrictions on
foreign investments in other jurisdictions and there
tends to be difficulty in obtaining judgments from
abroad and effecting repatriation of capital invested
abroad. Delays could occur in settlement of foreign
transactions, which could adversely affect shareholder
equity. Moreover, individual foreign economies may
differ favorably or unfavorably from the domestic
economy in such respects as growth of gross national
product, the rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments
position."
August 30, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated
Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
854911500
005948 (8/94)
