FIRSTAR STELLAR FUNDS, 497, 1999-05-12

FIRSTAR STELLAR FUNDS
497, 1999-05-12

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497(c)
1940 Act File No. 811-5762
MONEY
MARKET FUNDS

PROSPECTUS

March 31, 1999

FIRSTAR STELLAR TREASURY FUND

FIRSTAR STELLAR TAX-FREE MONEY MARKET FUND

FIRSTAR STELLAR OHIO TAX-FREE MONEY MARKET FUND

FIRSTAR STELLAR FUNDS (LOGO)

TABLE OF CONTENTS

THE FUNDS
Overview of the Funds.............................................3
TREASURY FUND.....................................................4
TAX-FREE MONEY MARKET FUND........................................6
OHIO TAX-FREE MONEY MARKET FUND...................................9
Management of the Funds...........................................12
Distribution of Shares............................................12
YOUR ACCOUNT INFORMATION
Description of Classes............................................13
Price of Shares...................................................14
Purchasing Shares.................................................14
Selling Shares....................................................16
Exchanging Shares.................................................17
Dividends, Capital Gain Distributions and Taxes...................18
ADDITIONAL INFORMATION
Financial Highlights..............................................20
Year 2000 Issue...................................................22
FOR MORE INFORMATION
See the last page for more information about the funds.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

OVERVIEW

GOAL OF THE MONEY MARKET FUNDS

The goal of the Firstar Stellar money market funds is to provide current income
while preserving capital. The advantage of the TAX-FREE MONEY MARKET FUND is
that the interest income is exempt from federal income tax. The benefit of the
OHIO TAX-FREE MONEY MARKET FUND is that the interest income is exempt from both
federal and Ohio state income tax.

STRATEGIES OF THE FUNDS

The TREASURY FUND invests exclusively in short-term U.S. Treasury obligations.
The TAX-FREE MONEY MARKET FUND and the OHIO TAX-FREE MONEY MARKET FUND primarily
invest in short-term municipal securities. Each of the funds strives to
maintain a share price of $1.00.

PRINCIPAL RISKS COMMON TO THESE FUNDS

The main risks of investing in the funds are:

O INTEREST RISKS: The rate of income will vary from day to day depending on
short-term interest rates. It is possible that a major change in interest
rates could cause the value of your investment to decline.

O CREDIT RISKS: The funds can also be affected by changes in the credit
quality rating or changes in the issuer's financial condition. A default on
a security or a repurchase agreement held by one of the funds could cause the
value of your investment to decline.

O Although the funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the funds.

AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF FIRSTAR BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.

WHO MAY WANT TO INVEST

These funds may be appropriate for people who:

O want to save money rather than "invest"
O require stability of principal
O prefer to receive income with relatively fewer risks

TREASURY FUND

INVESTMENT GOAL

The TREASURY FUND seeks to achieve stability of principal and current income
consistent with stability of principal.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund intends to achieve its investment goal by investing exclusively in
short-term U.S. Treasury obligations that have a maturity of 397 days or less
from the date of purchase. The fund may purchase repurchase agreements
collateralized by U.S. Treasury obligations. The fund intends to invest in the
agreements that provide for repurchase within 397 days from the date of
acquisition. The average maturity of these securities is 120 days or less. The
average maturity, however, of all the securities in the fund's portfolio will be
90 days or less on a dollar-weighted basis. Securities subject to repurchase
agreements are marked to market on a daily basis. U.S. Treasury obligations are
issued by the U.S. government and are fully guaranteed as to principal and
interest by the United States government. The fund may also retain assets in
cash and may purchase U.S. Treasury obligations on a when-issued or delayed
delivery basis.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

REPURCHASE AGREEMENTS

Arrangements in which banks, broker/dealers and other financial institutions
sell securities to the fund and agree to repurchase them at a certain time and
price within one year.

REPURCHASE AGREEMENT RISKS One of the risks of investing in repurchase
agreements is that the seller may not repurchase the securities from the fund,
which may result in the fund selling the security for less than the agreed upon
price. Another risk of repurchase agreements is that the seller may default or
file for bankruptcy. That could mean the fund might have to wait through
lengthy court actions before selling the securities.

WHEN ISSUED/DELAYED DELIVERY

Securities with payment and delivery scheduled for a future time.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTION RISKS One of the risks of
investing in when-issued or delayed delivery transactions is if the seller
chooses not to complete the transaction, the fund could miss an advantageous
price or yield.

Another risk is that because settlement dates may be a month or more after
entering into the transactions, the market values of the securities may have
dropped from the agreed upon purchase price. However, the fund may cancel a
commitment to purchase securities prior to settlement if the fund's investment
adviser believes it is appropriate.

The fund may enter into transactions to sell its purchase commitments to third
parties at current market rates and simultaneously acquire other commitments to
purchase similar securities at later dates. The fund may realize short-term
profits or losses on the sale of these kinds of commitments.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the TREASURY FUND'S
returns. The bar chart indicates the risks of investing in the fund by showing
the changes in the fund's performance from year to year (on a calendar year
basis). The table shows the fund's average annual returns for one-year,
five-year and since the fund's inception ended December 31, 1998. The fund's
past performance is not necessarily an indication of how the fund will perform
in the future.
TREASURY FUND - C SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1990 7.64%
1991 5.49%
1992 3.26%
1993 2.54%
1994 3.51%
1995 5.26%
1996 4.77%
1997 4.86%
1998 4.61%

BEST QUARTER: Q3 1989 2.08%
WORST QUARTER: Q4 1993 0.62%

- ----------------------------------------------------------------------------
Average annual total return 1 Year 5 Year Since
through 12/31/98 inception
- ----------------------------------------------------------------------------
Treasury Fund C Shares1<F1> 4.61% 4.60% 4.93%
Y Shares2<F2> 4.77% N/A 4.85%
- ----------------------------------------------------------------------------
For up-to-date yield information, please call 1-800-677-FUND.

1<F1> C Shares commenced operations April 15, 1989.
2<F2> Y Shares commenced operations March 25, 1997.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

- ----------------------------------------------------------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS Y CLASS C
- ----------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) None None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None None
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON REINVESTED DIVIDENDS None None
REDEMPTION FEE None None
EXCHANGE FEE None None

- ----------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS Y CLASS C
- ----------------------------------------------------------------------------
MANAGEMENT FEES 0.50% 0.50%
DISTRIBUTION AND SERVICE (12B-1) FEES1<F3> None 0.25%
OTHER EXPENSES2<F4> 0.43% 0.43%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.93% 1.18%
- ----------------------------------------------------------------------------
1<F3> Y shares are not subject to a Rule 12b-1 Plan. C shares of the
TREASURY FUND can pay up to 0.25% of average daily net assets for 12b-1
fees. However, the investment adviser has chosen to waive a portion of
this fee so that the actual amount imposed is 0.15% of average daily
net assets. The adviser can reduce the waiver at any time.
2<F4>"Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,

2.Your investment has a 5% return each year, and

3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------
CLASS Y $95 $296 $515 $1,143
CLASS C $120 $375 $649 $1,432

Class descriptions are on page 13.

TAX-FREE MONEY MARKET FUND

INVESTMENT GOAL

The TAX-FREE MONEY MARKET FUND seeks to provide current income exempt from
federal regular income tax consistent with stability of principal.

WHAT IS FEDERAL REGULAR INCOME TAX?

Federal regular income tax refers to normal income tax that most U.S. taxpayers
compute and pay each year. It does not include the federal alternative minimum
tax.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund intends to achieve its investment goal by investing its assets so that
at least 80% of its annual interest income is exempt from federal regular income
tax and not subject to the alternative minimum tax. The fund's portfolio
consists of municipal securities maturing in 397 days or less. The average
maturity, however, of all the securities in the fund's portfolio will be 90 days
or less on a dollar-weighted basis.

The municipal securities in which the fund invests are primarily debt
obligations issued by or on behalf of states, territories and possessions of the
United States, and any political subdivision or financing authority of any of
these, the income from which is exempt from federal regular income tax.

When selling securities, the adviser considers three factors: (1) Have the
objectives of the fund been met? (2) Has the attractiveness of the securities
deteriorated? (3) Has the adviser's outlook changed? If the adviser can answer
each question positively, then the adviser will sell the securities.

EXAMPLES OF MUNICIPAL SECURITIES
--------------------------------
O tax and revenue anticipation notes issued to finance working capital needs in
anticipation of receiving taxes or other revenues

O bond anticipation notes that are intended to be refinanced through a later
issuance of longer term bonds

O municipal commercial paper and other short-term notes

O variable rate demand notes

O municipal bonds and leases

O construction loan notes insured by the Federal Housing Association and
financed by the Federal or Government National Mortgage Associations

O participation interests in any of the above

PARTICIPATION INTERESTS The fund may purchase interests in municipal
securities from financial institutions such as commercial and investment banks,
savings associations and insurance companies. Financial institutions provide
guarantees, letters of credit or insurance to the fund on the underlying
municipal securities.

MUNICIPAL LEASES The fund may also invest in municipal leases, which are
obligations issued by state and local governments to finance the acquisition of
equipment and facilities. Municipal leases may take the form of a lease, an
installment purchase contract, a conditional sales contract or a participation
interest. Municipal leases may be considered illiquid.

VARIABLE RATE DEMAND NOTES The fund may invest in variable rate demand notes,
which are obligations with variable or floating interest rates. The notes
provide the fund with the right to tender the security for repurchase at its
stated principal amount plus accrued interest. These securities usually bear
interest at a rate that allow the securities to trade at par. Most variable
rate demand notes allow the fund to demand the repurchase of the security on not
more than 7 days notice. Other notes only permit the fund to tender the
security at the time of each interest rate adjustment or at other fixed
intervals. The fund treats variable rate demand notes as maturing on the later
of the date of the next interest adjustment or the date on which the fund may
next tender the security for repurchase.

TEMPORARY INVESTMENTS From time to time, the fund may invest in tax-exempt or
taxable short-term temporary investments when the fund's investment adviser
determines that market conditions call for a temporary defensive posture.
During such times, it is possible for the fund not to reach its investment
objective. Although the fund is permitted to make taxable, temporary
investments, the adviser currently has no intention to generate income subject
to federal regular income tax.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

MUNICIPAL SECURITIES RISKS One of the risks of investing in municipal
securities is that the yield produced by such securities depends on a variety of
factors including the general conditions of the short-term municipal note market
and the municipal bond market. Other factors include the size of the particular
offering, the maturity of the obligations and the rating of the issue. The
ability of the fund to achieve its investment objective also depends on the
ability of the issuers of the municipal securities to meet their obligations for
the payment of interest and principal when due.

CREDIT RISKS Another risk is that the fund may invest more than 25% of its
total assets in securities credit-enhanced by banks. Credit-enhanced securities
are investments backed 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 causing the fund to lose money.

TAX RISKS The fund may be more adversely impacted by changes in tax rates and
policies than other funds. Because interest income on municipal obligations is
normally not subject to regular federal income taxation, the attractiveness of
municipal obligations in relation to other investment alternatives is affected
by changes in federal income tax rates applicable to, or the continuing federal
income tax-exempt status of such interest income. Therefore, any proposed or
actual changes in such rates or exempt status can significantly affect the
demand for and supply, liquidity and marketability of municipal obligations,
which could in turn affect the fund's ability to acquire and dispose of
municipal obligations at desirable yield and price levels.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the TAX-FREE MONEY
MARKET FUND'S returns. The bar chart indicates the risks of investing in the
fund by showing the changes in the fund's performance from year to year (on a
calendar year basis). The table shows the fund's average annual returns for
one-year, five-year, and since the fund's inception ended December 31, 1998.
The fund's past performance is not necessarily an indication of how the fund
will perform in the future.

TAX-FREE MONEY MARKET FUND - C SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1992 2.44%
1993 1.88%
1994 2.29%
1995 3.33%
1996 2.86%
1997 3.04%
1998 2.79%

BEST QUARTER: Q3 1991 1.01%
WORST QUARTER: Q1 1994 0.43%

- -------------------------------------------------------------------------------
Average annual total return
through 12/31/98 1 Year 5 Year Since Inception
- -------------------------------------------------------------------------------
Tax-Free Money Market Fund1<F5> 2.79% 2.86% 2.79%
- -------------------------------------------------------------------------------
For up-to-date yield information, please call 1-800-677-FUND.

1<F5> C Shares commenced operations March 15, 1991.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

- -------------------------------------------------------------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS C
- -------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None

- -------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS C
- -------------------------------------------------------------------------------
MANAGEMENT FEES1<F6> 0.55%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F7> 0.25%
OTHER EXPENSES3<F8> 0.50%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.30%
- -------------------------------------------------------------------------------
1<F6> The fund's investment adviser voluntarily waives a portion of this fee
each year. The adviser can terminate this voluntary waiver at any time. With
the waiver for the year ended November 30, 1998, the management fee was 0.45%.

2<F7> Currently, C shares of the fund are not paying or accruing Rule 12b-1
fees. The class can pay up to 0.25% of average daily net assets as a Rule
12b-1 fee to the fund's distributor if a Y class of shares is created.

3<F8> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above, plus
(2) an annual shareholder servicing fee of 0.25% of average daily net assets.
For the foreseeable future, the fund plans to limit the shareholder servicing
fee to an annual rate of 0.10% of average daily net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,

2.Your investment has a 5% return each year, and

3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------
CLASS C $132 $412 $713 $1,568
Class descriptions are on page 13.

OHIO TAX-FREE MONEY MARKET FUND

INVESTMENT GOAL

The OHIO TAX-FREE MONEY MARKET FUND seeks to provide current income exempt from
federal income tax and the personal income taxes imposed by the state of Ohio
and Ohio municipalities consistent with stability of principal.

EXAMPLES OF OHIO MUNICIPAL SECURITIES
-------------------------------------
. tax and revenue anticipation notes issued to finance working capital needs in
anticipation of receiving taxes or other revenues
. bond anticipation notes that are intended to be refinanced through a later
issuance of longer term bonds
. municipal commercial paper and other short-term notes
. variable rate demand notes
. municipal bonds and leases
. participation interests in any of the above

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund intends to achieve its investment goal by investing its assets so that
at least 80% of its annual interest income is exempt from federal income tax and
not subject to the alternative minimum tax and the personal income taxes
imposed by the state of Ohio and Ohio municipalities. In addition, the fund
will invest its assets so that under normal circumstances, at least 65% of the
value of its total assets will be invested in Ohio municipal securities exempt
from federal regular income tax and Ohio State income tax. The fund's portfolio
consists of municipal securities maturing in 397 days or less. The average
maturity, however, of all the securities in the fund's portfolio will be 90 days
or less on a dollar-weighted basis.

The municipal securities in which the fund invests are primarily debt
obligations issued by or on behalf of Ohio and its political subdivisions and
financing authorities and obligations of other states, territories and
possessions of the United States and any political subdivision or financing
authority of any of these. The income from such obligations must be exempt from
federal income tax (including alternative minimum tax) and the personal income
taxes imposed by the State of Ohio and other municipalities.

PARTICIPATION INTERESTS The fund may purchase interests in municipal
securities from financial institutions such as commercial and investment banks,
savings associations and insurance companies. Financial institutions provide
guarantees, letters of credit or insurance to the fund on the underlying
municipal securities.

VARIABLE RATE DEMAND NOTES The fund may invest in variable rate demand notes,
which are obligations with variable or floating interest rates. The notes
provide the fund with the right to tender the security for repurchase at its
stated principal amount plus accrued interest. These securities usually bear
interest at a rate that allow the securities to trade at par. Most variable
rate demand notes allow the fund to demand the repurchase of the security on not
more than 7 days' notice. Other notes only permit the fund to tender the
security at the time of each interest rate adjustment or at other fixed
intervals. The fund treats variable rate demand notes as maturing on the later
of the date of the next interest adjustment or the date on which the fund may
next tender the security for repurchase.

TEMPORARY INVESTMENTS From time to time, the fund may invest in tax-exempt or
taxable short-term temporary investments when the fund's investment adviser
determines that market conditions call for a temporary defensive posture.
During such times, it is possible for the fund not to reach its investment
objective. Although the fund is permitted to make taxable temporary
investments, the adviser currently has no intention to generate income subject
to federal regular income tax.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

MUNICIPAL SECURITIES RISKS One of the risks of investing in municipal
securities is that the yield produced by such securities depends on a variety of
factors. Factors affecting the yield include the general conditions of the
short-term municipal note market and the municipal bond market. Other factors
are the size of the particular offering, the maturity of the obligations and the
rating of the issue. The ability of the fund to achieve its investment
objective also depends on the ability of the issuers of the municipal securities
to meet their obligations for the payment of interest and principal when due.

NON-DIVERSIFICATION RISKS Investing in the fund has added risks because the
fund is a non-diversified fund under the Investment Company Act of 1940, as
amended. Compared with other mutual funds, this fund may invest a greater
percentage of its assets in a more limited number of issues concentrated in one
state, which as a result, can increase the fund's volatility. The value of the
fund's securities can be impacted by economic or political developments
affecting certain securities.

OHIO STATE SPECIFIC RISKS Ohio's economy is largely composed of manufacturing
which is concentrated in the automobile sector and other durable goods. The
exposure to these industries, particularly the auto sector, leaves Ohio
vulnerable to an economic slowdown associated with business cycles.
Furthermore, population growth, as in many states around the Great Lakes, has
been stagnant.

The fund's concentration in securities issued by Ohio and its political
subdivisions provides a greater level of risk than a fund whose assets are
diversified across numerous states and municipal issuers. The ability of Ohio
or its municipalities to meet their obligations will depend on:

(1)the availability of tax and other revenues;
(2)economic, political and demographic conditions within the state; and
(3)the underlying fiscal condition of the state, its counties and its
municipalities.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the OHIO TAX-FREE
MONEY MARKET FUND'S returns. Although the fund has been in operation for only
one full calendar year, the bar chart is intended to give some indication of the
risks of an investment in the fund. The table shows the fund's average annual
returns for one-year and since the fund's inception ended December 31, 1998.
The fund's past performance is not necessarily an indication of how the fund
will perform in the future.

OHIO TAX-FREE MONEY MARKET FUND - C SHARES
CALENDAR YEAR RETURN AS OF 12/31
1998 2.85%

BEST QUARTER: Q2 1998 0.78%
WORST QUARTER: Q1 1998 0.63%

- ------------------------------------------------------------------
Average annual total return 1 Year Since
through 12/31/98 Inception
- ------------------------------------------------------------------
Ohio Tax-Free Money Market Fund1<F9> 2.85% 2.85%
- ------------------------------------------------------------------
For up-to-date yield information, please call 1-800-677-FUND.

1<F9> C Shares commenced operations December 2, 1997.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

- ---------------------------------------------------------------------------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS C
- ---------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None
- ---------------------------------------------------------------------------

- ---------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES
DEDUCTED FROM FUND ASSETS) CLASS C
- ---------------------------------------------------------------------------
MANAGEMENT FEES1<F10> 0.55%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F11> 0.25%
OTHER EXPENSES3<F12> 0.74%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.54%
- ---------------------------------------------------------------------------
1<F10> The fund's investment adviser voluntarily waives a portion of this fee
eachy ear. The adviser can terminate this voluntary waiver at any time. With
the waiver for the year ended November 30, 1998, the management fee was 0.15%.
2<F11> Currently, C shares of the fund are not paying or accruing Rule 12b-1
fees. The class can pay up to 0.25% of average daily net assets as a Rule 12b-1
fee to the distributor if a Y class of shares is created.
3<F12> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above, plus
(2) an annual shareholder servicing fee of 0.25% of average daily net assets.
For the foreseeable future, the fund plans to limit the shareholder servicing
fee to an annual rate of 0.10% of average daily net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,

2.Your investment has a 5% return each year, and

3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------
CLASS C $157 $486 $839 $1,834
Class descriptions are on page 13.

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISER

The investment adviser for the funds is Firstar Bank, N.A. The adviser is
located at 425 Walnut Street, Cincinnati, Ohio 45202. The investment decisions
made by Firstar Bank are subject to direction of the funds' board of trustees.
(The Statement of Additional Information contains more information regarding the
board of trustees.) The adviser conducts investment research and supervision
for the funds and is responsible for the purchase and sale of securities for the
funds' portfolios. The adviser charges an annual fee for its services and
voluntarily waives a portion of those fees as shown:

The amounts shown represent a percentage of each fund's average daily net
assets.

Before After
waivers waivers
- ------------------------------------------------------------------------------
Treasury Fund 0.50% 0.50%
Tax-Free Money Market Fund 0.55% 0.45%
Ohio Tax-Free Money Market Fund 0.55% 0.15%
- ------------------------------------------------------------------------------

The adviser was wholly owned by StarBanc Corporation until November 20, 1998
when StarBanc Corporation merged with Firstar Corporation. The new entity
retained the "Firstar" name and Firstar Corporation is now the parent company of
the adviser. Firstar Bank, N.A. was known as Star Bank, N.A. prior to the
merger.

The merger has produced no significant changes to the management of the adviser.
Together, the two banks have become the 21st largest bank in the United States
and have blended an expertise of trust administration and investments together
with extensive knowledge in the mutual fund industry. Firstar Bank's assets
under management, including mutual funds, have a market value in excess of $12
billion.

FUND ADMINISTRATION, FUND ACCOUNTING, DIVIDEND DISBURSEMENT, AND CUSTODY
SERVICES

Firstar Mutual Fund Services, LLC, an affiliate of the funds' investment
adviser, provides administrative, accounting and dividend disbursement services
to the Firstar Stellar Funds and is located in Milwaukee, Wisconsin. Firstar
Bank, N.A., the funds' investment adviser, also serves as custodian for the
funds.

DISTRIBUTION OF SHARES

DISTRIBUTOR

Edgewood Services, Inc. is the distributor for shares of the funds. Edgewood is
based in Pittsburgh, Pennsylvania and is the distributor for a number of
investment companies around the country.

RULE 12B-1 PLAN

The funds have adopted a Rule 12b-1 Plan under the Investment Company Act of
1940. Under the 12b-1 Plan, class C shares may pay up to an annual rate of
0.25% of the average daily net asset value of shares to Edgewood. Edgewood uses
this fee to finance activities that promote the sale of the funds' shares. Such
activities include, but are not necessarily limited to, advertising, printing
and mailing prospectuses to persons other than current shareholders, printing
and mailing sales literature, and compensating underwriters, dealers and sales
personnel.

Currently, the TAX-FREE MONEY MARKET FUND and the OHIO TAX-FREE MONEY MARKET
FUND are not paying or accruing Rule 12b-1 fees. These funds will only start
paying the Rule 12b-1 fee when a second "Y" class of shares is created for the
funds. Whenever Edgewood deems it appropriate, Edgewood may, from time to time,
voluntarily reduce its compensation under the Rule 12b-1 Plan to the extent
expenses of the shares exceed a certain limit. Rule 12b-1 fees are paid out of
fund assets on an on-going basis. Over time, these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.

Edgewood may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers and broker/dealers as agents to
provide sales or administrative services for their clients or customers who
beneficially own shares of the funds. Financial institutions will receive fees
from the distributor based upon shares owned by their clients or customers.
Edgewood will determine the schedule of such fees and the basis upon which such
fees will be paid.

DESCRIPTION OF CLASSES

CLASS C SHARES

Class C shares are regular retail shares and may be purchased by individuals or
IRAs. With class C shares, you pay no sales charge when you invest. In the
case of the TREASURY FUND, an annual Rule 12b-1 fee (as discussed previously) is
assessed against the shares of the fund. All of the money market funds sell
class C shares.

CLASS Y SHARES

The Y class of shares is available only to Firstar Bank's trust or institutional
customers. With class Y shares, not only do you not pay any sales charges, you
also do not pay a Rule 12b-1 fee. Similar to the C shares, however, the Y
shares pay investment management fees and other fees. Currently, only the
TREASURY FUND sells class Y shares.

PRICE OF SHARES

NAV=
Assets- Liabilites
--------------------
# outstanding shares

WHAT SHARES COST

Shares of the funds are sold at their net asset value (NAV) next determined
after an order is received. The funds attempt to stabilize the net asset value
of their shares at $1.00 by valuing the portfolio securities using the amortized
cost method. The net asset value is calculated by subtracting the total
liabilities of each fund from the fund's total assets. The difference is
divided by the number of fund shares outstanding. The funds cannot guarantee
that their net asset value will always remain at $1.00 per share. There is no
sales charge imposed by any of the funds.

The net asset value for each fund is determined on the days the New York Stock
Exchange is open, Monday through Friday, except on:

o New Year's Day o Good Friday o Labor Day
o Martin Luther King, Jr.'s Day o Memorial Day o Thanksgiving Day
o Presidents' Day o Independence Day o Christmas Day

The net asset value for the TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY
MARKET FUND is determined as of 10:00 a.m. (Eastern time). The net asset value
for the TREASURY FUND is determined as of 2:00 p.m. (Eastern time).

PURCHASING SHARES

OPENING AN ACCOUNT

To open an account, first determine if you are buying class C shares or class Y
shares (See page 13 for class descriptions.) The minimum initial investment
amounts for each fund are as follows:

- --------------------------------------------------------------------------------
Class C Shares
- --------------------------------------------------------------------------------
o $1,000 for individuals
o $500 for Education IRA customers
o $25 for Firstar Bank Connections Group Banking customers and Firstar
Bank employees and members of their immediate family, participants in the
Firstar Bank Student Finance 101 Program who establish an automatic investment
program and persons contributing to SIMPLE IRAs

- --------------------------------------------------------------------------------
Class Y Shares
- --------------------------------------------------------------------------------
o $1,000 for trust or institutional customers of Firstar Bank ($1,000
may be determined by combining the amount in all mutual fund accounts you
maintain with Firstar Bank)

ADDITIONAL INVESTMENTS MAY BE MADE IN ANY AMOUNT.

TIMING OF REQUESTS

The price per share will be the net asset value next computed after the time
your request is received in good order and accepted by the funds or by the
funds' authorized agent. All requests (telephone orders and federal funds wire)
received in good order by the funds before the following times, will be executed
on the same day. Requests received after the following times will be executed
the next business day.

DAILY DEADLINES FOR PURCHASE ORDERS
-----------------------------------
TREASURY FUND 2:00 p.m. (Eastern time)
TAX-FREE MONEY MARKET FUND 10:00 a.m. (Eastern time)
OHIO TAX-FREE MONEY MARKET FUND 10:00 a.m. (Eastern time)

RECEIPT OF ORDERS

Shares may only be purchased on days the New York Stock Exchange and the Federal
Reserve wire system are open for business. Your order will be considered
received after your check is converted into federal funds and received by
Firstar Bank. If you are paying with federal funds (wire), your order will be
considered received when the federal funds are received by Firstar Bank.

When making a purchase request, make sure your request is in good order. "Good
order" means your lpurchase request includes:
o the name of the fund
o the dollar amount of shares to be purchased
o purchase application or investment stub
o check payable to Firstar Stellar Funds

METHODS OF BUYING

<TABLE>

------------------------------------------------------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BY TELEPHONE
(Firstar Bank customers only) Call Firstar Stellar Funds at 1-800-677-FUND Call Firstar Stellar Funds at
to place the order. (NOTE: For security reasons, 1-800-677-FUND to place the order.
requests by telephone will be recorded.) (NOTE: For security reasons, requests by
telephone will be recorded.)
------------------------------------------------------------------------------------------------------------------------------
BY MAIL Make your check payable to "Firstar Stellar Fill out the investment stub from an
Funds." Forward the check and your application account statement, or indicate the fund
to the address below. No third party checks name and account number on your check.
will be accepted. If your check is returned Make your check payable to "Firstar
for any reason, a $25 fee will be assessed Stellar Funds." Forward the check and
against your account. stub to the address below.
------------------------------------------------------------------------------------------------------------------------------
BY FEDERAL FUNDS WIRE Forward your application to Firstar Stellar Call Firstar Stellar Funds at
Funds at the address below. Call 1-800-677-FUND to notify of incoming
1-800-677-FUND to obtain an account number. wire. Use the following instructions:
Wire funds using the instructions to the right.
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit:(name of fund, share class)
(name/title on the account)
(account #)
------------------------------------------------------------------------------------------------------------------------------
THROUGH SHAREHOLDER SERVICE To purchase shares for another investor, call To purchase shares for another investor,
ORGANIZATIONS Firstar Stellar Funds at 1-800-677-FUND. call Firstar Stellar Funds at
1-800-677-FUND.
------------------------------------------------------------------------------------------------------------------------------
VIA A SWEEP ACCOUNT Refer to your sweep account or other account Refer to your sweep or other account
agreement. Call 1-800-677-FUND to obtain agreement for information on the frequency
further information. of automatic purchase, redemptions and
statement and confirmation schedules.
------------------------------------------------------------------------------------------------------------------------------
BY EXCHANGE Call 1-800-677-FUND to obtain exchange Call 1-800-677-FUND to obtain exchange
information. See page 17. information. See page 17.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

ADDRESS FOR FIRSTAR STELLAR FUNDS

You should use the following addresses when sending documents by mail or by
overnight delivery:

BY MAIL BY OVERNIGHT DELIVERY
- ------- ----------------------
Firstar Stellar Funds Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202

NOTE: The funds do not consider the U.S. Postal Service or other independent
delivery services to be their agents. Therefore, deposits in the mail or with
such services, or receipt at Firstar Mutual Fund Services, LLC's post office box
of purchase applications or redemption requests do not constitute receipt by
Firstar Mutual Fund Services, LLC or the funds.

SELLING SHARES

METHODS OF SELLING

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
TO SELL SOME OR ALL OF YOUR SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
BY TELEPHONE Call Firstar Stellar Funds at 1-800-677-FUND to sell any amount of shares.
(NOTE: For security reasons, requests by telephone will be recorded.)
- ------------------------------------------------------------------------------------------------------------------------------------
BY MAIL Send a letter of instruction to Firstar Stellar Funds requesting the dollar
amount or the number of shares that you wish to redeem. The letter should
contain the fund's name, the account number and the number of shares or the
dollar amount of shares to be redeemed. Be sure to have all shareholders
sign the letter. If your account is an IRA, the signature must be guaranteed
and your request must indicate whether or not 10% withholding should apply.
Requests submitted without an election whether or not to withhold will be
subject to withholding.
- ------------------------------------------------------------------------------------------------------------------------------------
BY FEDERAL FUNDS WIRE Call Firstar Stellar Funds at 1-800-677-FUND to request the amount of money
you want. Be sure to have all necessary information from your bank. Your
bank may charge a fee to receive wired funds.
- ------------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER SERVICE ORGANIZATION Consult your account agreement for information on redeeming shares.
- ------------------------------------------------------------------------------------------------------------------------------------
VIA A SWEEP ACCOUNT If you invested through a sweep account, your account may be subject to
automatic redemptions when your deposit account falls below the required
minimum. Refer to your sweep or other account agreement for more
information.
- ------------------------------------------------------------------------------------------------------------------------------------
BY EXCHANGE Call Firstar Stellar Funds at 1-800-677-FUND. See page 17 for further
information.
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

TIMING OF REQUESTS

All requests received in good order by Firstar Bank before the following times
will be executed on the same day. Requests received after the following times
will be executed the next business day.

DAILY DEADLINES FOR REDEMPTION ORDERS
-------------------------------------
TREASURY FUND 2:00 p.m. (Eastern time)
TAX-FREE MONEY MARKET FUND 10:00 a.m. (Eastern time)
OHIO TAX-FREE MONEY MARKET FUND 10:00 a.m. (Eastern time)

WHEN REDEMPTION PROCEEDS ARE MAILED

If your redemption request is in good order, Firstar Stellar Funds will normally
send your redemption proceeds to you on the next business day and no later than
7 calendar days after receipt of your proper redemption request. Checks are
sent to the address on record.

If you purchase shares using a check and soon after request a redemption,
Firstar Stellar Funds will honor the redemption request, but will not mail the
proceeds until your purchase check has cleared (usually within 12 days).

When making a redemption request, make sure your request is in good order. "Good
order" means your letter of instruction includes:
o the name of the fund
o the number of shares or the dollar amount of shares to be redeemed
o signatures of all registered shareholders exactly as the shares are
registered (guaranteed for IRAs)
o the account registration number

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, Firstar Stellar
Funds may mail you a notice if your account falls below $1,000 requesting that
you bring the account back up to $1,000 or close it out. If you do not respond
to the request within 30 days, Firstar Stellar Funds may close the account on
your behalf and send you the proceeds. If you purchase shares through a sweep
account, you are not subject to any investment minimum. If you have an account
through a shareholder service organization, consult your account agreement for
information on accounts with low balances.

SIGNATURE GUARANTEES

You will need your signature guaranteed if:
o you are redeeming shares from an IRA account
o you request a redemption to be made payable to a person not on record
with the funds, or
o you request that a redemption be mailed to an address other than that on
record with the funds

You may obtain signature guarantees from most trust companies, commercial banks
or other eligible guarantor institutions.

EXCHANGING SHARES

You can exchange shares between the Firstar Stellar Funds within the same class.
You also may exchange class C shares (no-load money market funds) for class A or
B shares of any Firstar Stellar Fund. However, you may not exchange shares from
class B to class C and then to class A.

Exercising the exchange privilege is really two transactions: a sale of one fund
and the purchase of another.

Exercising the exchange privilege is really two transactions: a sale of one fund
and the purchase of another. The same policies that apply to purchases and
sales apply to exchanges, including minimum investment amounts. Keep in mind
that some funds may have higher sales charges than other funds and you may have
to pay the difference in fees. Exchanges also have the same tax consequences as
ordinary sales and purchases causing you to realize short or long-term capital
gains or losses. Generally, exchanges may only be made between identically
registered accounts unless you send written instructions with a signature
guarantee.

The SAI contains more information on exchanges. You may also call
1-800-677-FUND to learn more about exchanges or other Firstar Stellar
Funds.

DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES

DIVIDENDS

The funds declare dividends on a daily basis and pay them to you on a monthly
basis. Unless you provide a written request to receive payments in cash, your
dividends will automatically be reinvested in additional shares of the fund.
Dividends paid in cash will be mailed to you via the U.S. Postal Service. Keep
in mind that undeliverable checks or checks not deposited within six months will
be reinvested in additional shares of the fund at the then current net asset
value. Dividends are earned on the day shares of the fund are purchased. If you
are investing through a shareholder service organization, consult your account
agreement for dividend payment information. Dividends paid in cash or in
additional shares are treated the same for tax purposes.

CAPITAL GAINS

If any of the funds realize capital gains, you could earn more dividends.
Capital losses could result in a decrease in dividends for you. If a fund
realizes net long-term capital gains (not very common), the fund would
distribute them every 12 months.

TAX INFORMATION

The funds will pay no federal income tax because they expect to meet certain
Internal Revenue Code requirements. The funds will be treated as single,
separate entities for federal income tax purposes so that income (including
capital gains, if any) and losses realized by one fund will not be combined for
tax purposes with those realized by the other funds. Each of the funds expects
their distributions to consist primarily of ordinary income, but for the two
tax-free funds, the distributions will be tax-free for the most part. The funds
will provide you with detailed tax information for reporting purposes.

You should consult your own tax adviser regarding tax consequences under your
state and local laws.

An exchange is not a tax-free transaction. An exchange of shares pursuant to
the funds' exchange privilege is treated the same as an ordinary sale and
purchase for federal income tax purposes and you will realize a capital gain or
loss.

ADDITIONAL TAX INFORMATION

TREASURY FUND

If you are a shareholder of the TREASURY FUND, unless you are exempt from having
to pay federal income taxes, you are required to pay federal income taxes on any
dividends and other distributions (including capital gain distributions) you
receive.

TAX-FREE MONEY MARKET FUND

Interest Income on Municipal Bonds If you are a shareholder of the TAX-FREE
MONEY MARKET FUND, you are not required to pay regular federal income tax on any
dividends you receive from the fund that represent net interest on tax-exempt
municipal bonds. However, you may have to pay federal alternative minimum taxes
on dividends representing net interest earned on some municipal bonds.

The alternative minimum tax (AMT) applies when it exceeds the regular federal
income 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. The Tax Reform
Act of 1986 treats interest on certain private activity bonds as a tax
preference item for both individuals and corporations. Unlike traditional
governmental purpose municipal bonds, which finance roads, schools, libraries,
prisons and other public facilities, private activity bonds provide benefits to
private parties.

The fund is permitted to purchase all types of municipal bonds, including
private activity bonds. As a result, if the fund purchased any private activity
bonds, a portion of the fund's dividends may be treated as a tax preference
item. The fund's investment adviser, however, currently has no intention to
purchase these types of bonds.

If you are an individual shareholder, your AMT could amount to 28% of your
alternative minimum taxable income. If you are a corporate shareholder, all
dividends of the fund which represent interest on municipal bonds may be subject
to the 20% corporate AMT because the dividends are included in your corporate
"adjusted current earnings."

Corporate alternative minimum taxable income includes 75% of the excess pre-tax
adjusted current earnings over its alternative minimum taxable income as a tax
preference item. Adjusted current earnings are based on the corporation's
earnings and profits. Earnings and profits generally include the full amount of
any fund dividend. However, alternative minimum taxable income does not include
the portion of the fund's dividends attributable to municipal bonds that are not
private activity bonds. As a result, the difference will be included in the
calculation of the corporation's AMT.

Interest Income on Temporary Investments If the fund invests in certain
temporary investments, you may have to pay regular federal income tax on the
dividends you receive. This is because dividends representing net interest
income earned on some temporary investments and any realized net short-term
gains are taxed as ordinary income. Examples of these temporary investments
include:

O obligations issued by or on behalf of municipal or corporate issuers
having the same quality and maturity characteristics as municipal
securities purchased by the fund;

O instruments issued by banks or other depository institutions which have
capital, surplus and undivided profits in excess of $100,000,000 at the
time of investment;

O repurchase agreements; and

O prime commercial paper rated A-1 by S&P's Ratings Group, Prime-1 by
Moody's or Fitch or other short-term credit instruments.

OHIO TAX-FREE MONEY MARKET FUND

If you are a shareholder of the OHIO TAX-FREE MONEY MARKET FUND, you may still
have to pay taxes on income earned in states other than Ohio. You should
consult your tax adviser regarding your investment under state and local laws.

Interest Income on Municipal Bonds As a shareholder of the fund, you are not
required to pay federal regular income tax on any dividends you receive from the
fund that represent net interest on tax-exempt municipal bonds. However, you
may have to pay federal alternative minimum taxes on dividends representing net
interest earned on some municipal bonds. You should read the above discussion
on alternative minimum taxable income.

For both corporate and individual shareholders, under Ohio laws, distributions
made by the fund will not be subject to Ohio income taxes to the extent that the
distributions qualify as exempt interest dividends under the Internal Revenue
Code. Also, the distributions must represent:

1.interest on obligations of Ohio or its subdivisions which is exempt from
regular federal income tax; or

2.interest or dividends from obligations issued by the U.S. and its
territories or possessions or by any authority, commission or
instrumentality of the U.S. which is exempt from state income tax under
federal laws.

However, if the fund invests in types of obligations that do not fall in the
above categories, you will have to pay Ohio income taxes on the distributions
you receive.

For corporate shareholders, distributions made by the fund will not be subject
to Ohio corporate franchise tax to the extent that the distributions qualify as
exempt interest dividends under the Internal Revenue Code and represent:

1.interest on obligations of Ohio or its subdivisions which is exempt from
regular federal income tax; or

2.net interest income from obligations issued by the U.S. and its
territories or possessions or by any authority, commission or
instrumentality of the U.S. which is exempt from state income tax under
federal laws.

Exempt-interest dividends that represent interest from obligations issued by
Ohio or its political subdivisions will be exempt from any Ohio municipal income
tax (even if the municipality is permitted under Ohio laws to levy a tax on
intangible income).

O obligations issued by or on behalf of municipal or corporate issuers;
O obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities;
O instruments issued by a U.S. bank or other depository institutions which
have capital, surplus and undivided profits in excess of $100,000,000 at
the time of investment; and
O repurchase agreements.

FINANCIAL HIGHLIGHTS

The financial highlights tables set forth below are intended to help you
understand the funds' financial performance for the past 5 years or for the
funds' period of operations, as the case may be. Most of the information
reflects financial results with respect to a single fund share. The total
returns in the tables represent the rates that an investor would have earned
(or lost) on an investment in a fund (assuming reinvestment of all dividends
and distributions). This information has been audited by Arthur Andersen
LLP, whose report, along with the funds' financial statements, are included
in the funds' annual report, which is available upon request.

<TABLE>
TREASURY FUND1<F13>
(Class C and Y Shares) Year ended November 30,
1998 1997 1996 1995 1994
----------------------------------------------------------------------
Class C Class Y Class CClass Y2<F14>Class C Class C Class C
<S> <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
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.05 0.05 0.05 0.03 0.05 0.05 0.03
Net gains or losses on securities
(both realized and unrealized) 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total from investment operations 0.05 0.05 0.05 0.03 0.05 0.05 0.03
Less distributions
Dividends (from net investment income) (0.05) (0.05) (0.05) (0.03) (0.05) (0.05) (0.03)
Distributions (from capital gains) 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total distributions (0.05) (0.05) (0.05) (0.03) (0.05) (0.05) (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Total return3<F15> 4.69% 4.89% 4.85% 3.37% 4.80% 5.23% 3.30%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $542,430$1,123,144 $469,400 $659,296 $829,259 $654,963 $358,766
Gross ratio of expenses to average net assets5<F17> 1.08% 0.93% 0.93% 0.92%4<F16>0.90% 0.91% 0.90%
Net ratio of expenses to average net assets6<F18> 0.88% 0.73% 0.73% 0.72%4<F16>0.70% 0.71% 0.70%
Gross ratio of net income to average net assets5<F17> 4.38% 4.53% 4.53% 4.67%4<F16>4.49% 4.94% 3.04%
Net ratio of net income to average net assets6<F18> 4.58% 4.73% 4.73% 4.87%4<F16>4.69% 5.14% 3.24%
1<F13> The Treasury Fund has been operating since April 15, 1989.
2<F14> Reflects operations for the period from March 25, 1997 (commencement of share class) to November 30, 1997.
3<F15> Based on net asset value.
4<F16> Annualized.
5<F17> Before waivers and reimbursements.
6<F18> After waivers and reimbursements.
</TABLE>

<TABLE>
TAX-FREE MONEY MARKET FUND1<F19>
(Class C Shares) Year ended November 30,
---------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.03 0.03 0.03 0.03 0.02
Net gains or losses on securities
(both realized and unrealized) 0.00 0.00 0.00 0.00 0.00
Total from investment operations 0.03 0.03 0.03 0.03 0.02
Less distributions
Dividends (from net investment income) (0.03) (0.03) (0.03) (0.03) (0.02)
Distributions (from capital gains) 0.00 0.00 0.00 0.00 0.00
Total distributions (0.03) (0.03) (0.03) (0.03) (0.02)
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------
Total return2<F20> 2.83% 3.02% 2.91% 3.32% 2.15%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $134,556 $126,348 $153,256 $167,356 $135,427
Gross ratio of expenses to average net assets3<F21> 1.05% 0.99% 1.00% 0.96% 0.95%
Net ratio of expenses to average net assets4<F22> 0.75% 0.69% 0.70% 0.66% 0.65%
Gross ratio of net income to average net assets3<F21> 2.49% 2.66% 2.57% 2.96% 1.82%
Net ratio of net income to average net assets4<F22> 2.79% 2.96% 2.87% 3.26% 2.12%

1<F19> The Tax-Free Money Market Fund has been operating since March 15, 1991.
2<F20> Based on net asset value.
3<F21> Before waivers and reimbursements.
4<F22> After waivers and reimbursements.
</TABLE>

OHIO TAX-FREE MONEY MARKET FUND1<F23>
(Class C Shares) Year ended November 30,
1998
- ---------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00
- ---------------------------------------------------------------------------
Income from investment operations
Net investment income 0.03
Net gains or losses on securities
(both realized and unrealized) 0.00
Total from investment operations 0.03
Less distributions
Dividends (from net investment income) (0.03)
Distributions (from capital gains) 0.00
Total distributions (0.03)
- ---------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00
- ---------------------------------------------------------------------------
Total return2<F24> 2.61%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $57,614
Gross ratio of expenses to average net assets4<F26> 1.143<F25>
Net ratio of expenses to average net assets5<F27> 0.69%3<F25>
Gross ratio of net income to average net assets4<F26> 2.36%3<F25>
Net ratio of net income to average net assets5<F27> 2.81%3<F25>

1<F23> The Ohio Tax-Free Money Market Fund has been operating since December 2,
1997.
2<F24> Based on net asset value.
3<F25> Annualized
4<F26> Before waivers and reimbursements.
5<F27> After waivers and reimbursements.

YEAR 2000 ISSUE

Like all financial service providers, the funds' investment adviser, the
distributor and other third party service providers utilize systems that may be
affected by year 2000 transition issues and other date related issues. The
services provided to you and the funds by these service providers depend on the
smooth functioning of their computer systems and those of other parties they
deal with. Many computer software systems in use today cannot distinguish the
year 2000 from the year 1900 because of the way dates are encoded and
calculated. Such an event could have a negative impact on handling securities
trades, payments of interest and dividends, pricing and account services.
Although there can be no assurance at this time that there will be no adverse
impact on the funds, the funds' service providers have advised the funds that
they have been actively working on necessary changes to their computer systems
to prepare for the year 2000. The funds' service providers expect that their
systems, and those of other parties they deal with, will be adapted in time for
that event. However, there can be no assurance that the computer systems of the
companies in which the funds invest will be timely converted or that the value
of such investments will not be adversely affected by the year 2000 issue.

(FIRSTAR STELLAR
FUNDS LOGO)

FOR MORE INFORMATION

YOU MAY OBTAIN THE FOLLOWING AND OTHER INFORMATION ON THE
FIRSTAR STELLAR FUNDS FREE OF CHARGE:

O ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The annual and semi-annual reports provide the funds'
most recent financial statements and portfolio listings.
The annual report contains a discussion of the market
conditions and investment strategies that affected the
funds' performances during the last fiscal year.

O STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED MARCH 31,
1999
The SAI is incorporated into this prospectus by reference
(i.e., legally made a part of this prospectus). The SAI
provides more details about the funds' policies and
management.

TO RECEIVE ANY OF THESE DOCUMENTS OR PROSPECTUSES ON THE
FIRSTAR STELLAR FUNDS:

BY TELEPHONE

1-800-677-FUND

BY MAIL:

Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

ON THE INTERNET:

Text only versions of fund documents can be viewed online
or downloaded from: http://www.sec.gov and http://www.
firstarstellarfunds.com

You may review and obtain copies of fund information
(including the SAI) at the SEC Public Reference Room in
Washington, D.C. Please call 1-800-SEC-0330 for
information relating to the operation of the Public
Reference Room. Copies of the information may be
obtained for a fee by writing the Public Reference
Section, Securities and Exchange Commission, Washington,
D.C. 20549-6009.

Investment Company Act File # 811-05762

For Investor Services or to Request Information
1-800-677-FUND
1-414-287-3808
Firstar Stellar Funds
615 East Michigan Street
P.O. Box 701
Milwaukee, WI 53201-0701
www.firstarstellarfunds.com

FIRSTAR STELLAR FUNDS (LOGO)

SFMMP-99

FIRSTAR STELLAR FUNDS (LOGO)

BOND FUNDS PROSPECTUS

March 31, 1999

FIRSTAR STELLAR STRATEGIC INCOME FUND

FIRSTAR STELLAR U.S. GOVERNMENT INCOME FUND

FIRSTAR STELLAR INSURED TAX-FREE BOND FUND

TABLE OF CONTENTS

THE FUNDS
Overview of the Funds 3
STRATEGIC INCOME FUND 4
U.S. GOVERNMENT INCOME FUND 7
INSURED TAX-FREE BOND FUND 10
Management of the Funds 13
Distribution of Shares 14

YOUR ACCOUNT INFORMATION
Description of Classes 14
Price of Shares 15
Purchasing Shares 17
Selling Shares 19
Exchanging Shares 20
Dividends, Capital Gain Distributions and Taxes 21

ADDITIONAL INFORMATION
Financial Highlights 22
Year 2000 Issue 25

FOR MORE INFORMATION
See the last page for more information about the funds.

OVERVIEW

GOAL AND STRATEGIES OF THE BOND FUNDS

The general goal of the Firstar Stellar bond funds is to provide you with
current income by investing in fixed-income securities. The STRATEGIC INCOME
FUND attempts to generate high current income by investing in short to
long-term, investment grade U.S. government, fixed-income securities corporate
fixed-income securities, structured fixed-income securities, international
bonds, real estate investment trusts, domestic equity securities and money
market securities. The U.S. GOVERNMENT INCOME FUND provides current income and
capital appreciation by investing primarily in short to long-term, investment
grade securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities. The INSURED TAX-FREE BOND FUND invests in intermediate to
long-term, investment grade insured municipal securities so that most of its
annual interest income is exempt from federal income tax.

PRINCIPAL RISKS COMMON TO THESE FUNDS

The main risks of investing in the funds are:

o MARKET RISKS: The funds' investments are subject to bond market risk which
means that the value of the funds' investments may go up or down. The market
value of fixed-income securities is significantly affected by changes in
interest rates. Generally, when interest rates decline, the market value
rises and when interest rates increase, the market value of fixed-income
securities declines. If the value of the funds' investments go down, you may
lose money.

o MATURITY RISKS: The longer a bond's maturity, the greater the risk and the
higher its yield. Conversely, the shorter a bond's maturity, the lower the
risk and the lower its yield.

o BOND SELECTION RISKS: The funds' investments are subject to the risks
inherent in individual bond selections. The bonds selected by the investment
adviser may decline in value or not increase in value when the bond market in
general is rising.

o HIGH-YIELD BOND RISKS: Funds that invest in medium- and lower-quality bonds
(generally referred to as junk bonds) involve greater risks, including the
increased possibility that the bond's issuer may not be able to make its
payments of interest and principal. If that happens, the fund's share price
would decrease and its income distributions would be reduced.

o CREDIT RISKS: Individual issues of fixed-income securities may also be
subject to the credit risk of the issuer. This means that the underlying
company may experience unanticipated financial problems causing it to be
unable to meet its payment obligations.

AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF FIRSTAR BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.

WHO MAY WANT TO INVEST

These funds may be appropriate for people who:

o wish to invest for the long term
o want to earn income on investments considered more stable than stocks
o are looking for a fixed-income component to complete their portfolio
o have long-term goals such as planning for retirement

These funds may not be appropriate for people who:

o have short-term financial goals

STRATEGIC INCOME FUND

INVESTMENT GOAL

The STRATEGIC INCOME FUND'S investment objective is to generate high current
income.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

THE FUND'S INVESTMENT CATEGORIES:

1.U.S. government & corporate fixed-income securities
2.International securities
3.Real estate investment trusts
4.Domestic equity securities
5.Money market securities
6.Structured fixed-income securities

The fund attempts to achieve its investment goal by investing its assets in a
core group of securities as shown in the box to the right. The investment
adviser's strategy is to spread the investment portfolio over several securities
categories to reduce the impact of any drastic market movements affecting one
category. With that in mind, the fund invests approximately 40% of its assets
in short to long-term, investment grade U.S. government and corporate
fixed-income securities (category 1). The fund invests between 0% to 20% of its
assets in each of the other categories (categories 2 through 6). Overall, the
fund will have at least 65% of its assets invested in securities that produce
income.

To aid in selecting securities, the adviser will use the following techniques:
o fundamental and quantitative analysis to select equity securities, which
includes examining price/earnings ratios, historical and projected earnings
growth rates, historical sales growth rates, historical return on equity,
market capitalization, and average daily trading volume;
o use of ratings assigned by nationally recognized statistical rating
organizations (when needed);
o credit research;
o review of issuers' historical performance;
o examination of issuers' dividend growth record;
o consideration of market trends; and
o hedging through the use of options and futures.

DOMESTIC FIXED-INCOME SECURITIES As noted above, the fund will invest in
domestic corporate debt obligations, obligations of the United States, and
notes, bonds, and discount notes of U.S. government agencies or
instrumentalities. The adviser selects bonds based on their potential interest
rates and yield in relation to other bonds of similar quality and maturity. The
fund will only invest in bonds which are rated Baa or higher by Moody's or rated
BBB or higher by S&P or Fitch. If the securities are unrated, the adviser must
consider them to be of similar quality to the rated securities before the fund
may invest in them.

U.S. GOVERNMENT SECURITIES The fund may invest in securities issued and/or
guaranteed as to the payment of principal and interest by the U.S. government or
its agencies or instrumentalities. U.S. government securities 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.

INTERNATIONAL SECURITIES The fund may invest in international securities
(including other investment companies that invest primarily in international
securities). The international securities include equity securities of non-U.S.
companies and corporate and government fixed-income securities denominated in
currencies other than U.S. dollars. These securities may be traded domestically
or abroad through various stock exchanges, American Depositary Receipts or
International Depositary Receipts (ADRs or IDRs). The international
fixed-income and corporate securities include ADRs, IDRs, and government
securities of other nations and must be rated Baa or better by Moody's or BBB or
better by S&P. If the securities are unrated, the adviser must determine that
they are of similar quality to the rated securities before the fund may invest
in them.

A REIT (real estate investment trust) is a managed portfolio of real estate
investments.

REAL ESTATE INVESTMENT TRUSTS The fund may invest in equity or mortgage REITs
that produce income. REITs will be diversified by geographic location and by
sector (such as shopping malls, apartment building complexes and health care
facilities). An equity REIT holds equity positions in real estate and provides
its shareholders with income from the leasing of its properties and capital
gains from any sales of properties. A mortgage REIT specializes in lending
money to developers of properties and passes interest income to its
shareholders.

DOMESTIC EQUITY SECURITIES The fund's domestic equity securities consist of
high dividend paying common and preferred stocks of U.S. companies listed on the
New York or American Stock Exchanges or traded in the over-the-counter market.
The companies must have a history of stable earnings and/or growing dividends.
The fund may also invest in warrants and securities convertible into common
stocks of these U.S. companies.

MONEY MARKET INSTRUMENTS The fund may invest in U.S. and foreign short-term
money market instruments, including commercial paper rated A-1 or A-2 by S&P,
Prime-1 or Prime-2 by Moody's or F-1 or F-2 by Fitch, bank instruments,
obligations of the U.S. government, its agencies or instrumentalities,
repurchase agreements, and other unrated short-term instruments that the adviser
believes to be of comparable quality to the other obligations in which the fund
may invest.

STRUCTURED FIXED-INCOME SECURITIES The fund may invest in mortgage-backed
securities, adjustable rate mortgage securities, collateralized mortgage
obligations and asset-backed securities.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

STOCK MARKET RISKS One of the risks of investing in equity securities is stock
market risk. The portion of the fund's portfolio invested in equity securities
may experience sudden, unpredictable declines in value, as well as periods of
poor performance. Because stock values go up and down, the value of your fund's
shares may go up and down. Therefore, when you sell your investment, you may
receive more or less money than you originally invested.

LIQUIDITY RISKS Liquidity risk is the risk that certain securities may be
difficult or impossible to sell at the time and price that the investment
adviser would like to sell. The adviser may have to lower the price, sell other
securities instead or forego an investment opportunity, any of which could have
a negative effect on fund management or performance.

FOREIGN SECURITIES RISKS The fund can invest in foreign securities, which can
carry higher returns, but involve more risks than those associated with domestic
investments. Additional risks include currency fluctuations, political and
economic instability, differences in financial reporting standards and less
stringent regulation of securities markets.

HIGH TURNOVER RISKS The fund purchases and sells securities to capture
dividends on particular securities. The fund will purchase a security close to
its ex-dividend date, thereby entitling the fund to receive the anticipated
dividend. The fund will then sell the security after the ex-dividend date.
This practice could result in the fund experiencing an annual turnover rate of
up to 250%. High portfolio turnover rates lead to increased costs, could cause
you to pay higher taxes and could negatively affect the performance of the fund.

REAL ESTATE INVESTMENT TRUSTS RISKS Some of the risks of equity and mortgage
REITs are that they depend on management skills and are not diversified. As a
result, REITs are subject to the risk of financing either single projects or any
number of projects. REITs depend on heavy cash flow and may be subject to
defaults by borrowers and self-liquidation. Additionally, equity REITs may be
affected by any changes in the value of the underlying property owned by the
trusts. Mortgage REITs may be affected by the quality of any credit extended.
The adviser tries to minimize these risks by selecting REITs diversified by
sector (i.e. shopping malls, apartment building complexes, health care
facilities) and geographic location.

MORTGAGE AND ASSET-BACKED SECURITIES RISKS The main risk of mortgage and
asset-backed securities is that the borrower will prepay some or all of the
principal owed to the issuer. If that happens, the fund may have to replace the
security by investing the proceeds in a less attractive security. This could
reduce the fund's share price and its income distributions.

OPTIONS RISKS The fund may use options for hedging purposes only. The hedging
strategy may not be successful if the portfolio manager is unable to accurately
predict movements in the prices of individual securities held by a fund or if
the strategy does not correlate well with the fund's investments. The use of
options may produce a loss for the fund, even when used only for hedging
purposes.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the STRATEGIC INCOME
FUND'S returns. The bar chart indicates the risks of investing in the fund by
showing the changes in the fund's performance from year to year (on a calendar
year basis). The table shows how the fund's average annual returns for one-year
and since inception ended December 31, 1998 compare with those of a broad
measure of market performance. The fund's past performance is not necessarily
an indication of how the fund will perform in the future.

STRATEGIC INCOME FUND - B SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1995 13.24%
1996 5.29%
1997 9.49%
1998 -3.19%

Sales charges are not reflected in the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q2 1997 4.59%
WORST QUARTER: Q4 1998 (1.57)%

Average annual total return 1 Year Since
through 12/31/98 Inception
- --------------------------- ------- ---------
Strategic Income Fund B Shares1<F28> (7.71)% 6.09%
Lehman Brothers Government/Corporate Total Index2<F29> 9.47% 10.23%

The average annual total returns above reflect the sales charges. For updated
yield information please call 1-800-677-FUND.

1<F28> B Shares commenced operations on December 12, 1994.
2<F29> Lehman Brothers Government/Corporate Total Index is an unmanaged index
composed of bonds which have maturities of at least one year and are
rated investment grade or higher by Moody's, S&P or Fitch, in that
order.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS B
- ----------------------------------------- -------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) None
MAXIMUM DEFERRED SALES CHARGE (LOAD)1<F30>
(as a percentage of offering price) 5.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS B
- ---------------------------------------- -------
MANAGEMENT FEES 0.95%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F31> None
OTHER EXPENSES3<F32> 0.51%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.46%
1<F30>The contingent deferred sales charge is 5.00% in the first year,
declining to 1.00% in the fifth year and 0.00% thereafter. See "Price of
Shares."
2<F31>Currently, B shares of the fund are not paying or accruing Rule 12b-1
fees. The class can pay up to 0.25% of average daily net assets as a
Rule 12b-1 fee to the distributor if a Y class of shares is created.
3<F32>"Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily net
assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1. You invest $10,000 in the fund for the time periods indicated and then
redeem all of your shares at the end of those periods,
2. Your investment has a 5% return each year, and
3. The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS B $649 $762 $897 $1,746

If you did not redeem your shares, you would pay the following expenses:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS B $149 $462 $797 $1,746

Class descriptions are on page 14.

U.S. GOVERNMENT INCOME FUND

INVESTMENT GOAL

The U.S. GOVERNMENT INCOME FUND'S goal is to provide current income. The fund's
second objective is to achieve capital appreciation.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

INVESTMENT STRATEGY EXAMPLE: The adviser may sell 2-year and buy 10-year
maturity notes. If interest rates fall, prices for the 10-year note will rise
more than the 2-year note. Thus, capital gains are enhanced as well as the
fund's total return.

To achieve its objectives, the fund invests at least 65% of the value of its
total assets in securities issued or guaranteed as to payment of principal and
interest by the U.S. government, its agencies or instrumentalities which produce
income. The fund attempts to achieve its secondary objective by increasing or
decreasing the portfolio's average maturity depending upon the forecasted
interest rates. By varying portfolio maturity lengths in relation to the
interest rate forecasts, the adviser seeks to improve the fund's total return.

U.S. GOVERNMENT OBLIGATIONS The government securities in which the fund
invests 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 its agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the obligation.

The fund also considers collateralized mortgage obligations issued by U.S.
government agencies or instrumentalities to be U.S. government securities.

Up to 35% of the value of the fund's assets may be invested in:

o time and savings deposits o asset-backed securities
o mortgage-backed securities o commercial paper
o investment grade corporate o debt securities of
debt obligations foreign issues

DOMESTIC DEBT SECURITIES A small percentage of the fund's assets may be
invested in short to long-term, investment grade domestic issues of corporate
debt obligations. The corporate debt obligations may have floating or fixed
interest rates. At the time the fund purchases the obligation, the securities
will be rated in one of the four highest categories by a nationally recognized
statistical rating organization (i.e., S&P or Fitch).

U.S. MONEY MARKET INSTRUMENTS The fund may invest in U.S. money market
instruments (including commercial paper). The instruments must mature within
270 days and must be rated A-1 or A-2 by S&P, Prime-1 or Prime-2 by Moody's, or
F-1 or F-2 by Fitch. Other types of money market instruments in which the fund
may invest are time and savings deposits (including certificates of deposit) in
commercial or savings banks. The banks must be insured by the Bank Insurance
Fund or the Savings Association Insurance Fund, both of which are administered
by the FDIC. Foreign branches of FDIC insured banks and banker's acceptances
might issue the deposits.

FOREIGN DEBT SECURITIES The fund may invest in debt securities of foreign
governments, agencies or supranational institutions. The fund will invest in
investment quality debt securities issued by foreign corporations. The
securities will be rated in one of the four highest rating categories by a
nationally recognized statistical rating organization. If the securities are
unrated, the adviser must deem them to be of similar quality to the rated
securities before the fund may invest in them.

STRUCTURED FIXED-INCOME SECURITIES A small portion of the fund's assets may be
invested in mortgage-backed securities including adjustable rate mortgage
securities, collateralized mortgage obligations and asset-backed securities.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

FUTURES AND OPTIONS ON FUTURES RISKS The fund may use futures and options on
futures for hedging purposes only. The hedging strategy may not be successful
if the portfolio manager is unable to accurately predict movements in the prices
of individual securities held by a fund or if the strategy does not correlate
well with the fund's investments. The use of futures and options on futures may
produce a loss for the fund, even when used only for hedging purposes.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the U.S. GOVERNMENT
INCOME FUND'S returns. The bar chart indicates the risks of investing in the
fund by showing the changes in the fund's performance from year to year (on a
calendar year basis). The table shows how the fund's average annual returns for
one-year, five-year and since the fund's inception ended December 31, 1998
compare with those of a broad measure of market performance. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.

U.S. GOVERNMENT INCOME FUND - A SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1994 -3.27%
1995 15.74%
1996 1.73%
1997 9.00%
1998 7.97%

Sales charges are not reflected in the bar chart. If these
amounts were reflected, returns would be less than those
shown.

BEST QUARTER: Q2 1995 4.87%
WORST QUARTER: Q1 1996 (2.84)%

Average annual total return Since
through 12/31/98 1 Year 5 Year inception
- --------------------------- ------- ------- ---------
U.S. Government Income Fund
A Shares1<F33> 4.19% 5.28% 5.77%
B Shares2<F34> N/A N/A 1.87%
Lehman Brothers Government
Corporate Total Index3<F35> 9.47% 7.30% 7.94%
Lipper U.S. Government Fund Avg.4<F36> 8.07% 6.15% 6.34%

The average annual total returns above reflects the sales charges. For updated
yield information please call 1-800-677-FUND.

1<F33> A Shares commenced operations on January 5, 1993.
2<F34> B Shares commenced operations on April 27, 1998.
3<F35> Lehman Brothers Government/Corporate Total Index is an unmanaged index
composed of bonds which have maturities of at least one year and are
rated investment grade or higher by Moody's, S&P or Fitch, in that
order.
4<F36> The Lipper U.S. Government Fund Average shows the performance of a
category of mutual funds with similar goals to the fund.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B
- ----------------------------------------- ------- -------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) 3.50% None
MAXIMUM DEFERRED SALES CHARGE (LOAD)1<F37>
(as a percentage of offering price) None 5.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON REINVESTED DIVIDENDS None None
REDEMPTION FEE None None
EXCHANGE FEE None None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A CLASS B
- ------------------------------------ ------- -------
MANAGEMENT FEES 0.60% 0.60%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F38> None None
OTHER EXPENSES3<F39> 0.51% 0.51%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.11% 1.11%

1<F37> The contingent deferred sales charge is 5.00% in the first year,
declining to 1.00% in the fifth year and 0.00% thereafter. See "Price
of Shares."
2<F38> Currently, A and B shares of the fund are not paying or accruing Rule
12b-1 fees. The classes can pay up to 0.25% of average daily net assets
as a Rule 12b-1 fee to the distributor if a Y class of shares is
created.
3<F39> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A $459 $691 $940 $1,654
CLASS B $613 $653 $712 $1,352

If you did not redeem your shares, you would pay the following expenses:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A $459 $691 $940 $1,654
CLASS B $113 $353 $612 $1,352

Class descriptions are on page 14.

INSURED TAX-FREE BOND FUND

INVESTMENT GOAL

The INSURED TAX-FREE BOND FUND seeks to provide current income exempt from
federal income tax by primarily purchasing insured municipal bonds.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

Under normal circumstances, the fund invests its assets so that at least 80% of
its annual interest income is exempt from federal income tax and not subject to
the alternative minimum tax. Usually, at least 65% of the value of the fund's
assets are invested in intermediate to long-term, investment grade municipal
securities that are insured as to timely payment. All tax-exempt interest
income earned by the fund will remain tax-free when it is distributed to you.

EXAMPLES OF MUNICIPAL SECURITIES
--------------------------------

o tax and revenue anticipation notes issued to finance working capital needs in
anticipation of receiving taxes or other revenues
o bond anticipation notes that are intended to be refinanced through a later
issuance of longer term bonds
o municipal commercial paper and other short-term notes
o variable rate demand notes
o municipal bonds and leases
o construction loan notes insured by the Federal Housing Administration and
financed by the Federal or Government National Mortgage Associations
o participation interests in any of the above

Municipal securities are debt obligations issued by or on behalf of the states,
territories and other possessions of the United States that have income exempt
from federal income tax. If you are subject to alternative minimum tax (AMT),
you may be required to pay AMT if the fund invests in securities subject to AMT.
However, no more than 20% of the fund's income will be subject to AMT.

Municipal securities are generally issued to finance public works, such as:

o airports o bridges o hospitals
o highways o housing o schools
o mass transportation projects o water and sewer works o streets

Municipal securities are also issued to:

o repay outstanding obligations
o raise funds for general operating expenses
o make loans to other public institutions and facilities

The fund's investment adviser looks for certain qualities when investing in
municipal securities. These include:

1. rated investment grade, or in other words, rated within the four highest
rating categories by a nationally recognized statistical rating organization
(NRSRO) such as Aaa, Aa, A or Baa by Moody's Investors Service, Inc. or AAA,
AA, A, or BBB by Standard and Poor's, Fitch IBCA, Inc. or Duff & Phelps
Credit Rating Co.;
2. insured by a municipal bond insurance company which is in the top rating
category by an NRSRO;
3. guaranteed at the time of purchase by the U.S. government as to the payment
of principal and interest;
4. fully collateralized by an escrow of U.S. government securities; or
5. determined to be of comparable quality to the above rating categories by the
fund's adviser if the security is unrated.

The municipal securities purchased by the fund are covered by insurance which
guarantees the timely payment of principal at maturity and interest on the
securities. These insured municipal securities are either: (1) covered by an
insurance policy applicable to a particular security, or (2) insured under
master insurance policies issued by municipal bond insurers, which may be
purchased by the fund.

The fund will require or obtain municipal bond insurance when it purchases
municipal securities that are not up to the fund's quality standards. The fund
may also require or obtain municipal bond insurance for specific municipal
securities held or purchased if the insurance would benefit the fund by
improving the portfolio quality, for example.

PARTICIPATION INTERESTS The fund may purchase interests in municipal
securities from financial institutions such as commercial and investment banks,
savings associations and insurance companies. The fund invests in these sorts
of participation interests in order to obtain credit enhancement or demand
features that would not be available by directly owning the underlying municipal
securities. Credit enhanced securities are investments backed by a guaranty,
letter of credit, or insurance. They ensure that participation interests are of
high quality.

VARIABLE RATE MUNICIPAL SECURITIES The fund may invest in variable rate
municipal securities (i.e., securities that have variable or floating interest
rates). These securities provide the fund with the right to tender the
securities for repurchase at the stated principal amount plus accrued interest.
These securities usually bear interest at a rate that allow the securities to
trade at par. Most variable rate municipal securities allow the fund to demand
the repurchase of the security on not more than 7 days' notice. Other variable
rate municipal securities do not have this demand feature or the demand feature
is longer than 7 days. Those securities may be considered illiquid. The
adviser will use the above quality standards to buy variable rate municipal
securities.

MUNICIPAL LEASES The fund may also invest in municipal leases (i.e.,
obligations issued by state and local governments to finance the acquisition of
equipment and facilities). Municipal leases may take the form of a lease, an
installment purchase contract, a conditional sales contract, or a participation
interest. Municipal leases may be considered illiquid.

INDUSTRIAL DEVELOPMENT BONDS The fund also invests in industrial development
bonds, another type of municipal security, issued by or on behalf of public
authorities. IDBs are used to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations.
The fund may invest more than 25% of its assets in various IDBs as long as they
are not from the same facility or similar types of facilities or projects.

TEMPORARY INVESTMENTS The fund may invest up to 100% of its assets in tax-
exempt or taxable short-term temporary investments to respond to adverse market,
economic, political or other conditions. These temporary investments include
tax-exempt variable and floating rate demand notes, temporary municipal
securities, U.S. obligations, etc. Although the fund is permitted to make
taxable, temporary investments, the adviser currently does not intend to
generate income subject to federal regular income tax. There are no applicable
rating requirements to temporary investments with the exception of temporary
municipal securities. These securities are subject to the same rating
requirements as all other municipal securities in which the fund invests.
However, for other temporary investments, the adviser will have to determine
whether the securities are of comparable quality to the rated securities before
investing. To the extent the fund invests in such temporary investments, the
fund may not achieve its investment objective.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

MUNICIPAL SECURITIES RISKS The yield of municipal securities depends on a
variety of factors. The investment adviser must consider the general conditions
of the money market and the taxable and municipal securities markets. The
adviser must also weigh the size of the particular offering, the maturity of the
obligations and the rating of the issue. The ability of the fund to achieve its
investment objective also depends on the ability of the issuers of the municipal
securities and demand features, or the credit enhancers of either to continue to
meet their obligations for the payment of interest and principal when due.
Further, any adverse economic conditions or developments affecting the states or
municipalities could negatively impact the fund's portfolio.

CONCENTRATION RISKS The fund may invest more than 25% of its assets in
industrial development bonds. The fund does not invest that amount in the same
facility or project. However, if the adviser chooses to concentrate those
investments in the same industry or state, the shares of the fund are likely to
fluctuate in value more than those of a fund investing in a broader range of
securities.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the INSURED TAX-FREE
BOND FUND'S returns. The bar chart indicates the risks of investing in the fund
by showing the changes in the fund's performance from year to year (on a
calendar year basis). The table shows how the fund's average annual returns for
one year and since the fund's inception ended December 31, 1998 compare with
those of a broad measure of market performance. The fund's past performance is
not necessarily an indication of how the fund will perform in the future.

INSURED TAX-FREE BOND FUND - A SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1997 8.29%
1998 -5.81%

Sales charges are not reflected in the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q3 1998 3.35%
WORST QUARTER: Q1 1997 (0.43)%

Average annual total return Since
through 12/31/98 1 Year Inception
- --------------------------- ------ ---------
Insured Tax-Free Bond Fund A Shares1<F40> 1.02% 4.76%
Lehman Brothers Ten Year Insured Bond Index2<F41> 6.60% 7.91%
Lipper Insured Municipal Debt Fund Average3<F42> 5.31% 7.18%

The average annual total returns above reflect the sales charges. For updated
yield information please call 1-800-677-FUND.

1<F40>A Shares commenced operations on December 30, 1996.
2<F41>The Lehman Brothers Ten Year Insured Bond Index is an unmanaged index that
reflects the total performance of the insured bond sector. Securities in
the Index must have maturaties between 8 and 12 years.
3<F42>Lipper Insured Municipal Debt Fund Average shows the performance of a
category of mutual funds with similar goals to the fund.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A
- ----------------------------------------- -------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) 4.50%
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A
- ------------------------------------ -------
MANAGEMENT FEES1<F43> 0.75%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F44> None
OTHER EXPENSES3<F45> 0.49%
TOTAL FUND ANNUAL OPERATING EXPENSES 1.24%

1<F43> The amount shown indicates the maximum fee the investment adviser can
charge. The investment adviser voluntarily waives a portion of the
investment management fee each year. The adviser can terminate this
voluntary waiver at any time. With the waiver for the year ended
November 30, 1998, the management fee was 0.50%.

2<F44> Currently, A shares of the fund are not paying or accruing Rule 12b-1
fees. The class can pay up to 0.25% of average daily net assets as a
Rule 12b-1 fee to the distributor if a Y class of shares is created.
3<F45> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.
This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,
2.Your investment has a 5% return each year, and
3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CLASS A $574 $826 $1,100 $1,882

Class descriptions are on page 14.

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISER

The amounts shown represent a percentage of each fund's average daily net
assets.

Before waivers After waivers
-------------- -------------
Strategic Income Fund 0.95% 0.95%
U.S. Government Income Fund 0.60% 0.60%
Insured Tax-Free Bond Fund*<F46> 0.75% 0.55%

*<F46>During the fiscal year ended November 30, 1998, the adviser waived 25
basis points of the management fees for THE INSURED TAX-FREE BOND FUND.
For the foreseeable future, the adviser will waive 20 basis points.
The adviser can terminate this waiver at any time.

PORTFOLIO MANAGERS
References to Firstar Bank may refer to what was formerly known as "Star Bank."

KIRK F. MENTZER, a Vice-President and Director of Fixed Income Research for the
Capital Management Division of Firstar Bank since 1992, has been employed by
Firstar Bank in various capacities since 1989. Mr. Mentzer has managed the U.S.
GOVERNMENT INCOME FUND since its inception in January 1993. He has also managed
the domestic and structured fixed-income components of STRATEGIC INCOME FUND
since its inception in December 1994 and the cash equivalent components of the
Firstar Stellar Funds (formerly the Star Funds) since June 1998. Mr. Mentzer
earned a Bachelor of Business Administration degree in Finance from the
University of Cincinnati and a Masters degree in Finance from Xavier
University.

DONALD L. KELLER, Senior Vice President and Chief Investment Officer of Firstar
Bank since 1998, has been employed by Firstar Bank in various capacities since
1982. Mr. Keller has managed the domestic equity component of the STRATEGIC
INCOME FUND since March 1999. Mr. Keller earned a Bachelor of Business
Administration Degree in Finance and Accounting from the University of
Cincinnati. He also earned his Masters in Finance from Xavier University.

WARREN D. PIERSON, CFA, is a vice president and senior portfolio manager at
Firstar Bank. Mr. Pierson has managed THE INSURED TAX-FREE BOND FUND since
March 1999. He joined Firstar in 1985 and has over 14 years of fixed-income
management experience at Firstar. Mr. Pierson earned his Bachelor of Arts
degree at Lawrence University and became a Chartered Financial Analyst in
1990.

FUND ADMINISTRATION, FUND ACCOUNTING, DIVIDEND DISBURSEMENT, AND CUSTODY
SERVICES

Firstar Mutual Fund Services, LLC, an affiliate of the adviser, provides
administrative, accounting and dividend disbursement services to the Firstar
Stellar Funds and is located in Milwaukee, Wisconsin. Firstar Bank, N.A., the
funds' investment adviser, also serves as custodian for the funds.

DISTRIBUTION OF SHARES

DISTRIBUTOR

Edgewood Services, Inc. is the distributor for shares of the funds. Edgewood is
based in Pittsburgh, Pennsylvania and is the distributor for a number of
investment companies around the country.

RULE 12B-1 PLAN

The funds have adopted a Rule 12b-1 Plan under the Investment Company Act of
1940. Under the Rule 12b-1 Plan, class A and B shares may pay up to an annual
rate of 0.25% of the average daily net asset value of shares to Edgewood.
Edgewood uses this fee to finance activities that promote the sale of the funds'
shares. Such activities include, but are not necessarily limited to,
advertising, printing and mailing prospectuses to persons other than current
shareholders, printing and mailing sales literature, and compensating
underwriters, dealers and sales personnel.

Currently, none of the bond funds are paying or accruing Rule 12b-1 fees. These
funds will only start paying the Rule 12b-1 fee when a "Y" class of shares is
created in the fund. Whenever Edgewood deems it appropriate, Edgewood may, from
time to time, voluntarily reduce its compensation under the Rule 12b-1 Plan to
the extent expenses of the shares exceed a certain limit. Rule 12b-1 fees are
paid out of fund assets on an on-going basis. Over time, these fees will
increase the cost of your investment and may cost you more than paying other
types of sales charges.

DESCRIPTION OF CLASSES

CLASS A SHARES

Class A shares are regular retail shares and may be purchased by individuals or
IRAs. With class A shares, you pay a sales charge when you invest. Although
none currently do, certain class A shares may also impose a Rule 12b-1 fee (as
discussed above) which is assessed against the shares of the fund. Currently,
the INSURED TAX-FREE BOND FUND and U.S. GOVERNMENT INCOME FUND sell class A
shares. For more information on the sales charges, see "Price of Shares."

CLASS B SHARES

Class B shares are regular retail shares and may be purchased by individuals or
IRAs. With class B shares, a sales charge may be imposed if you redeem your
shares within a certain time period. If you redeem your class B shares within
five full years of the date you purchased, a contingent deferred sales charge
(CDSC) may be charged by the funds' distributor. Although none currently do
certain class B shares may also impose a Rule 12b-1 fee (as discussed above)
which is assessed against the shares of the fund. Currently, the U.S.
GOVERNMENT INCOME FUND and STRATEGIC INCOME FUND offer class B shares. For more
information on the CDSC, see "Price of Shares."

PRICE OF SHARES

HOW NAV IS DETERMINED

NAV =
Assets - Liabilities
--------------------
# outstanding shares

The net asset value (NAV) is calculated by taking the value of the fund's
assets, including interest on dividends accrued, but not yet collected, less all
liabilities and dividing the result by the number of shares outstanding. The
net asset value for each fund 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:

o days on which there are insignificant changes in the value of a fund's
portfolio securities to materially affect the net asset value
o days during which no shares are purchased or redeemed
o the following holidays
o New Year's Day o Good Friday o Labor Day
o Martin Luther King Jr.' s Day o Memorial Day o Thanksgiving Day
o Presidents' Day o Independence Day o Christmas Day

DETERMINING MARKET VALUE OF SECURITIES

Market or fair values of the funds' portfolio securities are determined as
follows:

1. For equity securities: according to the last sale price on a national
securities exchange, if applicable.
2. In the absence of recorded sales for listed equity securities: according to
the mean between the last closing bid and asked prices.
3. For unlisted equity securities: latest bid prices.
4. For bonds and other fixed-income securities: as determined by an
independent pricing service.
5. For short-term obligations: according to the mean between bid and asked
prices as furnished by an independent pricing service.
6. For short-term obligations with remaining maturities of 60 days or less at
the time of purchase: at amortized cost.
7. For all other securities: at fair value as determined in good faith by the
funds' board of trustees.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may reflect institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data.

TRADING IN FOREIGN SECURITIES

Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. In computing the net asset value, the
funds value foreign securities at the latest closing price on the exchange on
which they are traded immediately prior to the closing of the New York Stock
Exchange. Certain foreign currency exchange rates may also be determined at the
latest rate prior to the closing of the New York Stock Exchange. Foreign
securities quoted in foreign currencies are translated into U.S. dollars at
current rates. Occasionally, events that affect these values and exchange rates
may occur between the times at which they are determined and the closing of the
New York Stock Exchange. If such events materially affect the value of
portfolio securities, these securities may be valued at their fair value as
determined in good faith by the underlying fund's board of directors/trustees,
although the actual calculation may be done by others.

WHAT SHARES COST - CLASS A SHARES

If you purchase class A shares of the INSURED TAX-FREE BOND FUND, you will pay
the net asset value next determined after your order is received plus a sales
charge (shown in percentages below) depending on the amount of your investment:

SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE A PERCENTAGE
AMOUNT OF OF PUBLIC OF NET AMOUNT
TRANSACTION OFFERING PRICE INVESTED
- ----------- -------------- --------------
LESS THAN $100,000 4.50% 4.71%
$100,000 - $249,999.99 3.75% 3.90%
$250,000 - $499,999.99 2.50% 2.56%
$500,000 - $749,999.99 2.00% 2.04%
$750,000 - $999,999.99 1.00% 1.01%
$1 MILLION + 0.25% 0.25%

If you purchase class A shares of the U.S. GOVERNMENT INCOME FUND, you will pay
the net asset value next determined after your order is received plus a sales
charge as follows:

SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE A PERCENTAGE
AMOUNT OF OF PUBLIC OF NET AMOUNT
TRANSACTION OFFERING PRICE INVESTED
- ----------- -------------- --------------
LESS THAN $100,000 3.50% 3.62%
$100,000 - $249,999.99 3.00% 3.09%
$250,000 - $499,999.99 2.00% 2.04%
$500,000 - $999,999 1.50% 1.52%
$1 MILLION + 0.00% 0.00%

NOTE: Sales charges are not imposed on shares purchased with reinvested
dividends.

WAIVERS - CLASS A SHARES

The following persons will not have to pay a sales charge on class A shares:

o Employees and retired employees of Firstar Bank (or the former Star Bank), or
their affiliates and members of their families (including parents,
grandparents, siblings, spouses, children, and in-laws) of such employees or
retired employees;
o FirstarTrust customers of Firstar Corporation and its subsidiaries; and
o non-trust customers of financial advisers

REDUCING YOUR SALES CHARGE - CLASS A SHARES

You can reduce the sales charge on purchases of class A shares by:

o purchasing larger quantities of shares or putting a number of purchases
together to obtain the quantity discounts indicated above;
o signing a letter of intent that you intend to purchase more than $100,000
worth of shares over the next 13 months;
o using the reinvestment privilege which allows you to redeem shares and then
reinvest them without a sales charge within 60 days; and
o combining concurrent purchases of class A shares from different funds.

WHAT SHARES COST - CLASS B SHARES

If you purchase class B shares of the U.S. GOVERNMENT INCOME FUND or the
STRATEGIC INCOME FUND, you will pay the NAV next determined after your order is
received. There is no sales charge on this class at the time you purchase your
shares. However, there is a contingent deferred sales charge on Class B shares
at the time you redeem. Any applicable CDSC will be imposed on the lesser of
the net asset value of the redeemed shares at the time of purchase or the net
asset value of the redeemed shares at the time of redemption in the amount
indicated by the table below:

YEAR OF REDEMPTION CONTINGENT DEFERRED
AFTER PURCHASE SALES CHARGE
------------------ -------------------
YEAR 1 5.00%
YEAR 2 4.00%
YEAR 3 3.00%
YEAR 4 2.00%
YEAR 5 1.00%
YEAR 6 0.00%

In computing the amount of CDSC you could be charged, redemptions are deemed to
have occurred in the following order:

1. shares of the fund you purchased by reinvesting your dividends and long-term
capital gains
2. shares of a fund you held for more than five full years from the date of
purchase
3. shares of a fund you held for fewer than five full years on a first-in,
first-out basis

WAIVERS - CLASS B SHARES

A redemption made under the Systematic Withdrawal Plan (see "Selling Shares")
will not be assessed CDSC as long as it does not amount to more than 10% of your
initial balance. CDSC is also not charged on:

o shares purchased by reinvesting your dividends or distributions of short or
long-term capital gains
o shares held for more than five full years after purchase
o redemptions made following death or disability (as defined by the IRS)
o redemptions made as minimum required distributions under an IRA or other
retirement plan to a shareholder who is 701/2 years old or older
o redemptions made in shareholder accounts that do not have the required
minimum balance

PURCHASING SHARES

OPENING AN ACCOUNT

To open an account, first determine if you are buying class A or B shares (see
page 14 for class descriptions). The minimum initial investment amounts for
each fund are as follows:

Class A and B Shares
--------------------
o $1,000 for individuals
o $500 for Education IRA customers
o $25 for Firstar Bank Connections Group Banking customers and Firstar Bank
employees, members of their immediate family, participants in the Firstar
Bank Student Finance 101 Program who establish an automatic investment
program and persons contributing to SIMPLE IRAs

ADDITIONAL INVESTMENTS MAY BE MADE IN ANY AMOUNT.

When making a purchase request, make sure your request is in good order. "Good
order" means your purchase request includes:
o the name of the fund
o the dollar amount of shares to be purchased
o purchase application or investment stub
o check paybable to Firstar Stellar Funds

RECEIPT OF ORDERS

Shares may only be purchased on days the New York Stock Exchange and the Federal
Reserve wire system are open for business. Your order will be considered
received after your check is converted into federal funds and received by
Firstar Bank (usually the next business day). If you are paying with federal
funds (wire), your order will be considered received when Firstar Bank receives
the federal funds.

TIMING OF REQUESTS

The price per share will be the net asset value next computed after the time
your request is received in good order and accepted by the funds or bythe funds'
authorized agent. All requests (telephone orders and federal funds wire)
received in good order by the fund before 4:00 p.m. (Eastern time) will be
executed on that same day. Requests received after 4:00 p.m. will be processed
on the next business day.

METHODS OF BUYING
<TABLE>

------------------------------------------------------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BY TELEPHONE
(Firstar Bank customers only) Call Firstar Stellar Funds at 1-800-677-FUND Call Firstar Stellar Funds at
to place the order. (NOTE: For security reasons, 1-800-677-FUND to place the order.
requests by telephone will be recorded.) (NOTE: For security reasons, requests by
telephone will be recorded.)
------------------------------------------------------------------------------------------------------------------------------
BY MAIL Make your check payable to "Firstar Stellar Fill out the investment stub from an
Funds." Forward the check and your application account statement, or indicate the fund
to the address below. No third party checks name and account number on your check.
will be accepted. If your check is returned Make your check payable to "Firstar
for any reason, a $25 fee will be assessed Stellar Funds." Forward the check and
against your account. stub to the address below.
------------------------------------------------------------------------------------------------------------------------------
BY FEDERAL FUNDS WIRE Forward your application to Firstar Stellar Call Firstar Stellar Funds at
Funds at the address below. Call 1-800-677-FUND to notify of incoming
1-800-677-FUND to obtain an account number. wire. Use the following instructions:
Wire funds using the instructions to the right.
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit:(name of fund, share class)
(name/title on the account)
(account #)
------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN Open a fund account with one of the other If you didn't set up an automatic
methods. If by mail, be sure to include investment plan with your original
your checking account number on the application, call Firstar Stellar Funds
appropriate section of your application at 1-800-677-FUND. Additional Investments
and enclose a voided check or deposit slip. (minimum of $25 per period) will be taken
automatically monthly or quarterly from
your checking account.
------------------------------------------------------------------------------------------------------------------------------
THROUGH SHAREHOLDER To purchase shares for another investor, To purchase shares for another investor,
SERVICE ORGANIZATIONS call Firstar Stellar Funds at 1-800-677-FUND. call Firstar Stellar Funds at
1-800-677-FUND.call firstar stellar
------------------------------------------------------------------------------------------------------------------------------
BY EXCHANGE Call 1-800-677-FUND to obtain exchange Call 1-800-677-FUND to obtain exchange
information. See page 20. to obtain exchange Information. See page
20.
</TABLE>

ADDRESS FOR FIRSTAR STELLAR FUNDS

You should use the following addresses when sending documents by mail or by
overnight delivery:

BY MAIL BY OVERNIGHT DELIVERY
- ------- ---------------------
Firstar Stellar Funds Firstar Stellar Funds
c/o Firstar Mutual Fund c/o Firstar Mutual Fund
Services, LLC Services, LLC
P.O. Box 701 615 E. Michigan Street,
Milwaukee, Wisconsin 53201-0701 Third Floor
Milwaukee, Wisconsin 53202

METHODS OF SELLING

TO SELL SOME OR ALL OF YOUR SHARES
----------------------------------
BY TELEPHONE Call Firstar Stellar Funds at
1-800-677-FUND to sell any amount of
shares. (NOTE: For security reasons,
requests by telephone will be recorded.)

BY MAIL Send a letter instructing the Firstar
Stellar Funds to redeem the dollar
amount or the number of shares you wish.
The letter should contain the fund's
name, the account number, and the number
of shares or the dollar amount of shares
to be redeemed. Be sure to have all
shareholders sign the letter. If your
account is an IRA, the signature must be
guaranteed and your request must
indicate whether or not 10% withholding
should apply. Requests submitted
without an election whether or not to
withhold will be subject to withholding.

BY FEDERAL FUNDS WIRE Call Firstar Stellar Funds at
1-800-677-FUND to request the amount of
money you want. Be sure to have all
necessary information from your bank.
Your bank may charge a fee to receive
wired funds.

SYSTEMATIC WITHDRAWAL Call Firstar Stellar Funds at
PLAN 1-800-677-FUND to arrange for regular
monthly or quarterly fixed withdrawal
payments. The minimum payment you may
receive is $25 per period. Note that
this plan may deplete your investment
and affect your income or yield. Also,
it isn't wise to make purchases of class
A or B shares while participating in
this plan because of the sales charges.

SHAREHOLDER SERVICE Consult your account agreement for
ORGANIZATION information on redeeming shares.

BY EXCHANGE Call 1-800-677-FUND to obtain exchange
information. See page 20.

WHEN REDEMPTION PROCEEDS ARE SENT TO YOU

Your shares may only be redeemed on days on which the funds compute their net
asset value. Your redemption request cannot be processed on days the New York
Stock Exchange is closed or on federal holidays which restrict wire
transfers.

All requests received in good order by Firstar Stellar Funds before 4:00 p.m.
(Eastern time), will normally be wired to the bank you indicate or mailed on the
following day to the address of record. In no event will proceeds be wired or a
check mailed more than 7 calendar days after Firstar receives a proper
redemption request.

VALUE OF SHARES SOLD

Your shares will be redeemed at the net asset value next determined after
Firstar Stellar Funds receives your redemption request in good order. In the
case of class B shares, the applicable contingent deferred sales charge will be
subtracted from your redemption amount or your account balance, per your
instructions.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, Firstar Stellar
Funds may mail you a notice if your account falls below $1,000 requesting that
you bring the account back up to $1,000 or close it out. If you do not respond
to the request within 30 days, Firstar Stellar Funds may close the account on
your behalf and send you the proceeds. If you have an account through a
shareholder service organization, consult your account agreement for information
on accounts with low balances.

SIGNATURE GUARANTEES

You will need your signature guaranteed if:
o you are redeeming shares from an IRA account
o you request a redemption to be made payable to a person not on record with
the funds, or
o you request that a redemption be mailed to an address other than that on
record with the funds

You may obtain signature guarantees from most trust companies, commercial banks
or other eligible guarantor institutions.

EXCHANGING SHARES

Exercising the exchange privilege is really two transactions: a sale of one fund
and the purchase of another.

Exercising the exchange privilege is really two transactions: a sale of one fund
and the purchase of another. The same policies that apply to purchases and
sales apply to exchanges, including minimum investment amounts. Keep in mind
that some funds may have higher sales charges than other funds and you may have
to pay the difference in fees. Exchanges also have the same tax consequences as
ordinary sales and purchases and you could realize short or long-term capital
gains or losses. Generally, exchanges may only be made between identically
registered accounts unless you send written instructions with a signature
guarantee.

REINSTATEMENT PRIVILEGE

If you sell shares of a Firstar Stellar Fund or Firstar Fund, you may reinvest
some or all of the proceeds in the class A shares of any Firstar Stellar Fund
within 60 days without a sales charge, as long as your investment professional
is notified before you reinvest. All accounts involved must have the same
registration. You may be subject to taxes as a result of a redemption. Consult
your tax adviser concerning the results of a redemption or reinvestment.

The SAI contains more information on exchanges. You may also call
1-800-677-FUND to learn more about exchanges, Firstar Funds, a separate family
of funds offered by Firstar Corporation or other Firstar Stellar Funds.

DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES

DIVIDENDS AND CAPITAL GAINS

The INSURED TAX-FREE BOND FUND and STRATEGIC INCOME FUND declare and pay
dividends on a monthly basis. The U.S. GOVERNMENT INCOME FUND declares
dividends on a daily basis, but pays dividends on a monthly basis.

Unless you provide a written request to receive payments in cash, your dividends
will automatically be reinvested in additional shares of the fund. Dividends
paid in cash will be mailed to you via the U.S. Postal Service. Keep in mind,
undeliverable checks or checks not deposited within six months will be
reinvested in additional shares of the fund at the then current net asset value.
Dividends paid in cash or in additional shares are treated the same for tax
purposes.

If any of the funds realize capital gains, they will be distributed once every
12 months.

TAX INFORMATION

The funds will pay no federal income tax because they expect to meet certain
Internal Revenue Code requirements. The funds will be treated as single,
separate entities for federal income tax purposes so that income (including
capital gains, if any) and losses realized by one fund will not be combined for
tax purposes with those realized by the other funds. The funds will provide you
with detailed tax information for reporting purposes. You should consult your
own tax adviser regarding tax consequences under your state and local laws.

Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gain distributions,
received. This applies whether dividends and distributions are received in cash
or as additional shares. All dividends paid by the funds and distributions of
net realized short-term capital gains are taxable as ordinary income.
Distributions paid by a fund from net realized long-term capital gains are
taxable as long-term capital gains. The capital gain holding period and the
applicable tax rate is determined by the length of time a fund has held the
security and not the length of time that you have held shares in the fund. The
funds expect that, because of their investment objectives, distributions will
consist primarily of ordinary income.

ADDITIONAL TAX INFORMATION -- INSURED TAX-FREE BOND FUND

If you are a shareholder of the INSURED TAX-FREE BOND FUND, you are not required
to pay federal regular income tax on any dividends you receive from the fund
that represent net interest on tax-exempt municipal bonds. However,
shareholders of the fund may be required to pay federal alternative minimum
taxes on dividends representing net interest earned on some municipal bonds.

The alternative minimum tax (AMT) applies when it exceeds the regular tax for
the taxable year. AMT 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. The Tax Reform Act of 1986 treats interest on
certain private activity bonds as a tax preference item for both individuals and
corporations. Unlike traditional governmental purpose municipal bonds that
finance roads, schools, libraries, prisons and other public facilities, private
activity bonds provide benefits to private parties.

The fund is permitted to purchase all types of municipal bonds, including
private activity bonds. As a result, if the fund purchases 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 income earned on some temporary
investments and any net realized short-term gains are taxed as ordinary income.
Dividends are treated the same for tax purposes whether they are received in
cash or as additional shares. Distributions paid by a fund from net realized
long-term capital gains are taxable as long-term capital gains. The capital
gain holding period and the applicable tax rate is determined by the length of
time a fund has held the security and not the length of time that you have held
shares in the fund.

FINANCIAL HIGHLIGHTS

<TABLE>
STRATEGIC INCOME FUND1<F46>
(Class B Shares) Year ended November 30,
1998 1997 1996 1995
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.67 $10.50 $10.53 $10.00
- -------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.72 0.73 0.73 0.69
Net gains or losses on securities (both realized and unrealized) (0.94) 0.18 (0.04) 0.55
Total from investment operations (0.22) 0.91 0.69 1.24
Less distributions
Dividends (from net investment income) (0.73) (0.74) (0.72) (0.67)
Distributions (from capital gains) (0.10) -- -- (0.04)
Returns of Capital -- -- -- (0.00)2<F47>
Total distributions (0.83) (0.74) (0.72) (0.71)
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $9.62 $10.67 $10.50 $10.53
- -------------------------------------------------------------------------------------------------------------------
Total return3<F48> (2.16)% 9.02% 6.99% 12.71%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $202,354 $179,413 $110,775 $47,513
Gross ratio of expenses to average net assets5<F50> 1.46% 1.46% 1.56% 1.77%4<F49>
Net ratio of expenses to average net assets6<F51> 1.26% 1.26% 1.36% 1.47%4<F49>
Gross ratio of net income to average net assets5<F50> 6.99% 6.93% 7.06% 7.11%4<F49>
Net ratio of net income to average net assets6<F51> 7.19% 7.13% 7.26% 7.41%4<F49>
Portfolio turnover rate 146% 142% 201% 258%

1<F46> The date of initial public investment for class B shares was December 12, 1994.
2<F47> Distributions are determined in accordance with federal income tax regulations which may differ from generally accepted
accounting principles. These distributions did not represent a return of capital for federal income tax purposes.
3<F48> Based on net asset value, which does not reflect the contingent deferred sales charge, if applicable.
4<F49> Annualized.
5<F50> Before waivers and reimbursements.
6<F51> After waivers and reimbursements.
</TABLE>

<TABLE>
U.S. GOVERNMENT INCOME FUND1<F52>
(Class A Shares) Year ended November 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $9.87 $9.83 $9.98 $9.24 $10.25
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.56 0.57 0.57 0.60 0.55
Net gains or losses on securities
(both realized and unrealized) 0.30 0.04 (0.15) 0.74 (0.90)
Total from investment operations 0.86 0.61 0.42 1.34 (0.35)
Less distributions
Dividends (from net investment income) (0.55) (0.57) (0.57) (0.60) (0.55)
Distributions (from capital gains) -- -- -- -- (0.11)
Total distributions (0.55) (0.57) (0.57) (0.60) (0.66)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.18 $9.87 $9.83 $9.98 $9.24
- --------------------------------------------------------------------------------------------------------------------------------
Total return2<F53> 9.00% 6.46% 4.46% 14.90% (3.53)%
Ratios/supplemental data
Net assets, end of period (000's omitted) $148,773 $137,445 $138,874 $109,666 $87,924
Gross ratio of expenses to average net assets3<F54> 1.11% 1.09% 1.12% 1.12% 1.20%
Net ratio of expenses to average net assets4<F55> 0.91% 0.89% 0.92% 0.92% 0.97%
Gross ratio of net income to average net assets3<F54> 5.31% 5.68% 5.68% 6.03% 5.64%
Net ratio of net income to average net assets4<F55> 5.51% 5.88% 5.88% 6.23% 5.87%
Portfolio turnover rate 88% 140% 158% 236% 148%

1<F52>The date of initial public investment for class A shares was January 5, 1993. For the period from November 30, 1992 (start
of business) to January 4, 1993, all income was distributed to Federated Services Corp., the administrator at the time.
2<F53>Based on net asset value, which does not reflect the sales charge, if applicable.
3<F54>Before waivers and reimbursements.
4<F55>After waivers and reimbursements.
</TABLE>

U.S. GOVERNMENT INCOME FUND1<F56>
(Class B Shares) Year ended November 30,
1998
- -------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $9.89
- -------------------------------------------------------------------------
Income from investment operations
Net investment income 0.36
Net gains or losses on securities
(both realized and unrealized) 0.29
Total from investment operations 0.65
Less distributions
Dividends (from net investment income) (0.36)
Total distributions (0.36)
- -------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.18
- -------------------------------------------------------------------------
Total return2<F57> 6.71%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $305
Gross ratio of expenses to average net assets4<F59> 1.11%
Net ratio of expenses to average net assets5<F60> 0.91%3<F58>
Gross ratio of net income to average net assets4<F59> 5.31%
Net ratio of net income to average net assets5<F60> 5.51%3<F58>
Portfolio turnover rate 88%

1<F56>The date of initial public investment for class B shares was April 27,
1998.
2<F57>Based on net asset value, which does not reflect the contingent deferred
sales charge, if applicable.
3<F58>Annualized.
4<F59>Before waivers and reimbursements.
5<F60>After waivers and reimbursements.

<TABLE>
INSURED TAX-FREE BOND FUND1<F61>
(Class A Shares) Year ended November 30,

1998 1997
<S> <C> <C>
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.25 $10.00
- ----------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.46 0.44
Net gains or losses on securities
(both realized and unrealized) 0.26 0.24
Total from investment operations 0.72 0.68
Less distributions
Dividends (from net investment income) (0.46) (0.43)
Distributions (from capital gains) (0.02) --
Total distributions (0.48) (0.43)
- ----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.49 $10.25
- ----------------------------------------------------------------------------------
Total return2<F62> 7.20% 6.91%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $152,231 $128,591
Gross ratio of expenses to average net assets4<F64> 1.24% 1.24%3<F63>
Net ratio of expenses to average net assets5<F65> 0.79% 0.79%3<F63>
Gross ratio of net income to average net assets4<F64> 3.98% 4.21%3<F63>
Net ratio of net income to average net assets5<F64> 4.43% 4.66%3<F63>
Portfolio turnover rate 14% 15%

1<F61> The date of initial public investment for class A shares was December 30, 1996.
2<F62> Based on net asset value, which does not reflect the sales charge, if applicable.
3<F63> Annualized.
4<F64> Before waivers and reimbursements.
5<F65> After waivers and reimbursements.
</TABLE>

YEAR 2000 ISSUE

(FIRSTAR STELLAR FUNDS LOGO)

FOR MORE INFORMATION

YOU MAY OBTAIN THE FOLLOWING AND OTHER INFORMATION ON THE FIRSTAR STELLAR FUNDS
FREE OF CHARGE:

O ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The annual and semi-annual reports provide the funds' most recent financial
statements and portfolio listings. The annual report contains a discussion
of the market conditions and investment strategies that affected the funds'
performances during the last fiscal year.

O STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED MARCH 31, 1999
The SAI is incorporated into this prospectus by reference (i.e., legally
made a part of this prospectus). The SAI provides more details about the
funds' policies and management.

TO RECEIVE ANY OF THESE DOCUMENTS OR PROSPECTUSES ON THE FIRSTAR STELLAR FUNDS:

BY TELEPHONE
1-800-677-FUND

BY MAIL:
Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

ON THE INTERNET:
Text only versions of fund documents can be viewed online or downloaded from:
http://www.sec.gov and http://www.firstarstellarfunds.com

You may review and obtain copies of fund information (including the SAI) at the
SEC Public Reference Room in Washington, D.C. Please call 1-800-SEC-0330 for
information relating to the operation of the Public Reference Room. Copies of
the information may be obtained for a fee by writing the Public Reference
Section, Securities and Exchange Commission, Washington, D.C. 20549-6009.
Investment Company Act File # 811-05762

For Investor Services or to Request Information
1-800-677-FUND
1-414-287-3808

Firstar Stellar Funds
615 East Michigan Street
P.O. Box 701
Milwaukee, WI 53201-0701
www.firstarstellarfunds.com

FIRSTAR STELLAR FUNDS (LOGO)
SFBF-99

FIRSTAR STELLAR
FUNDS (LOGO)

STOCK FUNDS
PROSPECTUS

March 31, 1999

FIRSTAR STELLAR GROWTH EQUITY FUND

FIRSTAR STELLAR RELATIVE VALUE FUND

FIRSTAR STELLAR FUND

FIRSTAR STELLAR CAPITAL APPRECIATION FUND

FIRSTAR STELLAR INTERNATIONAL EQUITY FUND

TABLE OF CONTENTS

THE FUNDS
Overview of the Funds.............................................3
GROWTH EQUITY FUND................................................4
RELATIVE VALUE FUND...............................................7
STELLAR FUND......................................................9
CAPITAL APPRECIATION FUND.........................................12
INTERNATIONAL EQUITY FUND.........................................15
Management of the Funds...........................................19
Distribution of Shares............................................20
YOUR ACCOUNT INFORMATION
Description of Classes............................................21
Price of Shares...................................................21
Purchasing Shares.................................................23
Selling Shares....................................................25
Exchanging Shares.................................................26
Dividends, Capital Gain Distributions and Taxes...................27
ADDITIONAL INFORMATION
Financial Highlights..............................................28
Year 2000 Issue...................................................36
FOR MORE INFORMATION
See the last page for more information about the funds.

OVERVIEW

GOAL AND STRATEGIES OF THE STOCK FUNDS

The general goal of the Firstar Stellar stock funds is to maximize your capital
appreciation by investing in equity securities. The GROWTH EQUITY FUND focuses
its investments in growth-oriented equity securities of U.S. companies. The
RELATIVE VALUE FUND focuses on capital appreciation from equities of U.S.
companies that have value characteristics. The STELLAR FUND provides investors
with the opportunity to gain income and appreciation from both equity and
fixed-income investments. The CAPITAL APPRECIATION FUND invests in equity
securities of small to medium-sized U.S. companies. The INTERNATIONAL EQUITY
FUND seeks investment opportunities by investing in mutual funds that invest in
non-U.S. companies.

PRINCIPAL RISKS COMMON TO THESE FUNDS

The main risks of investing in the funds are:

O STOCK MARKET RISKS: Stock mutual funds are subject to stock market risks
and significant fluctuations in value. If the stock market declines in
value, the funds are likely to decline in value. Therefore, you may lose
money if the value of the funds decline.

O STOCK SELECTION RISKS: The stocks selected by the investment adviser may
decline in value or not increase in value when the stock market in general
is rising.

O BOND RISKS: To the extent the funds invest in bonds, they will be exposed
to the risks of bond investing. A bond's market value is affected
significantly by changes in interest rates. Generally, when interest rates
rise, the bond's market value declines and when interest rates decline, its
market value rises. Also, the longer a bond's maturity, the greater the
risk and the higher its yield. Conversely, the shorter a bond's maturity,
the lower the risk and the lower its yield. A bond's value can also be
affected by changes in the bond's credit quality rating or its issuer's
financial condition. Because bond values fluctuate, the fund's share price
fluctuates. So, when you sell your investment, you may receive more or less
money than you originally invested.

O LIQUIDITY RISKS: Liquidity risk is the risk that certain securities may be
difficult or impossible to sell at the time and price that the investment
adviser would like to sell. The adviser may have to lower the price, sell
other securities instead or forego an investment opportunity, any of which
could have a negative effect on fund management or performance.

O PORTFOLIO TURNOVER RISKS The adviser may engage in active trading of its
portfolio securities to achieve its investment goals. This practice could
result in the funds experiencing a high turnover rate (100% or more). High
portfolio turnover rates lead to increased costs, could cause you to pay
higher taxes and could negatively affect the fund's performance.

AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF FIRSTAR BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.

WHO MAY WANT TO INVEST

These funds may be appropriate for people who:

o wish to invest for the long term
o want to diversify their portfolios
o want to allocate some portion of their long-term investments to
aggressive equity investing
o are willing to accept a high degree of volatility and risk in exchange for
the opportunity to realize greater financial gains in the future

These funds may not be appropriate for people who:

o are investing for short terms
o are risk adverse

GROWTH EQUITY FUND

INVESTMENT GOAL

The GROWTH EQUITY FUND'S investment objective is to maximize capital
appreciation.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund attempts to achieve its investment goal by investing at least 65% of
the value of its total assets in growth-oriented domestic equity securities.
"Growth-oriented" securities are securities of U.S. companies that have market
capitalizations of $1.5 billion or more and, based on traditional research
techniques, the fund's investment adviser believes have earnings growth
potential superior to the S&P 500.

The adviser selects securities and attempts to maintain an acceptable level of
risk largely through the use of automated quantitative measurement techniques.
The adviser considers the following factors when using this research technique:

O price/earnings ratios,
O historical and projected earnings growth rates,
O historical sales growth rates,
O historical return on equity,
O market capitalization,
O average daily trading volume, and
O credit rankings based on nationally recognized statistical rating
organizations (NRSROs).

WHAT ARE "GROWTH-ORIENTED" SECURITIES?

Securities of U.S. companies with market capitalizations of $1.5 billion or
greater that show superior growth in earnings and revenues.

The investment adviser uses the quantitative model together with economic
forecasts and assessment of the risk and volatility of the company's industry.
When selling securities, the adviser considers three factors: (1) Have the
objectives of the fund been met? (2) Has the attractiveness of the securities
deteriorated? (3) Has the adviser's outlook changed? If the adviser can answer
each question positively, then the adviser will sell the securities.

The fund's domestic equity securities usually consist of U.S. common and
preferred stocks and warrants of companies with market capitalizations of $1.5
billion or greater. The stocks are listed on the New York or American Stock
Exchanges or traded in the over-the-counter market.

The fund may also invest in:

O domestic debt securities rated Baa or higher by Moody's or rated BBB or
higher by S&P or Fitch (i.e., notes, zero coupon bonds and convertible
securities of U.S. companies)
O government securities (i.e., direct obligations of the U.S. Treasury)
O real estate investment trusts
O investment grade structured fixed-income securities (i.e., mortgage-backed
securities, adjustable rate mortgage securities, collateralized mortgage
obligations and asset-backed securities)
O international securities (including other investment companies, American
Depositary Receipts and International Depositary Receipts)
O money market instruments

TEMPORARY INVESTMENTS To respond to adverse market, economic, political or
other conditions, the fund may invest up to 100% of its assets in U.S. and
foreign short-term money market instruments. The fund may invest up to 35% of
its assets in these securities to maintain liquidity. Some of the short-term
money market instruments include:

O commercial paper
O certificates of deposit, demand and time deposits and bankers' acceptances
O government securities
O repurchase agreements

To the extent the fund engages in this temporary, defensive strategy, the fund
may not achieve its investment objective.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

SMALL- AND MEDIUM-SIZE COMPANIES RISKS The fund may invest in the stocks of
small- to medium- sized companies. Small- and medium-size companies often have
narrower markets and more limited managerial and financial resources than
larger, more established companies. As a result, their performance can be more
volatile and they face greater risk of business failure, which could increase
the volatility of the fund's portfolio.

REAL ESTATE INVESTMENT TRUSTS RISKS Some of the risks of equity and mortgage
real estate investment trusts (REITs) are that they depend on management skills
and are not diversified. As a result, REITs are subject to the risk of
financing either single projects or any number of projects. REITs depend on
heavy cash flow and may be subject to defaults by borrowers and
self-liquidation. Additionally, equity REITs may be affected by any changes in
the value of the underlying property owned by the trusts. Mortgage REITs may be
affected by the quality of any credit extended. The adviser tries to minimize
these risks by selecting REITs diversified by sector (i.e. shopping malls,
apartment building complexes, health care facilities) and geographic location.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the GROWTH EQUITY
FUND'S returns. The bar chart indicates the risks of investing in the fund by
showing the changes in the fund's performance from year to year (on a calendar
year basis). The table shows how the fund's average annual returns for one-year
and since inception ended December 311998 compare with broad measures of market
performance. The fund's past performance is not necessarily an indication of
how the fund will perform in the future.

GROWTH EQUITY FUND - B SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1995 27.37%
1996 23.35%
1997 25.28%
1998 28.05%

Sales charges are not reflected in the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q4 1998 23.49%
WORST QUARTER: Q3 1998 (10.87)%

Average annual total return
through 12/31/98 1 Year Since inception
- --------------------------------------------------------------------
Growth Equity Fund B Shares1<F66> 23.05% 26.54%
Y Shares2<F67> 28.22% 24.54%
S&P 500 Index3<F68> 28.58% 30.51%
Lipper Growth & Income Average4<F69> 15.59% N/A
The average annual total returns above reflect the sales charges.

1<F66>B Shares commenced operations on December 12, 1994.
2<F67>Y Shares commenced operations on August 18, 1997.
3<F68>The S&P 500 Index is an unmanaged index of 500 domestic stocks created by
Standard & Poor's Corporation. The Index is heavily weighted toward
stocks with large market capitalizations and represents approximately
two-thirds of the total market value of all domestic common stocks.
4<F69>The Lipper Growth & Income Average shows the performance of a category of
mutual funds with similar goals to the GROWTH EQUITY FUND.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS B CLASS Y
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) None None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price)1<F70> 5.00% None
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON REINVESTED DIVIDENDS None None
REDEMPTION FEE None None
EXCHANGE FEE None None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS B CLASS Y
- --------------------------------------------------------------------------------
MANAGEMENT FEES 0.75% 0.75%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F71> 0.25% None
OTHER EXPENSES3<F72> 0.54% 0.54%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.54% 1.29%

1<F70> The contingent deferred sales charge is 5.00% in the first year,
declining to 1.00% in the fifth year and 0.00% thereafter. See "Price
of Shares."
2<F71> The Y shares are not subject to a Rule 12b-1 plan.
3<F72> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,
2.Your investment has a 5% return each year, and
3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------
CLASS B $657 $786 $939 $1,834
CLASS Y $131 $409 $708 $1,556

If you did not redeem your shares, you would pay the following expenses:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------
CLASS B $157 $486 $839 $1,834
CLASS Y $131 $409 $708 $1,556

Class descriptions are on page 21.
RELATIVE VALUE FUND

INVESTMENT GOAL

The RELATIVE VALUE FUND'S goal is to obtain the highest total return from a
combination of income and capital appreciation.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

To achieve its objective, the fund invests primarily in common stocks. The
stocks in which the fund may invest include stocks that the fund's investment
adviser believes represent the best values within each industry sector. In the
adviser's opinion, stocks with the best values present characteristics
consistent with low volatility, above average yields, and are under valued
relative to the stocks comprising the Standard & Poor's 500 Composite Stock
Price Index. Under normal circumstances, the fund will invest at least 70% of
its assets in common stocks, which may include stocks of foreign issuers. The
fund may invest a significant portion of its assets in investment grade
fixed-income securities such as domestic issues of corporate debt obligations
with short and intermediate terms.

The investment adviser uses traditional research techniques when choosing which
stocks to invest in. The adviser selects securities and attempts to maintain an
acceptable level of risk largely through the use of automated quantitative
measurement techniques. The adviser considers the following "value"
characteristics when using this research technique:

O price/earnings ratios,
O dividend yield,
O book value,
O assets to liabilities ratio,
O management ownership,
O average daily trading volume, and
O credit rankings based on nationally recognized statistical rating
organizations (NRSROs).

The investment adviser uses the quantitative model together with economic
forecasts and assessment of the risk and volatility of the company's industry.
The adviser assesses the earnings and dividend growth prospects of the various
companies' stock and then considers the risk and volatility of the company's
industry. The adviser typically invests in common stocks of companies that are
in the top 25% of their industries with regard to revenues. The adviser also
considers other factors such as product position or market share.

TEMPORARY INVESTMENTS To respond to adverse market, economic, political or
other conditions, the fund may invest up to 100% of its assets in short-term
temporary investments. Some of the short-term money market instruments
include:

O commercial paper
O certificates of deposit, demand and time deposits and bankers' acceptances
O U.S. government securities
O repurchase agreements

To the extent that the fund engages in this temporary, defensive strategy, the
fund may not achieve its investment objective.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the RELATIVE VALUE
FUND'S returns. The bar chart indicates the risks of investing in the fund by
showing the changes in the fund's performance from year to year (on a calendar
year basis). The table shows how the fund's average annual returns for one-
year, five-years and since the fund's inception ended December 31, 1998 compare
with broad measures of market performance. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.

RELATIVE VALUE FUND - A SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1992 11.19%
1993 13.73%
1994 -2.63%
1995 35.69%
1996 26.45%
1997 32.20%
1998 18.25%

Sales charges are not reflected on the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q4 1998 21.33%
WORST QUARTER: Q3 1998 (12.29)%

Average annual total return Since
through 12/31/98 1 Year 5 Year Inception
- --------------------------------------------------------------------------
Relative Value Fund A Shares1<F73> 12.91% 20.06% 16.66%
B Shares2<F74> N/A N/A 0.89%
Y Shares3<F75> 18.50% N/A 18.88%
S&P 500 Index4<F76> 28.58% 24.06% 19.22%
Lipper Growth & Income Average5<F77> 15.59% 18.53% 16.75%

The average annual total returns above reflect the sales charges.

1<F73>A Shares commenced operations on June 5, 1991.
2<F74>B Shares commenced operations on March 31, 1998.
3<F75>Y Shares commenced operations on August 18, 1997.
4<F76>The S&P 500 Index is an unmanaged index of 500 domestic stocks created by
Standard & Poor's Corporation. The Index is heavily weighted toward
stocks with large market capitalizations and represents approximately
two-thirds of the total market value of all domestic common stocks.
5<F77>The Lipper Growth & Income Average shows the performance of a category of
mutual funds with similar goals to the RELATIVE VALUE FUND.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS Y
- -------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) 4.50% None None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price)1<F78> None 5.00% None
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON REINVESTED DIVIDENDS None None None
REDEMPTION FEE None None None
EXCHANGE FEE None None None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A CLASS B CLASS Y
- -------------------------------------------------------------------------------
MANAGEMENT FEES 0.75% 0.75% 0.75%
DISTRIBUTION AND SERVICE (12B-1) FEES2<F79> 0.25% 0.25% None
OTHER EXPENSES3<F80> 0.49% 0.49% 0.49%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.49% 1.49% 1.24%

1<F78> The contingent deferred sales charge is 5.00% in the first year,
declining to 1.00% in the fifth year and 0.00% thereafter. See "Price
of Shares."
2<F79> Y shares are not subject to a Rule 12b-1 Plan.
3<F80> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,
2.Your investment has a 5% return each year, and
3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------
CLASS A $595 $900 $1,227 $2,149
CLASS B $652 $771 $913 $1,779
CLASS Y $126 $393 $681 $1,500

If you did not redeem your shares, you would pay the following expenses:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------
CLASS A $595 $900 $1,227 $2,149
CLASS B $152 $471 $813 $1,779
CLASS Y $126 $393 $681 $1,500

Class descriptions are on page 21.
STELLAR FUND

INVESTMENT GOAL

The STELLAR FUND seeks to maximize total return derived from a combination of
dividend income and capital appreciation.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund invests approximately 20% of net assets in each of the first four
categories listed below. The remaining 20% is invested in precious metal
securities or short-term securities or both. The fund's investment adviser
believes that by spreading the investment portfolio over several categories, the
fund can reduce the impact of drastic market movements that might affect any one
securities type. The fund will invest no more than 25% and no less than 15% in
any one category.

Within each category, the investment adviser attempts to reduce risk even
further by conducting careful investment analysis of each issuer. Part of the
adviser's analysis includes studying various value measures such as
price/earnings ratios, using ratings assigned by nationally recognized
statistical rating organizations, researching the company's credit, reviewing
the issuer's historical performance, examining the issuer's dividend growth
record and considering market trends.

THE FUND INVESTS IN THESE CATEGORIES OF SECURITIES:
1.domestic equity securities
2.domestic fixed-income securities (including structured fixed-income
securities)
3.international securities (equity and fixed income)
4.real estate securities (REITs)
5.precious metal securities
6.short-term securities

DOMESTIC EQUITY SECURITIES The equity portion of the fund includes U.S. common
and preferred stocks. The adviser chooses stocks that it believes to be
undervalued compared to stocks contained in the Standard & Poor's 500 Composite
Stock Price Index. The adviser considers the following factors when using this
research technique:

The investment adviser uses the quantitative model together with economic
forecasts and assessment of the risk and volatility of the company's industry.

DOMESTIC FIXED-INCOME SECURITIES The fixed-income portion of the fund includes
short to long-term, investment grade domestic corporate debt obligations,
obligations of the United States government, and notes, bonds, and discount
notes of U.S. government agencies or instrumentalities. The adviser selects
bonds based on the outlook for interest rates and their yields compared to other
bonds of similar quality and maturity. The fund will only invest in bonds rated
Baa or higher by Moody's Investors Service, Inc. or rated BBB or higher by S&P
or Fitch IBCA, Inc. If the bonds are unrated, the adviser will evaluate the
bonds before investing in them to determine if they are of similar quality to
the ratings indicated. The fixed-income portion of the fund also includes
mortgage-backed securities, adjustable rate mortgage securities, collateralized
mortgage obligations and asset-backed securities.

INTERNATIONAL SECURITIES The international portion of the fund includes equity
securities of non-U.S. companies and corporate and government fixed-income
securities denominated in non-U.S. currencies. The international equity
securities include international stocks traded domestically or abroad through
various stock exchanges, American Depository Receipts (ADRs) or International
Depository Receipts (IDRs). The fixed-income securities include ADRs, IDRs, and
government securities of other nations. The fund will only invest in securities
rated Baa or better by Moody's or BBB or better by S&P. If the securities are
unrated, the adviser will only invest in them if it deems the securities to be
of comparable quality. The fund may also invest in shares of open-end and
closed-end management investment companies which invest primarily in
international equity securities.

REAL ESTATE SECURITIES The real estate portion of the fund includes equity
securities and convertible debt securities of real estate related companies and
real estate investment trusts (REITs). The real estate securities are traded
publicly, primarily on an exchange. Real estate securities are not considered
domestic equity securities for purposes of the fund's asset allocation
limitation.

PRECIOUS METAL SECURITIES The precious metal securities of the fund include
domestic and international equity securities of companies that explore for,
extract, process, or deal in precious metals such as gold, silver palladium, and
platinum. The fund may also invest up to 5% of its net assets in domestic and
international asset-backed securities including debt securities, preferred
stock, or convertible securities for which the principal amount, redemption
terms, or conversion terms are related to the market price of some precious
metals such as gold bullion. The fund may purchase only asset-backed securities
rated Baa or better by Moody's or BBB or better by S&P. If the securities are
unrated, the adviser will only invest in them if it deems the securities to be
of comparable quality.

SHORT-TERM SECURITIES The short-term money market securities in which the fund
may invest include:

O mortgage-backed securities, adjustable rate mortgage securities,
collateralized mortgage obligations and asset-backed securities
O commercial paper rated A-1 by S&P, Prime-1 by Moody's or F-1 by Fitch
O instruments of domestic and foreign banks and savings associations (i.e.,
certificates of deposit, demand and time deposits and bankers' acceptances)
O short-term instruments which are not rated but are determined by the Adviser
to be of comparable quality to the securities in which the fund may invest
O domestic corporate debt obligations rated Baa or higher by Moody's or BBB or
higher by S&P or Fitch

O obligations of the U.S. government or its agencies or instrumentalities (U.S.
Treasury obligations)
O repurchase agreements
O money market mutual funds

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

FOREIGN SECURITIES RISK The fund can invest in foreign securities, which can
carry higher returns, but involve more risks than those associated with domestic
investments. Additional risks include currency fluctuations, political and
economic instability, differences in financial reporting standards and less
stringent regulation of securities markets.

SMALL- AND MEDIUM-SIZE COMPANIES RISKS The fund may invest in the stocks of
small- to medium-sized companies. Small- and medium-size companies often have
narrower markets and more limited managerial and financial resources than
larger, more established companies. As a result, their performance can be more
volatile and they face greater risk of business failure, which could increase
the volatility of the fund's portfolios.

REAL ESTATE INVESTMENT TRUSTS RISKS Some of the risks associated with real
estate investment trusts (REITs) are that equity and mortgage REITs depend on
management skills and are not diversified. As a result, REITs are subject to
the risk of financing either single projects or any number of projects. REITs
depend on heavy cash flow and may be subject to defaults by borrowers and
self-liquidation. Additionally, equity REITs may be affected by any changes in
the value of the underlying property owned by the trusts. Mortgage REITs may be
affected by the quality of any credit extended. The adviser tries to minimize
these risks by selecting REITs diversified by sector (i.e. shopping malls,
apartment building complexes, health care facilities) and geographic location.

PRECIOUS METAL SECURITIES RISKS Prices of precious metal securities and
precious metals tend to be subject to high volatility. The earnings and
financial condition of precious metal companies may be adversely affected by
volatile precious metal prices.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the STELLAR FUND'S
returns. The bar chart indicates the risks of investing in the fund by showing
the changes in the fund's performance from year to year (on a calendar year
basis). The table shows how the fund's average annual returns for one-year,
five-years and since the fund's inception ended December 31, 1998 compare with
broad measures of market performance. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.

THE STELLAR FUND - A SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1992 4.54%
1993 13.08%
1994 -2.11%
1995 16.30%
1996 15.43%
1997 12.26%
1998 6.08%

Sales charges are not reflected on the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q4 1998 8.02%
WORST QUARTER: Q3 1998 (7.24)%

Average annual total return Since
Through 12/31/98 1 Year 5 Year inception
- ------------------------------------------------------------------------------
Stellar Fund A Shares1<F81> 1.28% 8.36% 9.03%
Y Shares2<F82> 6.40% N/A 10.69%
Lehman Brothers Government/
Corporate Total Index3<F83> 9.47% 7.30% 8.98%
5 Class Index4<F84> 8.73% 11.00% 11.29%

The average annual total returns above reflect the sales charges.

1<F81> A Shares commenced operations on October 18, 1991.
2<F82> Y Shares commenced operations on April 11, 1994.
3<F83> Lehman Brothers Government/Corporate Total Index is an unmanaged index
composed of bonds which have maturities of at least one year and are
rated investment grade or higher by Moody's, S&P or Fitch, in that
order.
4<F84> The 5 Class Index consists of 20% each of the S&P 500 Index, Lehman
Brothers Government/Corporate Total Index, 90-day U.S. Treasury Bill,
Morgan Stanley Europe, Australasia and Far East (EAFE) Index and the
National Association of Real Estate Investment Trusts (NAREIT) Index.
The index is a blended index used to reflect the relative components of
the STELLAR FUND.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS Y
- ------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) 4.50% None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON
REINVESTED DIVIDENDS None None
REDEMPTION FEE None None
EXCHANGE FEE None None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A CLASS Y
- ------------------------------------------------------------------------------
MANAGEMENT FEES 0.95% 0.95%
DISTRIBUTION AND SERVICE (12B-1) FEES1<F85> 0.25% None
OTHER EXPENSES2<F86> 0.65% 0.65%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.85% 1.60%

1<F85> Y shares are not subject to a Rule 12b-1 Plan.
2<F86> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.
This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,
2.Your investment has a 5% return each year, and
3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
CLASS A $629 $1,006 $1,406 $2,522
CLASS Y $163 $505 $871 $1,900

Class descriptions are on page 21.

CAPITAL APPRECIATION FUND

INVESTMENT GOAL

The CAPITAL APPRECIATION FUND'S investment objective is to maximize capital
appreciation.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund attempts to achieve its investment goal by investing at least 50% of
the value of its total assets in equity securities of U.S. companies. The fund
typically invests in common stocks, preferred stocks and warrants of U.S.
companies that have between $200 million and $10 billion in equity and whose
shares are listed on the New York or American Stock Exchanges or traded
over-the-counter.

The fund's investment adviser selects securities and attempts to maintain an
acceptable level of risk largely through the use of automated quantitative
measurement techniques. The adviser considers the following factors when using
this research technique:

The investment adviser uses the quantitative model together with economic
forecast and assessment of the risk and volatility of each company's industry.

The fund may also invest in:

O domestic debt securities (i.e., notes, zero coupon bonds and convertible
securities of U.S. companies)
O U.S. government securities (i.e., direct obligations of the U.S. Treasury)
O international securities (including other investment companies, American
Depositary Receipts and International Depositary Receipts)
O money market instruments

O commercial paper
O certificates of deposit, demand and time deposits and bankers' acceptances
O U.S. government securities
O repurchase agreements
O other short-term instruments

To the extent the fund engages in this temporary, defensive strategy, the fund
may not achieve its investment objective.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

SMALL- AND MEDIUM-SIZE COMPANIES RISKS The fund may invest in the stocks of
small- to medium-sized companies. Small- and medium-size companies often have
narrower markets and more limited managerial and financial resources than
larger, more established companies. As a result, their performance can be more
volatile and they face greater risk of business failure, which could increase
the volatility of the fund's portfolios.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the CAPITAL
APPRECIATION FUND'S returns. The bar chart indicates the risks of investing in
the fund by showing the changes in the fund's performance from year to year (on
a calendar year basis). The table shows how the fund's average annual returns
for one-year and since inception ended December 31, 1998 compare with broad
measures of market performance. The fund's past performance is not necessarily
an indication of how the fund will perform in the future.

CAPITAL APPRECIATION FUND - A SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1995 15.17%
1996 9.46%
1997 19.69%
1998 10.01%

Sales charges are not reflected on the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q4 1998 18.83%
Worst Quarter: Q3 1998 (14.71)%

Average annual total return
through 12/31/98 1 Year Since inception
- ------------------------------------------------------------------------------
Capital Appreciation Fund1<F87> 5.02% 11.02%
S&P MidCap 400 Index2<F88> 19.11% 21.96%
Lipper MidCap Average3<F89> 12.32% N/A

The average annual total returns above reflect the sales charges.

1<F87> A Shares commenced operations on June 13, 1994.
2<F88> The S&P MidCap 400 Index is an unmanaged index of 400 domestic stocks
created by Standard & Poor's Corporation which measures the performance
of the mid-range section of the U.S. Stock Market.
3<F89> The Lipper MidCap Average shows the performance of a category of mutual
funds with similar goals to the CAPITAL APPRECIATION FUND.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A
- ---------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) 4.50%
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS A
- ---------------------------------------------------------------------------
MANAGEMENT FEES 0.95%
DISTRIBUTION AND SERVICE (12B-1) FEES1<F90> None
OTHER EXPENSES2<F91> 0.57%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.52%

1<F90> Currently, class A shares of the fund is not paying or accruing Rule
12b-1 fees. The class can pay up to 0.25% of average daily net assets
as a Rule 12b-1 fee to the distributor if a Y class of shares is
created.
2<F91> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------
CLASS A $598 $909 $1,242 $2,181

Class descriptions are on page 21.

INTERNATIONAL EQUITY FUND

INVESTMENT GOAL

The INTERNATIONAL EQUITY FUND'S investment objective is to achieve long-term
capital appreciation.

INVESTMENT POLICIES, PORTFOLIO SECURITIES AND RISKS

To achieve its investment goal, the fund invests, under normal market
conditions, at least 65% of the value of its total assets in shares of other
mutual funds whose portfolios consist of equity securities of non-U.S. issuers.
As an operational policy, the fund will likely invest substantially all of its
assets in international equity funds, but may invest a small portion in
individual foreign securities.

The fund invests in other international equity funds (i.e., funds that invest
primarily in equity securities of companies located in 3 or more countries
outside the U.S.)

The fund may purchase shares of both load and no-load funds including those with
a contingent deferred sales charge. However, the fund anticipates that it will
generally purchase no-load fund shares that qualify for a reduced sales charge
or sales charge waiver. The Investment Company Act of 1940 restricts the fund's
ability to purchase securities of another mutual fund, if as a result, the fund
(together with any affiliates) would own more than 3% of the total outstanding
securities of that mutual fund.

The investment adviser identifies and selects a varied portfolio of
international equity funds which represents the greatest long-term capital
growth potential based on the adviser's analysis of many factors. For instance,
the adviser may look for international equity funds that invest primarily in
emerging markets or funds that focus their investments on geographic regions.

INVESTING IN NON-U.S. SECURITIES PROVIDES YOU WITH 3 POTENTIAL OPPORTUNITIES:
1.The opportunity to invest in foreign issuers believed to have superior growth
potential;
2.The opportunity to invest in foreign countries with economic policies or
business cycles different from the U.S.; and
3.The opportunity to reduce portfolio volatility to the extent that the
securities markets inside and outside the U.S. do not move in harmony.

Before investing in an international equity fund, the adviser

FIRST: assesses the relative attractiveness of individual countries,
geographic regions and/or emerging markets by examining the opinions
of various foreign market analysts such as Lehman Brothers, and Morgan
Stanley Dean Witter.

SECOND: considers the expected returns and risks of the fund relative to the
industries in which the fund invests. The adviser considers whether
the fund and the companies in which it invests have solid management,
new product lines. The adviser also performs a quantitative analysis
by considering a company's price/earnings ratios and projected
earnings.

THIRD: involves an initial peer group screening process that assesses fund
investment style, objectives, policies and management. The peer group
also considers independent rating services such as Baseline, Lehman
Brothers, and Morgan Stanley Dean Witter.

If, in the adviser's view, the mutual fund meets these criteria, then the
adviser will further evaluate the mutual fund's investment policies, historic
total return, size, volatility and operating expenses over various time periods.
The adviser also considers the differences between the funds and another mutual
fund's investment restrictions when making any investment decisions.

UNDERLYING FUNDS The underlying international equity funds in which the fund
invests may have similar policies as the fund, although this is not required.
Underlying funds may invest up to 100% of their total assets in equity
securities of foreign issuers, including international stocks.

Although the fund is a diversified investment portfolio, it may invest in
non-diversified mutual funds or in funds that invest a substantial portion of
its assets in a single country. This may result in greater fluctuation in the
total market value of the underlying fund's portfolio because of the higher
percentage of investments among fewer issuers or in a single country. The fund
intends to reduce these risks by holding shares of multiple funds.

The underlying funds may also be authorized to invest up to 100% of their
respective assets in securities of foreign issuers and engage in foreign
currency transactions with respect to these investments. The underlying funds
may invest primarily in either the securities of emerging market countries or in
the securities of a single country. The funds may invest 35% or more of their
respective assets in high yield securities (junk bonds) or warrants. They may
engage in short selling and in leveraged borrowing and enter into interest rate
swaps, currency swaps and other types of swap agreements such as caps, collars
and floors.

The fund will normally invest in open-end management investment companies, but
may also invest in closed-end management investment companies and/or unit
investment trusts. Unlike open-end funds that offer and sell their shares at
net asset value plus any applicable sales charge, the shares of closed-end funds
may trade at a market value that represents a premium, discount or spread to net
asset value.

TEMPORARY INVESTMENTS To respond to adverse market, economic, political or
other conditions, the fund may invest up to 100% of its total assets in money
market mutual funds or in short-term debt securities. The fund may invest up to
35% of the total assets in these securities to maintain liquidity. Short-term
debt securities include:

O commercial paper
O certificates of deposit, demand and time deposits and bankers' acceptances
O U.S. government securities
O repurchase agreements
O other short-term instruments

To the extent the fund engages in this temporary, defensive strategy, the fund
may not achieve its investment objective.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

UNDERLYING FUNDS RISKS The fund's performance directly relates to the
performance of the funds in which it invests. This investment strategy also
subjects the fund to additional expenses and certain tax consequences that would
not exist if you invested in those funds directly. By investing in the fund,
you bear not only the fund's total operating expenses, but the operating
expenses of the underlying funds as well.

FOREIGN SECURITIES RISKS Investing in foreign securities can carry higher
returns than those associated with domestic investments. However, foreign
securities may be substantially riskier than domestic investments. The
economies of foreign countries may differ from the U.S. economy in such respects
as growth of gross domestic product, rate of inflation, currency depreciation,
capital reinvestment, resource self-sufficiency, and balance of payments
position. Furthermore, the economies of developing countries generally are
heavily dependent on international trade and, accordingly, have been, and may
continue to be, adversely affected by trade barriers, exchange controls, managed
adjustments in relative currency values and other protective measures imposed or
negotiated by the countries with which they trade. These economies also have
been, and may continue to be, adversely affected by economic conditions in the
countries with which they trade.

Funds may be required to obtain prior governmental approval for foreign
investments in some countries under certain circumstances. Governments may
require approval to invest in certain issuers or industries deemed sensitive to
national interests, and the extent of foreign investment in certain debt
securities and domestic companies may be subject to limitation. Individual
companies may also limit foreign ownership to prevent, among other things,
violation of foreign investment limitations.

Some foreign investments may risk being subject to repatriation controls that
could render such securities illiquid. Other countries might undergo
nationalization, expropriation, political changes, governmental regulation,
social instability or diplomatic developments (including war) that could
adversely affect the economies of such countries or the value of the investments
in those countries. For this reason, funds that invest primarily in the
securities of a single country will be greatly impacted by any political,
economic or regulatory developments affecting the value of the securities.
Additional risks include currency fluctuations, political and economic
instability, differences in financial reporting standards and less stringent
regulation of securities markets.

SMALL- AND MEDIUM-SIZE COMPANIES RISKS The fund may invest in the stocks of
small- to medium-sized companies. Small- and medium-size companies often have
narrower markets and more limited managerial and financial resources than
larger, more established companies. As a result, their performance can be more
volatile and they face greater risk of business failure, which could increase
the volatility of the fund's portfolios.

HIGH-YIELD BOND RISKS The fund (via underlying funds) may invest in high-yield
bonds (generally referred to as junk bonds). These bonds involve greater risks,
including the increased possibility that the bond's issuer may not be able to
make its payments of interest and principal. If that happens, the fund's share
price would decrease and its income distributions would be reduced.

FUTURES AND OPTIONS ON FUTURES RISKS The fund (via underlying funds) may use
futures and options on futures for hedging purposes only. The hedging strategy
may not be successful if the portfolio manager is unable to accurately predict
movements in the prices of individual securities held by a fund or if the
strategy does not correlate well with the fund's investments. The use of
futures and options on futures, which are commonly referred to as derivatives,
may produce a loss for the fund, even when used only for hedging purposes.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the INTERNATIONAL
EQUITY FUND'S returns. Although the fund has been in operation for only one
full calendar year, the bar chart is intended to give some indication of the
risks of an investment in the fund. The table shows how the fund's average
annual returns for one-year and since inception ended December 31, 1998 compare
with those of a broad measure of market performance. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.

INTERNATIONAL EQUITY FUND - A SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1998 8.51%

Sales charges are not reflected on the bar chart. If these amounts were
reflected, returns would be less than those shown.

BEST QUARTER: Q4 1998 16.59%
Worst Quarter: Q3 1998 (15.65)%

Average annual total return Since
through 12/31/98 1 Year Inception
- ---------------------------------------------------------------------------
International Equity Fund A Shares1<F92> 6.90% 6.41%
EAFE Index2<F93> 18.24% 17.65%

The average annual total returns above reflect the sales charges.
1<F92> A Shares commenced operations on December 3, 1997.
2<F93> The Morgan Stanley Europe, Australasia and Far East (EAFE) Index is
widely used to measure the performance of European, Australian, New
Zealand and Far Eastern Stock Markets. The Index is composed of
securities drawn from 21 countries in the above regions.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A
- ---------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) 1.50%
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) Class A
- ---------------------------------------------------------------------------
MANAGEMENT FEES 0.75%
DISTRIBUTION AND SERVICE (12B-1) FEES1<F94> None
OTHER EXPENSES2<F95> 0.76%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.51%

1<F94> Currently, A shares of the fund are not paying or accruing Rule 12b-1
fees. The class can pay up to 0.25% of average daily net assets as a
Rule 12b-1 fee to the distributor if a Y class of shares is created.
2<F95> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily
net assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds.

This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,
2.Your investment has a 5% return each year, and
3.The fund's operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------
CLASS A $301 $620 $961 $1,924

Class descriptions are on page 21.

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISER

The investment adviser for the funds is Firstar Bank, N.A. The adviser is
located at 425 Walnut Street, Cincinnati, Ohio 45202. The investment decisions
made by Firstar Bank are subject to direction of the funds' board of trustees.
(The Statement of Additional Information contains more information regarding the
board of trustees.) The adviser conducts investment research and supervision
for the funds and is responsible for the purchase and sale of securities for the
funds' portfolios. The adviser receives an annual fee from each fund for its
services as follows:

The amounts shown represent a percentage of each fund's average daily net
assets.

Growth Equity Fund 0.75%
Relative Value Fund 0.75%
Stellar Fund 0.95%
Capital Appreciation Fund 0.95%
International Equity Fund 0.75%

The merger has produced no significant changes to the management of the Adviser.
Together, the two banks have become the 21st largest bank in the United States
and have blended an expertise of trust administration and investments together
with extensive knowledge in the mutual fund industry.

PORTFOLIO MANAGERS
References to Firstar Bank may refer to what was formerly known as "Star Bank."

JOSEPH P. BELEW, a Vice President, Trust Officer and Portfolio Manager of the
FirstarTrust Division at Firstar Bank, N.A., Butler County, has been employed by
Firstar Bank in various capacities since 1979. Mr. Belew has been the portfolio
manager of the RELATIVE VALUE FUND since its inception in June 1991. He earned
a Bachelor of Business Administration degree in Business Management from Belmont
College.

DONALD L. KELLER, Senior Vice President and Chief Investment Officer of Firstar
Bank since 1998, has been employed by Firstar Bank in various capacities since
1982. Mr. Keller has managed the GROWTH EQUITY FUND since its inception in
October 1994. He managed the domestic equity securities component of the
STELLAR FUND from its inception in October 1991 through December 1995. He also
supported the domestic and international equity and fixed income components of
CAPITAL APPRECIATION FUND from its inception in June 1994 through December 1995.
Mr. Keller became the lead manager of the CAPITAL APPRECIATION FUND in March
1999. Mr. Keller earned a Bachelor of Business Administration Degree in Finance
and Accounting from the University of Cincinnati. He also earned his Masters in
Finance from Xavier University.

MARK DUBOIS, CFA, is a Vice President and Trust Officer in FirstarTrust's
Personal Trust area. As a Senior Portfolio Manager, Mr. DuBois has been
responsible for implementing and managing Firstar Bank's investment policy in
personal trusts, agencies, and IRAs since 1994. He is also the Health Care
analyst for FirstarTrust. Mr. DuBois has managed the domestic stock portion of
the STELLAR FUND since November 1997. Mr. DuBois joined Firstar Bank in 1986,
after graduating from Indiana University with a degree in Economics. In 1990,
he received his Chartered Financial Analyst designation.

T. ANDREW JANES, J.D., CFA, is a Senior Portfolio Manager and Trust Officer. He
has worked in the financial arena since 1986 with experience in portfolio
management, investment research and personal and ERISA trust administration.
Mr. Janes has managed the international stock portion of the STELLAR FUND since
November 1997. In March 1999, Mr. Janes became the portfolio manager of the
INTERNATIONAL EQUITY FUND and became the lead manager of the STELLAR FUND.
Mr. Janes joined Firstar Bank in 1991. He completed his undergraduate studies
at the Ohio State University where he earned a Bachelor of Science in Economics.
He then went on to complete his Juris Doctor at the Capital University School of
Law. Mr. Janes also holds the Chartered Financial Analyst designation.

KIRK F. MENTZER, Vice President and Director of Fixed Income Research for the
Capital Management Division of Firstar Bank since 1992, has been employed by
Firstar Bank in various capacities since 1989. Mr. Mentzer has managed the
domestic fixed income component of the STELLAR FUND since its inception in
October 1991 and has managed the cash equivalent components of the various
Firstar Stellar Funds (formerly Star Funds) since June 1998. Mr. Mentzer earned
a Bachelor of Business Administration degree in Finance from the University of
Cincinnati and a Masters degree in Finance from Xavier University.

FUND ADMINISTRATION, FUND ACCOUNTING, DIVIDEND DISBURSEMENT, AND CUSTODY
SERVICES

Firstar Mutual Fund Services, LLC, an affiliate of the funds' investment
adviser, provides administrative, accounting and dividend disbursement services
to the Firstar Stellar Funds and is located in Milwaukee, Wisconsin. Firstar
Bank, N.A., the fund's investment adviser, also serves as custodian for the
funds.

DISTRIBUTION OF SHARES

DISTRIBUTOR

Edgewood Services, Inc. is the distributor for shares of the funds. Edgewood is
based in Pittsburgh, Pennsylvania and is the distributor for a number of
investment companies around the country.

RULE 12B-1 PLAN

Currently, the CAPITAL APPRECIATION FUND and the INTERNATIONAL EQUITY FUND are
not paying or accruing Rule 12b-1 fees. These funds will only start paying the
Rule 12b-1 fee when a "Y" class of shares is created in those funds. Whenever
Edgewood deems it appropriate, Edgewood may, from time to time, voluntarily
reduce its compensation under the Rule 12b-1 Plan to the extent expenses of the
shares exceed a certain limit. Rule 12b-1 fees are paid out of fund assets on
an on-going basis. Over time, these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.

DESCRIPTION OF CLASSES

CLASS A SHARES

Class A shares are regular retail shares and may be purchased by individuals or
IRAs. With class A shares, you may pay a sales charge when you invest. Certain
class A shares also impose a Rule 12b-1 fee (as discussed previously) which is
assessed against the shares of the fund. Currently, the STELLAR FUND, CAPITAL
APPRECIATION FUND, RELATIVE VALUE FUND and INTERNATIONAL EQUITY FUND sell class
A shares. For more information on the sales charges, see "Price of Shares."

CLASS B SHARES

Class B shares are regular retail shares and may be purchased by individuals or
IRAs. With class B shares, a sales charge may be imposed if you redeem your
shares within a certain time period. If you redeem your class B shares within
five full years of the date you purchased, a contingent deferred sales charge
(CDSC) may be charged by the funds' distributor. Certain class B shares also
impose a Rule 12b-1 fee. Currently, only the RELATIVE VALUE FUND and the GROWTH
EQUITY FUND offer class B shares. For more information on the CDSC, see "Price
of Shares."

CLASS Y SHARES

The Y class of shares is available only to Firstar Bank's trust or institutional
investors. With class Y shares, you do not pay any sales charges, nor is a
12b-1 fee imposed. Similar to the other classes, the class Y shares do pay
investment management fees and other fees. Currently, the STELLAR FUND, the
RELATIVE VALUE FUND and the GROWTH EQUITY FUND sell class Y shares.

PRICE OF SHARES

NAV =
ASSETS - LIABILITIES
--------------------
# OUTSTANDING SHARES

HOW NAV IS DETERMINED

O days on which there are insignificant changes in the value of a fund's
portfolio securities to materially affect the net asset value
O days during which no shares are purchased or redeemed
O the following holidays
o New Year's Day o Good Friday o Labor Day
o Martin Luther King, Jr.'s Day o Memorial Day o Thanksgiving Day
o Presidents' Day o Independence Day o Christmas Day

DETERMINING MARKET VALUE OF SECURITIES

Market or fair values of the funds' portfolio securities are determined as
follows:
1.For equity securities: according to the last sale price on a national
securities exchange, if applicable.
2.In the absence of recorded sales for listed equity securities: according to
the mean between the last closing bid and asked prices.
3.For unlisted equity securities: latest bid prices.
4.For bonds and other fixed-income securities: as determined by an independent
pricing service.
5.For short-term obligations: according to the mean between bid and asked
prices as furnished by an independent pricing service.
6.For short-term obligations with remaining maturities of 60 days or less at
the time of purchase: at amortized cost.

7.For all other securities: at fair value as determined in good faith by the
funds' board of trustees.

Regarding the INTERNATIONAL EQUITY FUND, the underlying funds in which the fund
invests may value securities in their portfolios for which market quotations are
readily available at their current market value (generally the last reported
sales price) and all other securities and assets at fair value pursuant to
methods established in good faith by the board of directors/trustees of the
underlying fund.

TRADING IN FOREIGN SECURITIES

WHAT SHARES COST - CLASS Y SHARES

If you purchase class Y shares of the STELLAR FUND, RELATIVE VALUE FUND and
GROWTH EQUITY FUND, you will pay their NAV next determined after your order is
received. There is no sales charge on this class at the time you purchase your
shares.

WHAT SHARES COST - CLASS A SHARES

If you purchase class A shares of the CAPITAL APPRECIATION FUND, STELLAR FUND or
the RELATIVE VALUE FUND, you will pay the net asset value next determined after
your order is received plus a sales charge (shown in percentages below)
depending on the amount of your investment:

SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE OF A PERCENTAGEOF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
- ---------------------------------------------------------------------------
LESS THAN $100,000 4.50% 4.71%
$100,000 - $249,999.99 3.75% 3.90%
$250,000 - $499,999.99 2.50% 2.56%
$500,000 - $749,999.99 2.00% 2.04%
$750,000 - $999,999.99 1.00% 1.01%
$1 MILLION + 0.25% 0.25%

If you purchase class A shares of the INTERNATIONAL EQUITY FUND, you will pay
the net asset value next determined after your order is received plus a sales
charge as follows:

SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE OF A PERCENTAGE OF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
- ---------------------------------------------------------------------------
LESS THAN $100,000 1.50% 1.52%
$100,000 - $249,999.99 1.00% 1.01%
$250,000 - $499,999.99 0.75% 0.76%
$500,000 + 0.50% 0.50%

NOTE: These sales charges are not imposed on shares purchased with reinvested
dividends.

WAIVERS - CLASS A SHARES

The following persons will not have to pay a sales charge on class A shares:

O Employees and retired employees of Firstar Bank (or Star Bank), or their
affiliates and members of their families (including parents, grandparents,
siblings, spouses, children, and in-laws) of such employees or retired
employees;
O FirstarTrust customers of Firstar Corporation and its subsidiaries; and
O non-trust customers of financial advisers

REDUCING YOUR SALES CHARGE - CLASS A SHARES

You can reduce the sales charge on purchases of class A shares by:

O purchasing larger quantities of shares or putting a number of purchases
together to obtain the quantity discounts indicated above;
O signing a letter of intent that you intend to purchase more than $100,000
worth of shares over the next 13 months;
O using the reinvestment privilege which allows you to redeem shares and then
immediately reinvest them without a sales charge within 60 days; and
O combining concurrent purchases of class A shares from different funds.

WHAT SHARES COST - CLASS B SHARES

If you purchase class B shares of the RELATIVE VALUE FUND or the GROWTH EQUITY
FUND, you will pay the net asset value next determined after your order is
received. There is no sales charge on this class at the time you purchase your
shares. However, there is a contingent deferred sales charge on Class B shares
at the time you redeem. Any applicable CDSC will be imposed on the lesser of
the net asset value of the redeemed shares at the time of purchase or the net
asset value of the redeemed shares at the time of redemption in the amount
indicated by the table below:

YEAR OF REDEMPTION CONTINGENT DEFERRED
AFTER PURCHASE SALES CHARGE
-------------- ------------
YEAR 1 5.00%
YEAR 2 4.00%
YEAR 3 3.00%
YEAR 4 2.00%
YEAR 5 1.00%
YEAR 6 0.00%

In computing the amount of CDSC you could be charged, redemptions are deemed to
have occurred in the following order:

1.shares of the fund you purchased by reinvesting your dividends and long-term
capital gains
2.shares of a fund you held for more than five full years from the date of
purchase
3.shares of a fund you held for fewer than five full years on a first-in,
first-out basis

O shares purchased by reinvesting your dividends or distributions of short or
long-term capital gains
O shares held for more than five full years after purchase
O redemptions made following death or disability (as defined by the IRS)
O redemptions made as minimum required distributions under an IRA or other
retirement plan to a shareholder who is 70 1/2 years old or older
O redemptions made in shareholder accounts that do not have the required
minimum balance

PURCHASING SHARES

OPENING AN ACCOUNT

To open an account, first determine if you are buying class A, B or Y shares
(see page 21 for class descriptions.) The minimum initial investment amounts
for each fund are as follows:

Classes A and B Shares
- ---------------------------------------------------------------------------
O $1,000 for individuals
O $500 for Education IRA customers
O $25 for Firstar Bank Connections Group Banking customers and Firstar Bank
employees and members of their immediate family, participants in the Firstar
Bank Student Finance 101 Program who establish an automatic investment program
and persons contributing to SIMPLE IRAs

Class Y Shares
- ---------------------------------------------------------------------------
O $1,000 for trust or institutional customers of Firstar Bank ($1,000 may be
determined by combining the amount in all mutual fund accounts you maintain
with Firstar Bank)
- ---------------------------------------------------------------------------
ADDITIONAL INVESTMENTS MAY BE MADE IN ANY AMOUNT.

When making a purchase request, make sure your request is in good order. "Good
order" means your purchase request includes:
O the name of the fund
O the dollar amount of shares to be purchasedpurchase application or investment
stub
O check payable to Firstar Stellar Funds

RECEIPT OF ORDERS

Shares may only be purchased on days the New York Stock Exchange and the Federal
Reserve wire system are open for business. Your order will be considered
received after your check is converted into federal funds and received by
Firstar Bank (usually the next business day). If you are paying with federal
funds (wire), your order will be considered received when Firstar Bank receives
the federal funds.

TIMING OF REQUESTS

The price per share will be the next asset value next computed after the time
your request is received in good order and accepted by the funds or the funds'
authorized agent. All requests received in good order by the funds before 4:00
p.m. (Eastern time) will be executed on that same day. Requests received after
4:00 p.m. will be processed on the next business day.

<TABLE>
------------------------------------------------------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BY TELEPHONE Call Firstar Stellar Funds at 1-800-677-FUND Call Firstar Stellar Funds at
(FIRSTAR BANK CUSTOMERS ONLY) to place the order. (Note: For security reasons, 1-800-677-FUND to place the order.
requests by telephone will be recorded.) (Note: For security reasons, requests by
telephone will be recorded.)
------------------------------------------------------------------------------------------------------------------------------
BY MAIL Make your check payable to "Firstar Stellar Fill out the investment stub from an
Funds." Forward the check and your application account statement, or indicate the fund
to the address below. No third party checks will name and account number on your check.
be accepted. If your check is returned for any Make your check payable to "Firstar
reason a $25 fee will be assessed against Stellar Funds." Forward the check and
your account. stub to the address below.
------------------------------------------------------------------------------------------------------------------------------
BY FEDERAL FUNDS WIRE Forward your application to Firstar Stellar Funds Call Firstar Stellar Funds at
at the address below. Call 1-800-677-FUND to 1-800-677-FUND to notify of incoming
obtain an account number. Wire funds using the wire. Use the following instructions:
instructions to the right. Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit:(name of fund, share class)
(name/title on the account)
(account #)
------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN Open a fund account with one of the other If you didn't set up an automatic
methods.If by mail, be sure to include your investment plan with your original
checking account number on the appropriate application, call Firstar Stellar Funds at
section of your applicatio and enclose a voided 1-800-677-FUND. Additional investments
check or deposit slip with initial purchase (minimum of $25 per period) will be taken
application. automatically monthly or quarterly from
your checking account.
------------------------------------------------------------------------------------------------------------------------------
THROUGH SHAREHOLDER SERVICE To purchase shares for another investor, call To purchase shares for another investor,
ORGANIZATIONS Firstar Stellar Funds at 1-800-677-FUND. call Firstar Stellar Funds at
1-800-677-FUND.
------------------------------------------------------------------------------------------------------------------------------
BY EXCHANGE Call 1-800-677-FUND to obtain exchange Call 1-800-677-FUND to obtain exchange
information. See page 26. information. See page 26.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

ADDRESS FOR FIRSTAR STELLAR FUNDS

You should use the following addresses when sending documents by mail or by
overnight delivery:

BY MAIL BY OVERNIGHT DELIVERY
- ------- ---------------------
Firstar Stellar Funds Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202

SELLING SHARES

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
TO SELL SOME OR ALL OF YOUR SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
BY TELEPHONE Call Firstar Stellar Funds at 1-800-677-FUND to sell any amount of shares.
(NOTE: For security reasons, requests by telephone will be recorded.)
- ------------------------------------------------------------------------------------------------------------------------------------
BY MAIL Send a letter instructing the Firstar Stellar Funds to redeem the dollar
amount or number of shares you wish. The letter should contain the fund's
name, the account number and the number of shares or the dollar amount of
shares to be redeemed. Be sure to have all shareholders sign the letter. If
your account is an IRA, signatures must be guaranteed and your request must
indicate whether or not 10% withholding should apply. Requests submitted
without an election whether or not to withhold will be subject to
withholding.
- ------------------------------------------------------------------------------------------------------------------------------------
BY FEDERAL FUNDS WIRE Call Firstar Stellar Funds at 1-800-677-FUND to request the amount of money
you want. Be sure to have all necessary information from your bank. Your
bank may charge a fee to receive wired funds.
- ------------------------------------------------------------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN Call Firstar Stellar Funds at 1-800-677-FUND to arrange for regular monthly
or quarterly fixed withdrawal payments. The minimum payment you may receive
is $25 per period. Note that this plan may deplete your investment and
affect your income or yield. Also, it isn't wise to make purchases of class
B shares while participating in this plan because of the sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER SERVICE ORGANIZATION Consult your account agreement for information on redeeming shares.
- ------------------------------------------------------------------------------------------------------------------------------------
BY EXCHANGE Call 1-800-677-FUND to obtain exchange INFORMATION. See page 26 for further
information.
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

WHEN REDEMPTION PROCEEDS ARE SENT TO YOU

Your shares may only be redeemed on days on which the funds compute their net
asset value. Your redemption requests cannot be processed on days the New York
Stock Exchange is closed or on federal holidays which restrict wire transfers.

When making a redemption request, make sure your request is in good order. "Good
order" means your letter of instruction includes:
O the name of the fund
O the number of shares or the dollar amount of shares to be redeemed
O signatures of all registered shareholders exactly as the shares are
registered (guaranteed for IRAs)
O the account registration number

All requests received in good order by Firstar Stellar Funds before 3:30 p.m.
(Eastern time), will normally be wired to the bank you indicate or mailed on the
following day to the address of record. In no event will proceeds be wired or a
check mailed more than 7 calendar days after Firstar receives a proper
redemption request.

VALUE OF SHARES SOLD

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, Firstar Stellar
Funds may mail you a notice if your account falls below $1,000 requesting that
you bring the account back up to $1,000 or close it out. If you do not respond
to the request within 30 days, Firstar Stellar Funds may close the account on
your behalf and send you the proceeds. If you have an account through a
shareholder service organization, consult your account agreement for information
on accounts with low balances.

SIGNATURE GUARANTEES

You will need your signature guaranteed if:

O you are redeeming shares from an IRA account
O you request a redemption to be made payable to a person not on record with
the funds, or
O you request that a redemption be mailed to an address other than that on
record with the funds

You may obtain signature guarantees from most trust companies, commercial banks
or other eligible guarantor institutions.

EXCHANGING SHARES

Exercising the exchange privilege is really two transactions: a sale of one fund
and the purchase of another.

Exercising the exchange privilege is really two transactions: a sale of one fund
and the purchase of another. The same policies that apply to purchases and
sales apply to exchanges, including minimum investment amounts. Keep in mind
that some funds may have higher sales charges than other funds and you may have
to pay the difference in fee. Exchanges also have the same tax consequence as
ordinary sales and purchases and you could realize short or long-term capital
gains or losses. Generally, exchanges may only be made between identically
registered accounts unless you send written instructions with a signature
guarantee.

REINSTATEMENT PRIVILEGE

DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES

DIVIDENDS AND CAPITAL GAINS

The GROWTH EQUITY FUND, RELATIVE VALUE FUND and STELLAR FUND each declare and
pay dividends on a quarterly basis. The CAPITAL APPRECIATION FUND and the
INTERNATIONAL EQUITY FUND declare and pay dividends on an annual basis.

If any of the funds realize capital gains, they will be distributed once every
12 months.

TAX INFORMATION

The funds will pay no federal income tax because they expect to meet certain
Internal Revenue Code requirements. The funds will be treated as single,
separate entities for federal income tax purposes so that income (including
capital gains, if any) and losses realized by one fund will not be combined for
tax purposes with those realized by the other funds. The funds will provide you
with detailed tax information for reporting purposes. You should consult your
own tax adviser regarding tax consequences under your state and local laws.

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. All dividends paid by the funds and distributions of
net realized short-term capital gains are taxable as ordinary income.
Distributions paid by a fund from net realized long-term capital gains are
taxable as long-term capital gain. The capital gain holding period and the
applicable tax rate is determined by the length of time a fund has held the
security and not the length of time that you have held shares in the fund. The
funds expect that, because of their investment objectives, distributions will
consist primarily of long- and short-term capital gains. Each fund will provide
you with detailed tax information for reporting purposes.

You should consult your own tax advisers regarding the status of your accounts
under state and local tax laws.

FINANCIAL HIGHLIGHTS

The financial highlights tables set forth below are intended to help you
understand the funds' financial performance for the past 5 years or for the
funds' period of operations, as the case may be. Most of the information
reflects financial results with respect to a single fund share. The total
returns in the tables represent the rates that an investor would have earned (or
lost) on an investment in a fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Arthur Andersen LLP, whose
report, along with the funds' financial statements, are included in the funds'
annual report, which is available upon request.

<TABLE>
GROWTH EQUITY FUND1<F96>
(Class B Shares) Year ended November 30,
1998 1997 1996 1995
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $17.17 $15.17 $12.70 $10.00
- ---------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.02 0.19 0.17 0.24
Net gains or losses on securities
(both realized and unrealized) 3.32 2.97 3.12 2.67
Total from investment operations 3.34 3.16 3.29 2.91
Less distributions
Dividends (from net investment income) (0.03) (0.14) (0.16) (0.21)
Distributions (from capital gains) (0.96) (1.02) (0.66) --
Total distributions (0.99) (1.16) (0.82) (0.21)
- ---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $19.52 $17.17 $15.17 $12.70
- ---------------------------------------------------------------------------------------------------------------
Total return2<F97> 20.76% 22.65% 27.34% 29.44%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $66,478 $45,025 $85,311 $48,699
Gross ratio of expenses to average net assets4<F99> 1.54% 1.29% 1.39% 1.40%3<F98>
Net ratio of expenses to average net assets5<F1> 1.34% 1.09% 1.19% 1.17%3<F98>
Gross ratio of net income to average net assets4<F99> (0.08)% 0.66% 1.11% 1.77%3<F98>
Net ratio of net income to average net assets5<F1> 0.12% 0.86% 1.31% 2.00%3<F98>
Portfolio turnover rate 48% 60% 96% 171%

1<F96> The date of initial public investment for class B shares was December 12, 1994.
2<F97> Based on net asset value, which does not reflect the contingent deferred sales charge, if applicable.
3<F98> Annualized.
4<F99> Before waivers and reimbursements.
5<F1> After waivers and reimbursements.

</TABLE>
<TABLE>

GROWTH EQUITY FUND1<F2>
(Class Y Shares) Year ended November 30,
1998 1997
<S> <C> <C>
- ---------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $17.18 $16.46
- ---------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.06 0.03
Net gains or losses on securities
(both realized and unrealized) 3.30 0.73
Total from investment operations 3.36 0.76
Less distributions
Dividends (from net investment income) (0.07) (0.04)
Distributions (from capital gains) (0.96) --
Total distributions (1.03) (0.04)
- ---------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $19.51 $17.18
- ---------------------------------------------------------------------------------------
Total return2<F3> 20.91% 4.59%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $121,475 $109,087
Gross ratio of expenses to average net assets4<F5> 1.29% 1.26%3<F4>
Net ratio of expenses to average net assets5<F6> 1.09% 1.06%3<F4>
Gross ratio of net income to average net assets4<F5> 0.17% 0.48%3<F4>
Net ratio of net income to average net assets5<F6> 0.37% 0.68%3<F4>
Portfolio turnover rate 48% 60%

1<F2> The date of initial public investment for class Y shares was August 18, 1997.
2<F3> Based on net asset value.
3<F4> Annualized.
4<F5> Before waivers and reimbursements.
5<F6> After waivers and reimbursements.

</TABLE>
<TABLE>

RELATIVE VALUE FUND1<F2>
(Class A Shares) Year ended November 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $23.48 $19.03 $15.02 $11.36 $11.80
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.11 0.67 0.27 0.29 0.23
Net gains or losses on securities
(both realized and unrealized) 3.66 4.45 4.01 3.65 (0.40)
Total from investment operations 3.77 5.12 4.28 3.94 (0.17)
Less distributions
Dividends (from net investment income) (0.17) (0.28) (0.26) (0.28) (0.23)
Distributions (from capital gains) (0.82) (0.39) (0.01) -- (0.04)
Total distributions (0.99) (0.67) (0.27) (0.28) (0.27)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $26.26 $23.48 $19.03 $15.02 $11.36
- --------------------------------------------------------------------------------------------------------------------------------
Total return2<F3> 16.67% 27.69% 28.86% 35.10% (1.54)%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $50,925 $37,748 $215,843 $131,979 $74,094
Gross ratio of expenses to average net assets3<F4> 1.49% 1.21% 1.24% 1.26% 1.35%
Net ratio of expenses to average net assets4<F5> 1.29% 1.01% 1.04% 1.06% 1.15%
Gross ratio of net income to average net assets3<F4> 0.50% 1.20% 1.51% 1.97% 1.82%
Net ratio of net income to average net assets4<F5> 0.70% 1.40% 1.71% 2.17% 2.02%
Portfolio turnover rate 26% 18% 16% 24% 30%

1<F2> The date of initial public investment for class A shares was June 5, 1991. For the period from January 31, 1989 (start of
business) to June 4, 1991, all income was distributed to Federated Services Corporation, the administrator at the time.
2<F3> Based on net asset value, which does not reflect the sales charge, if applicable.
3<F4> Before waivers and reimbursements.
4<F5> After waivers and reimbursements.

</TABLE>

RELATIVE VALUE FUND1<F6>
(Class B Shares) Year ended November 30,
1998
- -------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $26.01
- -------------------------------------------------------------------------
Income from investment operations
Net investment income 0.14
Net gains or losses on securities
(both realized and unrealized) 0.24
Total from investment operations 0.38
Less distributions
Dividends (from net investment income) (0.11)
Distributions (from capital gains) --
Total distributions (0.11)
- -------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $26.28
- -------------------------------------------------------------------------
Total return2<F7> 1.50%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $7,847
Gross ratio of expenses to average net assets4<F9> 1.24%3<F8>
Net ratio of expenses to average net assets5<F10> 1.04%3<F8>
Gross ratio of net income to average net assets4<F9> 0.75%3<F8>
Net ratio of net income to average net assets5<F10> 0.95%3<F8>
Portfolio turnover rate 26%

1<F6> The date of initial public investment for class B shares was March 31,
1998.
2<F7> Based on net asset value, which does not reflect contingent deferred
sales charge, if applicable.
3<F8> Annualized.
4<F9> Before waivers and reimbursements.
5<F10> After waivers and reimbursements.

<TABLE>
RELATIVE VALUE FUND1<F11>
(Class Y Shares) Year ended November 30,
1998 1997
<S> <C> <C>
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $23.49 $22.67
- --------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.18 0.08
Net gains or losses on securities
(both realized and unrealized) 3.65 0.81
Total from investment operations 3.83 0.89
Less distributions
Dividends (from net investment income) (0.23) (0.07)
Distributions (from capital gains) (0.82) --
Total distributions (1.05) (0.07)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $26.27 $23.49
- --------------------------------------------------------------------------------
Total return2<F12> 16.95% 3.93%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $386,405 $312,056
Gross ratio of expenses to average net assets4<F14> 1.24% 1.20%3<F13>
Net ratio of expenses to average net assets5<F15> 1.04% 1.00%3<F13>
Gross ratio of net income to average net assets4<F14> 0.75% 1.15%3<F13>
Net ratio of net income to average net assets5<F15> 0.95% 1.35%3<F13>
Portfolio turnover rate 26% 18%

1<F11> The date of initial public investment for class Y shares was August 18, 1997.
2<F12> Based on net asset value.
3<F13> Annualized.
4<F14> Before waivers and reimbursements.
5<F15> After waivers and reimbursements.

</TABLE>

<TABLE>
STELLAR FUND1<F16>
(Class A Shares) Year ended November 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $14.27 $13.59 $12.17 $10.90 $11.34
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.38 0.36 0.34 0.34 0.29
Net gains or losses on securities
(both realized and unrealized) 0.35 1.18 1.62 1.33 (0.41)
Total from investment operations 0.73 1.54 1.96 1.67 (0.12)
Less distributions
Dividends (from net investment income) (0.35) (0.36) (0.34) (0.35) (0.24)
Distributions (from capital gains) (1.30) (0.50) (0.20) (0.05) (0.08
Total distributions (1.65) (0.86) (0.54) (0.40) (0.32)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.35 $14.27 $13.59 $12.17 $10.90
- --------------------------------------------------------------------------------------------------------------------------------
Total return2<F17> 5.74% 11.94% 16.64% 15.67% (1.22)%
Ratios/Supplemental data
Net assets, end of period (000's omitted) $46,613 $50,398 $50,094 $48,902 $50,648
Gross ratio of expenses to average net assets3<F18> 1.85% 1.76% 1.86% 1.85% 1.87%
Net ratio of expenses to average net assets4<F19> 1.65% 1.56% 1.66% 1.65% 1.55%
Gross ratio of net income to average net assets3<F18> 2.51% 2.43% 2.56% 2.78% 2.00%
Net ratio of net income to average net assets4<F19> 2.71% 2.63% 2.76% 2.98% 2.32%
Portfolio turnover rate 77% 64% 65% 104% 79%

1<F16> The date of initial public investment for class A shares was October 18, 1991.
2<F17> Based on net asset value, which does not reflect the sales charge, if applicable.
3<F18> Before waivers and reimbursements.
4<F19> After waivers and reimbursements.

</TABLE>

<TABLE>
STELLAR FUND1<F20>
(Class Y Shares) Year ended November 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $14.27 $13.59 $12.17 $10.90 $11.34
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.42 0.40 0.37 0.38 0.21
Net gains or losses on securities
(both realized and unrealized) 0.36 1.18 1.62 1.32 (0.48)
Total from investment operations 0.78 1.58 1.99 1.70 (0.27)
Less distributions
Dividends (from net investment income) (0.39) (0.40) (0.37) (0.38) (0.17)
Distributions (from capital gains) (1.30) (0.50) (0.20) (0.05) --
Total distributions (1.69) (0.90) (0.57) (0.43) (0.17)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.36 $14.27 $13.59 $12.17 $10.90
- --------------------------------------------------------------------------------------------------------------------------------
Total return2<F21> 6.11% 12.22% 16.94% 15.97% (1.81)%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $58,572 $63,742 $67,047 $64,754 $60,822
Gross ratio of expenses to average net assets4<F23> 1.60% 1.51% 1.59% 1.60% 1.63%3<F22>
Net ratio of expenses to average net assets5<F24> 1.40% 1.31% 1.39% 1.40% 1.43%3<F22>
Gross ratio of net income to average net assets4<F23> 2.76% 2.69% 2.65% 3.03% 3.37%3<F22>
Net ratio of net income to average net assets5<F24> 2.96% 2.89% 2.85% 3.23% 3.57%3<F22>
Portfolio turnover rate 77% 64% 65% 104% 79%

1<F20> The date of initial public investment for class Y shares was April 11, 1994. For the period from April 5, 1994 (start of
business) to April 10, 1994, all income was distributed to the Federated Services Corporation, the administrator at the time.
2<F21> Based on net asset value.
3<F22> Annualized.
4<F23> Before waivers and reimbursements.
5<F24> After waivers and reimbursements.
</TABLE>

<TABLE>

CAPITAL APPRECIATION FUND1<F25>
(Class A Shares) Year ended November 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $14.34 $12.55 $11.82 $10.15 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income (0.05) 0.02 (0.03) 0.03 --
Net gains or losses on securities
(both realized and unrealized) 0.56 1.77 1.05 1.72 0.15
Total from investment operations 0.51 1.79 1.02 1.75 0.15
Less distributions
Dividends (from net investment income) (0.02) -- -- (0.04) --
Distributions (from capital gains) (3.08) -- (0.29) (0.04) --
Returns of Capital -- -- -- (0.00)2<F26> --
Total distributions (3.10) -- (0.29) (0.08) --
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.75 $14.34 $12.55 $11.82 $10.15
- --------------------------------------------------------------------------------------------------------------------------------
Total return3<F27> 4.75% 14.26% 8.95% 17.35% 1.50%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $79,981 $83,118 $79,163 $56,430 $30,013
Gross ratio of expenses to average net assets5<F29> 1.52% 1.49% 1.52% 1.68% 1.88%4<F28>
Net ratio of expenses to average net assets6<F30> 1.32% 1.29% 1.32% 1.47% 1.58%4<F28>
Gross ratio of net income to average net assets5<F29> (0.64)% (0.04)% (0.44)% 0.07% (0.22)%4<F28>
Net ratio of net income to average net assets6<F30> (0.44) 0.16% (0.24)% 0.28% 0.08%4<F28>
Portfolio turnover rate 94% 262% 174% 144% 36%

1<F25> The date of initial public investment for class A shares was June 13, 1994.
2<F26> Distributions are determined in accordance with federal income tax regulations which may differ from generally accepted
accounting principles. These distributions did not represent a return of capital for federal income tax purposes.
3<F27> Based on net asset value, which does not reflect the sales charge, if applicable.
4<F28> Annualized.
5<F29> Before waiver and reimbursements.
6<F30>After waivers and reimbursements.
</TABLE>

INTERNATIONAL EQUITY FUND1<F31>
(Class A Shares) Year ended November 30,
1998
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- --------------------------------------------------------------------------------
Income from investment operations
Net investment income 0.05
Net gains or losses on securities
(both realized and unrealized) 0.34
Total from investment operations 0.39
Less distributions
Dividends (from net investment income) (0.04)
Total distributions (0.04)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.35
- --------------------------------------------------------------------------------
Total return2<F32> 3.95%
Ratios/Supplemental data
Net assets, end of period (000's omitted) $48,459
Gross ratio of expenses to average net assets4<F34> 1.51%3<F33>
Net ratio of expenses to average net assets5<F35> 1.31%3<F33>
Gross ratio of net income to average net assets4<F34> 0.17%3<F33>
Net ratio of net income to average net assets5<F35> 0.37%3<F33>
Portfolio turnover rate 3%

1<F31> The date of initial public investment for class A shares was December 3,
1997.
2<F32> Based on net asset value, which does not reflect the sales charge, if
applicable.
3<F33> Annualized.
4<F34> Before waivers and reimbursements.
5<F35> After waivers and reimbursements.

YEAR 2000 ISSUE

(Firstar Stellar Funds Logo)

FOR MORE INFORMATION
YOU MAY OBTAIN THE FOLLOWING AND OTHER INFORMATION ON THE FIRSTAR STELLAR FUNDS
FREE OF CHARGE:

O ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The annual and semi-annual reports provide the funds' most recent
financial statements and portfolio listings. The annual report contains
a discussion of the market conditions and investment strategies that
affected the funds' performances during the last fiscal year.

O STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED MARCH 31, 1999
The SAI is incorporated into this prospectus by reference (i.e., legally
made a part of this prospectus). The SAI provides more details about the
funds' policies and management.

TO RECEIVE ANY OF THESE DOCUMENTS OR PROSPECTUSES ON THE FIRSTAR STELLAR FUNDS:

BY TELEPHONE
1-800-677-FUND

BY MAIL:
Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

ON THE INTERNET:
Text only versions of fund documents can be viewed online or downloaded from:
http://www.sec.gov and http://www.firstarstellarfunds.com

You may review and obtain copies of fund information (including the SAI) at the
SEC Public Reference Room in Washington, D.C. Please call 1-800-SEC-0330 for
information relating to the operation of the Public Reference Room. Copies of
the information may be obtained for a fee by writing the Public Reference
Section, Securities and Exchange Commission, Washington, D.C. 20549-6009.

Investment Company Act File # 811-05762

For Investor Services or to Request Information
1-800-677-FUND
1-414-287-3808

Firstar Stellar Funds
615 East Michigan Street
P.O. Box 701
Milwaukee, WI 53201-0701

www.firstarstellarfunds.com

FIRSTAR STELLAR FUNDS (LOGO)
SFSP-99

TREASURY
FUND

PROSPECTUS

MARCH 31, 1999

TABLE OF CONTENTS

THE FUND
Overview of the Fund........................................3
TREASURY Fund...............................................4

Management of the Fund......................................6
Distribution of Shares......................................6

YOUR ACCOUNT INFORMATION
Description of Classes......................................7
Price of Shares.............................................8
Purchasing Shares...........................................8
Selling Shares.............................................10
Dividends, Capital Gain Distributions and Taxes............11

ADDITIONAL INFORMATION
Financial Highlights.......................................12
Year 2000 Issue............................................13

FOR MORE INFORMATION
The last page tells you how to obtain more information about the fund.

OVERVIEW

GOAL OF THE TREASURY FUND

The goal of the Treasury Fund is to provide current income while preserving
capital.

STRATEGY OF THE FUND

The TREASURY FUND invests exclusively in short-term U.S. Treasury obligations.
The fund strives to maintain a share price of $1.00.

Principal Risks of this Fund

The main risks of investing in the fund are:

O INTEREST RISKS: The rate of income will vary from day to day depending on
shortterm interest rates. It is possible that a major change in interest
rates could cause the value of your investment to decline.

O CREDIT RISKS: The fund can also be affected by changes in the credit
quality rating or changes in the issuer's financial condition. A default
on a security or a repurchase agreement held by the fund could cause the
value of your investment to decline.

Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.

AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF FIRSTAR BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.

WHO MAY WANT TO INVEST

The fund may be appropriate for people who:

O want to save money rather than "invest"
O require stability of principal
O prefer to receive income with relatively fewer risks

TREASURY FUND

INVESTMENT GOAL

The TREASURY FUND seeks to achieve stability of principal and current income
consistent with stability of principal.

INVESTMENT POLICIES AND PORTFOLIO SECURITIES

The fund intends to achieve its investment goal by investing exclusively in
shortterm U.S. Treasury obligations that have a maturity of 397 days or less
from the date of purchase. The fund may purchase repurchase agreements
collateralized by U.S. Treasury obligations. The fund intends to invest in the
agreements that provide for repurchase within 397 days from the date of
acquisition. The average maturity of these securities is 120 days or less. The
average maturity, however, of all the securities in the fund's portfolio will be
90 days or less on a dollar-weighted basis. Securities subject to repurchase
agreements are marked to market on a daily basis. U.S. Treasury obligations are
issued by the U.S. government and are fully guaranteed as to principal and
interest by the United States government. The fund may also retain assets in
cash and may purchase U.S. Treasury obligations on a when-issued or delayed
delivery basis.

INVESTMENT RISKS

The following risks are specific to this fund in addition to the risks mentioned
in the Overview section.

REPURCHASE AGREEMENTS

Arrangements in which banks, broker/dealers and other financial institutions
sell securities to the fund and agree to repurchase them at a certain time and
price within one year.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS RISKS One of the risks of
investing in whenissued or delayed delivery transactions is if the seller
chooses not to complete the transaction, the fund could miss an advantageous
price or yield.

WHEN ISSUED/DELAYED DELIVERY

Securities with payment and delivery scheduled for a future time.

The Statement of Additional Information contains more information about the fund
and the types of securities in which it may invest.

PAST PERFORMANCE

The bar chart and table below illustrate the variability of the TREASURY FUND'S
returns. The bar chart indicates the risks of investing in the fund by showing
the changes in the fund's performance from year to year (on a calendar year
basis). The table shows the fund's average annual returns for oneyear, fiveyear
and since the fund's inception ended December 31, 1998. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.

TREASURY FUND - C SHARES
CALENDAR YEAR RETURNS AS OF 12/31
1990 7.64%
1991 5.49%
1992 3.26%
1993 2.54%
1994 3.51%
1995 5.26%
1996 4.77%
1997 4.86%
1998 4.61%

BEST QUARTER: Q3 1989 2.08%
WORST QUARTER: Q4 1993 0.62%

Average annual total return
through 12/31/98 1 Year 5 Year Since inception
- -----------------------------------------------------------------------------
Treasury Fund C Shares1<F50> 4.61% 4.60% 4.93%

For uptodate yield information, please call 1-80-0677-FUND.

1<F50> C Shares commenced operations April 15, 1989.

FUND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS C
- -----------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(as a percentage of offering price) None
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(as a percentage of offering price) None
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS None
REDEMPTION FEE None
EXCHANGE FEE None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CLASS C
- -----------------------------------------------------------------------------
MANAGEMENT FEES 0.50%
DISTRIBUTION AND SERVICE (12B-1) FEES1<F51> 0.25%
OTHER EXPENSES2<F52> 0.43%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.18%

1<F51> C shares of the TREASURY FUND can pay up to 0.25% of average daily net
assets for 12b1 fees. However, the investment adviser has chosen to waive
a portion of this fee so that the actual amount imposed is 0.15% of
average daily net assets. The adviser can reduce the waiver at any
time.
2<F52> "Other Expenses" includes (1) administration fees, transfer agency fees
and all other ordinary operating expenses of the fund not listed above,
plus (2) an annual shareholder servicing fee of 0.25% of average daily
net assets. For the foreseeable future, the fund plans to limit the
shareholder servicing fee to an annual rate of 0.10% of average daily net
assets.

EXAMPLE The example below is intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual fund's.
This example assumes that:

1.You invest $10,000 in the fund for the time periods indicated and then redeem
all of your shares at the end of those periods,

2.Your investment has a 5% return each year, and

3.The fund operating expenses remain the same.

Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------
CLASS C $120 $375 $649 $1,432
Class descriptions are on page ___.

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

The investment adviser for the fund is Firstar Bank, N.A. The adviser is
located at 425 Walnut Street, Cincinnati, Ohio 45202. The investment decisions
made by Firstar Bank are subject to direction of the fund's board of trustees.
(The Statement of Additional Information contains more information regarding the
board of trustees.) The adviser conducts investment research and supervision
for the fund and is responsible for the purchase and sale of securities for the
fund's portfolio. The adviser charges an annual fee for its services of 0.50%
of average daily net assets.

FUND ADMINISTRATION, FUND ACCOUNTING, DIVIDEND DISBURSEMENT, AND CUSTODY
SERVICES

Firstar Mutual Fund Services, LLC, an affiliate of the fund's investment
adviser, provides administrative, accounting and dividend disbursement services
to the fund and is located in Milwaukee, Wisconsin. Firstar Bank, N.A., the
fund's investment adviser, also serves as custodian for the fund.

DISTRIBUTION OF SHARES

DISTRIBUTOR

Edgewood Services, Inc. is the distributor for shares of the fund. It is based
in Pittsburgh, Pennsylvania and is the distributor for a number of investment
companies around the country.

RULE 12B-1 PLAN

The fund has adopted a Rule 12b-1 Plan under the Investment Company Act of 1940.
Under the 12b-1 Plan, class C shares may pay up to an annual rate of 0.25% of
the average daily net asset value of shares to Edgewood. Edgewood uses this fee
to finance activities that promote the sale of the fund's shares. Such
activities include, but are not necessarily limited to, advertising, printing
and mailing prospectuses to persons other than current shareholders, printing
and mailing sales literature, and compensating underwriters, dealers and sales
personnel.

Whenever Edgewood deems it appropriate, Edgewood may, from time to time,
voluntarily reduce its compensation under the Rule 12b1 Plan to the extent
expenses of the shares exceed a certain limit. Rule 12b1 fees are paid out of
fund assets on an ongoing basis. Over time, these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.

Edgewood may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers and broker/dealers as agents to
provide sales or administrative services for their clients or customers who
beneficially own shares of the fund. Financial institutions will receive fees
from the distributor based upon shares owned by their clients or customers.
Edgewood will determine the schedule of such fees and the basis upon which such
fees will be paid.

DESCRIPTION OF CLASSES

CLASS C SHARES

Class C shares are regular retail shares and may be purchased by individuals or
IRAs. With class C shares, you pay no sales charge when you invest. In
addition, an annual Rule 12b1 fee (as discussed previously) is assessed against
the shares of the fund.

CLASS Y SHARES

The fund also offers another class of shares (class Y shares). Class Y shares
are sold at net asset value primarily to financial institutions acting in a
fiduciary capacity and are subject to a minimum initial investment of $1,000.
Both classes are subject to the same expenses, however class Y shares are not
distributed under a Rule 12b-1 Plan and therefore are not subject to those fees.
Expense differences between classes may affect the performance of each
class.

To obtain more information and a prospectus of class Y shares, please call 1-
800-677-FUND.

PRICE OF SHARES

NAV =
Assets - Liabilities
--------------------
# outstanding shares

WHAT SHARES COST

Shares of the fund are sold at their net asset value (NAV) next determined after
an order is received. The fund attempts to stabilize the net asset value of
their shares at $1.00 by valuing the portfolio securities using the amortized
cost method. The net asset value is calculated by subtracting the total
liabilities of the fund from the fund's total assets. The difference is divided
by the number of fund shares outstanding. The fund cannot guarantee that their
net asset value will always remain at $1.00 per share. There is no sale charges
imposed by the fund.

The net asset value for the fund is determined on the days the New York Stock
Exchange is open, Monday through Friday, except on:

o New Year's Day o Good Friday o Labor Day
o Martin Luther King Jr.'s Day o Memorial Day o Thanksgiving Day
o Presidents' Day o Independence Day o Christmas Day

The net asset value for the fund is determined as of 2:00 p.m. (Eastern time).

PURCHASING SHARES

OPENING AN ACCOUNT

To open an account, contact your financial institution (such as your bank or
broker/dealer). Through your financial institution, you can open an account by
check or federal funds wire. Your financial institution should have an
agreement with the Distributor. The minimum initial investment amount is
$1,000. Additional investments may be made in any amount. Please note, your
financial institution will be the record owners of the shares.

TIMING OF REQUESTS

The price per share will be the net asset value next computed after the time
your request is received in good order and accepted by the fund or by the fund's
authorized agent. All requests (telephone orders and federal funds wire)
received in good order by the fund by 2:00p.m. (Eastern time), will be executed
on the same day. Requests received after 2:00 p.m. (Eastern time) will be
executed the next business day.

RECEIPT OF ORDERS

Shares may only be purchased on days the New York Stock Exchange and the Federal
Reserve wire system are open for business. Your order will be considered
received after your purchase is converted into federal funds and received by
Firstar Bank.

METHOD OF BUYING

You may purchase shares through a financial institution. Contact your bank or
broker/dealer to open an account. Note: The financial institution is
responsible for promptly transmitting your orders. The financial institution
may charge you additional fees for its services. You may contact your financial
institution to add to your account.

SELLING SHARES

METHOD OF SELLING

To sell some or all of your shares you will have to contact your financial
institution. Your proceeds will be sent to you or your financial institution
by check or wire. Note: Financial institutions are responsible for promptly
submitting your requests in good order. They may charge you fees and
commissions.

TIMING OF REQUESTS

All requests received in good order by Firstar Bank before 2:00p.m. (Eastern
time) will be executed on the same day. Requests received after 2:00 p.m.
(Eastern time) will be executed the next business day.

WHEN REDEMPTION PROCEEDS ARE MAILED

If your redemption request is in good order, the fund will normally send your
redemption proceeds to you on the next business day and no later than 7 calendar
days after receipt of your proper redemption request.

If you purchase shares using a check and soon after request a redemption, the
fund will honor the redemption request, but will not mail the proceeds until
your purchase check has cleared (usually within 12 days).

DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES

DIVIDENDS

The fund declares dividends on a daily basis and pays them to you on a monthly
basis. Unless you provide a written request to the financial institution to
receive payments in cash, your dividends will automatically be reinvested in
additional shares of the fund. Dividends paid in cash will be mailed to you via
the U.S. Postal Service. Keep in mind that undeliverable checks or checks not
deposited within six months will be reinvested in additional shares of the fund
at the then current net asset value. Dividends are earned on the day shares of
the fund are purchased. Dividends paid in cash or in additional shares are
treated the same for tax purposes.

CAPITAL GAINS

If the fund realizes capital gains, you could earn more dividends. Capital
losses could result in a decrease in dividends for you. If the fund realizes
net longterm capital gains (not very common), the fund would distribute them
every 12 months.

TAX INFORMATION

The fund will pay no federal income tax because they expect to meet certain
Internal Revenue Code requirements. The fund will be treated as single,
separate entity for federal income tax purposes. The fund expects its
distributions to consist primarily of ordinary income. The fund will provide
you with detailed tax information for reporting purposes.

You should consult your own tax adviser regarding tax consequences under your
state and local laws.

If you are a shareholder of the fund, unless you are exempt from having to pay
federal income taxes, you are required to pay federal income taxes on any
dividends and other distributions (including capital gains distributions) you
receive.

FINANCIAL HIGHLIGHTS

The financial highlights table set forth below is intended to help you
understand the fund's financial performance for the past 5 years. Most of
the information reflects financial results with respect to a single fund share.
The total returns in the table represent the rates that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions). This information has been audited by Arthur
Andersen LLP, whose report, along with the fund's financial statements, are
included in the fund's annual report, which is available upon request.

<TABLE>
TREASURY FUND1<F53>
(Class C) Year ended November 30,
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $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
Net gains or losses on securities
(both realized and unrealized) 0.00 0.00 0.00 0.00 0.00
Less distributions
Dividends (from net investment income) (0.05) (0.05) (0.05) (0.05) (0.03)
Distributions (from capital gains) 0.00 0.00 0.00 0.00 0.00
Total distributions (0.05) (0.05) (0.05) (0.05) (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------------
Total return3<F54> 4.69% 4.85% 4.80% 5.23% 3.30%
Ratios/Supplemental data
Net assets, end of period
(000's omitted) $542,430 $469,400 $829,259 $654,963 $358,766
Gross ratio of expenses to average net assets3<F55> 1.08% 0.93% 0.90% 0.91% 0.90%
Net ratio of expenses to average net assets4<F56> 0.88% 0.73% 0.70% 0.71% 0.70%
Gross ratio of net income to average net assets3<F55> 4.38% 4.53% 4.49% 4.94% 3.04%
Net ratio of net income to average net assets4<F56> 4.58% 4.73% 4.69% 5.14% 3.24%

1<F53> The Treasury Fund has been operating since April 15, 1989.
2<F54> Based on net asset value.
3<F55> Before waivers and reimbursements.
4<F56> After waivers and reimbursements.
</TABLE>

YEAR 2000 ISSUE

Like all financial service providers, the fund's investment adviser, the
distributor and other third party service providers utilize systems that may be
affected by year 2000 transition issues and other date related issues. The
services provided to you and the fund by these service providers depend on the
smooth functioning of their computer systems and those of other parties they
deal with. Many computer software systems in use today cannot distinguish the
year 2000 from the year 1900 because of the way dates are encoded and
calculated. Such an event could have a negative impact on handling securities
trades, payments of interest and dividends, pricing and account services.
Although there can be no assurance at this time that there will be no adverse
impact on the fund, the fund's service providers have advised the fund that they
have been actively working on necessary changes to their computer systems to
prepare for the year 2000. The fund's service providers expect that their
systems, and those of other parties they deal with, will be adapted in time for
that event. However, there can be no assurance that the computer systems of the
companies in which the fund invests will be timely converted or that the value
of such investments will not be adversely affected by the year 2000 issue.

FOR MORE INFORMATION

YOU MAY OBTAIN THE FOLLOWING AND OTHER INFORMATION ON THE FUND FREE OF CHARGE:

o ANNUAL AND SEMIANNUAL REPORTS TO SHAREHOLDERS
The annual and semi-annual reports provide the fund's most recent financial
reports and portfolio listings. The annual report contains a discussion of
the market conditions and investment strategies that affected the fund's
performances during the last fiscal year.

o STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED MARCH 31, 1999
The SAI is incorporated into this prospectus by reference (i.e., legally made
a part of this prospectus). The SAI provides more details about the fund's
policies and management.

TO RECEIVE ANY OF THESE DOCUMENTS FOR THE FUND:

BY TELEPHONE
1-800-677-FUND

BY MAIL:
Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

ON THE INTERNET:
Text only versions of fund documents can be viewed online or downloaded from:
http://www.sec.gov and http://www.firstarstellarfunds.com

You may review and obtain copies of fund information (including the SAI) at the
SEC Public Reference Room in Washington, D.C. Please call 1-800-SEC-0330 for
information relating to the operation of the Public Reference Room. Copies of
the information may be obtained for a fee by writing the Public Reference
Section, Securities and Exchange Commission, Washington, D.C. 20549-6009.

Investment Company Act File # 811-05762

FIRSTAR STELLAR FUNDS

STATEMENT OF ADDITIONAL INFORMATION

March 31, 1999

MONEY MARKET FUNDS
Firstar Stellar Treasury Fund
Firstar Stellar Tax-Free Money Market Fund
Firstar Stellar Ohio Tax-Free Money Market Fund

BOND FUNDS
Firstar Stellar Strategic Income Fund
Firstar Stellar U.S. Government Income Fund
Firstar Stellar Insured Tax-Free Bond Fund

STOCK FUNDS
Firstar Stellar Growth Equity Fund
Firstar Stellar Relative Value Fund
Firstar Stellar Fund
Firstar Stellar Capital Appreciation Fund
Firstar Stellar International Equity Fund

This Statement of Additional Information is not a prospectus
and should be read together with the prospectuses of the Money
Market Funds, Stock Funds and Bond Funds of the Firstar Stellar
Funds dated March 31, 1999. To receive a copy of the
prospectuses, write to Firstar Stellar Funds or call 1-800-677-
FUND.

The Funds' audited financial statements for the fiscal year
ended November 30, 1998 are incorporated by reference to the
Funds' 1998 Annual Reports.

FIRSTAR STELLAR FUNDS
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WISCONSIN 53201-0701

TABLE OF CONTENTS
GENERAL INFORMATION ABOUT FIRSTAR STELLAR FUNDS................3
CAPITAL STOCK..................................................3
DESCRIPTION OF THE FUNDS.......................................4
THE FUNDS' INVESTMENTS AND RISKS...............................5
MORE INFORMATION ABOUT THE OHIO TAX-FREE MONEY
MARKET FUND AND INVESTMENT RISKS..............................27
MORE INFORMATION ABOUT THE INTERNATIONAL EQUITY FUND
AND INVESTMENT RISKS..........................................28
THE FUNDS' INVESTMENT LIMITATIONS.............................37
TEMPORARY INVESTMENTS.........................................43
PORTFOLIO TURNOVER RATES......................................44
MANAGEMENT OF THE FUND........................................44
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...........47
INVESTMENT ADVISORY SERVICES..................................48
BROKERAGE TRANSACTIONS........................................49
ADMINISTRATIVE SERVICES.......................................50
FUND ACCOUNTING AND DIVIDEND PAYING AGENT SERVICES............51
CUSTODIAN.....................................................51
DISTRIBUTION PLAN.............................................51
DETERMINING NET ASSET VALUE...................................52
PURCHASE, EXCHANGE AND PRICING OF SHARES......................53
TAX STATUS....................................................57
UNDERWRITERS..................................................59
CALCULATION OF PERFORMANCE DATA...............................60
PERFORMANCE COMPARISONS.......................................66
INDEPENDENT PUBLIC ACCOUNTANTS................................68
FINANCIAL STATEMENTS..........................................68
APPENDIX......................................................69

FIRSTAR STELLAR FUNDS

GENERAL INFORMATION ABOUT FIRSTAR STELLAR FUNDS

Firstar Stellar Funds (the "Trust") is a Massachusetts business trust
established under a Declaration of Trust dated January 23, 1989. The Trust
consists of a series of mutual funds, which are all open-ended management
investment company. The Trust was organized under the name "Value Plus Funds,"
but was changed on March 29, 1989 to "Losantiville Funds." On May 1, 1993, the
name of the Trust was changed again to "Star Funds." On November 20, 1998, Star
Banc Corporation, the parent company of Star Bank, N.A., merged with Firstar
Corporation. Star Bank, N.A. is the investment adviser of the Trust. After the
merger, Star Bank changed its name to Firstar Bank, N.A. On February 11, 1999,
the Board of Trustees of the Trust (the "Trustees") approved changing the
Trust's name to "Firstar Stellar Funds" effective March 1, 1999.

CAPITAL STOCK

TITLE AND DESCRIPTION OF SHARE CLASSES

The Declaration of Trust permits the Trust to offer separate series of shares of
beneficial interest representing interests in separate portfolios of securities.
The Trust currently consists of 11 individual fund portfolios. Under the
Declaration of Trust and a Multiple Class Plan developed pursuant to Rule 18f-3
under the 1940 Act, each fund is permitted to offer several classes of shares as
follows: Class A, Class B, Class C and Class Y. Class A shares are subject to a
front-end sales load as described in the prospectus and a Rule 12b-1 fee.
Class B shares are subject to a contingent deferred sales load as described in
the prospectus and a Rule 12b-1 fee. Class C shares are not subject to a sales
load, but are subject to a Rule 12b-1 fee. Class Y shares are not subject to a
sales load or a Rule 12b-1 fee. The table below lists the funds together with
their share classes. Please note that throughout this Statement of Additional
Information ("SAI"), the individual fund series will be referred to by their
short name (i.e., without the "Firstar Stellar" preface).
- -----------------------------------
Money Market Funds
- -----------------------------------
Treasury Fund - C, Y
Tax-Free Money Market Fund - C
Ohio Tax-Free Money Market Fund - C

- -----------------------------------
Bond Funds
- -----------------------------------
Insured Tax-Free Bond Fund - A
U.S. Government Income Fund - A, B
Strategic Income Fund - B

- -----------------------------------
Stock Funds
- -----------------------------------
Growth Equity Fund - B, Y
Relative Value Fund - A, B, Y
The Stellar Fund - A, Y
Capital Appreciation Fund - A
International Equity Fund - A

Classes A, B and C shares are sold primarily to individuals who purchase shares
through Firstar Bank, N.A. Class Y shares are offered to trusts, fiduciaries
and other institutions through Firstar Bank, N.A. The expenses incurred
pursuant to the Rule 12b-1 Plan will be borne solely by Classes A, B and C
shares of the applicable funds and constitute the only expenses allocated to one
class and not the other.

RIGHTS OF EACH SHARE CLASS

Each share of the common stock of a fund is entitled one vote in electing
Trustees and other matters that may be submitted to shareholders for a vote.
All shares of all classes of each fund in the Trust have equal voting rights.
However, matters affecting only one particular fund or class, can be voted on
only by shareholders in that fund or class. Only shareholders of Class A, B or
C shares will be entitled to vote on matters submitted to a shareholder vote
with respect to the Rule 12b-1 Plan applicable to such class. All shareholders
are entitled to receive dividends when and as declared by the Trustees from time
to time and as further discussed in the Prospectuses.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable under
the law of Massachusetts 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 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 its
property 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.

DESCRIPTION OF THE FUNDS

The investment objectives listed below are fundamental objectives and therefore
cannot be changed without the approval of shareholders.

MONEY MARKET FUNDS
- -------------------

The TREASURY FUND, TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET
FUND may follow non-fundamental operational policies that are more restrictive
than fundamental investment limitations, as set forth in this SAI in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940 ("1940 Act"). In
particular, the funds will comply with the various requirements of Rule 2a-7,
which regulates money market mutual funds. The funds will also determine the
effective maturity of their investments, as well as their ability to consider a
security as having received the requisite short-term ratings by a nationally
recognized rating organization (NRSRO) 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.

The overall objective of the money market funds is to provide current income
while preserving capital. The TREASURY FUND is a diversified fund and seeks
current income consistent with maintaining stable principal. The TAX-FREE MONEY
MARKET FUND is a diversified fund and seeks current income exempt from federal
regular income tax consistent with maintaining stable principal. The OHIO
TAX-FREE MONEY MARKET FUND is a non-diversified fund and seeks current income
exempt from federal regular income tax and Ohio state personal income taxes
consistent with maintaining stable principal. Specific information regarding
the state of Ohio with respect to the OHIO TAX-FREE MONEY MARKET FUND and its
non-diversified status is located on page 27.

BOND FUNDS
- ----------

The general goal of the bond funds is to provide current income by investing in
choice fixed-income securities. The STRATEGIC INCOME FUND is a diversified fund
and its investment objective is to generate high current income. The U.S.
GOVERNMENT INCOME FUND is a diversified fund that seeks to provide current
income. The INSURED TAX-FREE BOND FUND is a diversified fund that seeks to
provide current income exempt from federal income tax by primarily purchasing
insured municipal bonds. The fund's secondary objective is to achieve capital
appreciation.

STOCK FUNDS
- -----------

The overall objective of the stock funds is to maximize capital appreciation by
investing in choice equity securities. The GROWTH EQUITY FUND and CAPITAL
APPRECIATION FUND are both diversified funds that seek to maximize capital
appreciation. The RELATIVE VALUE FUND is a diversified fund and its goal is to
obtain the highest total return from income and capital appreciation. The
STELLAR FUND is a diversified fund that seeks to maximize total returns that are
derived from a combination of dividend income and capital appreciation. The
INTERNATIONAL EQUITY FUND is a diversified fund and its investment objective is
to achieve long-term capital appreciation. Specific information regarding
international investments in the INTERNATIONAL EQUITY FUND is provided on page
28.

THE FUNDS' INVESTMENTS AND RISKS

The respective prospectuses describe the principal strategies and risks of each
of the Funds. This section provides additional information regarding
investments and transactions the Funds are permitted to make.

REPURCHASE AGREEMENTS

Each fund (or underlying fund) may invest in repurchase agreements which are
arrangements with banks, broker/dealers, and other recognized financial
institutions to sell securities to the fund and agree to repurchase them at a
mutually agreed upon time and price within one year from date of acquisition.
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, a fund could receive less than the repurchase price
on any sale of such securities. In the event that such a defaulting seller
filed for bankruptcy or became insolvent, disposition of such securities by a
fund might be delayed pending court action. The Funds believe that under the
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 Funds' adviser to be creditworthy
pursuant to guidelines established by the Board of Trustees.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

Each fund (or underlying fund) may purchase short-term obligations on a
when-issued or delayed delivery basis. These transactions are arrangements
in which a fund purchases securities with payment and delivery scheduled for
a future time. The seller's failure to complete these transactions may cause
a fund to miss a price or yield considered 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.

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

These transactions are made to secure what is considered to be an
advantageous price or yield for the Funds. 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 is settled. The Funds
do not intend to engage in when-issued and delayed delivery transactions to
an extent that would cause the segregation of more than 20% of the total
value of their respective assets.

RESTRICTED AND ILLIQUID SECURITIES

All of the Funds may invest in a limited amount of restricted securities.
Restricted securities are securities that are thinly traded or whose resale
is restricted by federal securities laws. Restricted securities are any
securities in which the Funds may invest pursuant to their investment
objective and policies but which are subject to restrictions on resale under
federal securities laws. The Funds' Board of Trustees has established
criteria that allows the adviser to consider certain restricted securities as
liquid.

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND,
RELATIVE VALUE FUND, STELLAR FUND, CAPITAL APPRECIATION FUND and
INTERNATIONAL EQUITY FUND (via underlying funds) 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 funds, 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 funds 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 Trustees may 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.

OTHER INVESTMENT COMPANIES

As an efficient means of carrying out their investment policies, each fund
may invest in the securities of other investment companies. In addition, the
CAPITAL APPRECIATION FUND may purchase shares of closed-end investment
companies that invest in securities that approximate the composition of a
stock index. A disadvantage to investing in other investment companies is
that they also carry certain expenses such as management fees. As a result,
any investment by a fund in shares of other investment companies may
duplicate shareholder expenses.

U.S. GOVERNMENT OBLIGATIONS

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE BOND
FUND, GROWTH EQUITY FUND, RELATIVE VALUE FUND, STELLAR FUND and CAPITAL
APPRECIATION FUND may invest in U.S. government obligations. The types of
U.S. government obligations in which these funds 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 the U.S. government, its
agencies or instrumentalities. These securities are backed by the:

o full faith and credit of the U.S. Treasury;
o issuer's right to borrow from the U.S. Treasury;
o discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
o credit of the agency or instrumentality issuing the obligations.

Examples of agencies and instrumentalities that may not always receive
financial support from the U.S. government are:

o Federal Home Loan Banks;
o Federal National Mortgage Association;
o Student Loan Marketing Association; and
o Federal Home Loan Mortgage Corporation.

PRECIOUS METALS

The STELLAR FUND may invest in precious metals as described in the
prospectus. Precious metal securities of foreign issuers will not be
aggregated with other international securities for purposes of calculating
the fund's investments in international securities under the fund's
investment allocation policy.

SHORT SELLING

The STRATEGIC INCOME FUND and INTERNATIONAL EQUITY FUND (via underlying
funds) may make short sales. Short sales are transactions where funds sell
securities they don't own in anticipation of a decline in the market value of
the securities. A fund must borrow the security to deliver it to the buyer.
The fund is then obligated to replace the security borrowed at the market
price at the time of replacement. Until the security is replaced, the fund
is required to pay the lender any dividends or interest which accrue on the
security during the loan period. To borrow the security, the fund also may
be required to pay a premium, which would increase the cost of the security
sold. To the extent necessary to meet margin requirements, the broker will
retain proceeds of the short sale until the short position is closed out.

Until the fund replaces a borrowed security in connection with a short sale,
the fund will be required to maintain daily a segregated account, containing
cash or U.S. government securities, at such a level that:

O the amount deposited in the account plus the amount deposited with
the broker as collateral will at all times equal at least 100% of
the current value of the security sold short and
O the amount deposited in the segregated account plus the amount
deposited with the broker as collateral will not be less than the
market value of the security at the time it was sold short.

The funds may purchase call options to provide a hedge against an increase in
the price of a security sold short by the funds. When a fund purchases call
options, it has to pay a premium to the person writing the option and a
commission to the broker selling the options. If the options are exercised
by the fund, the premium and the commission paid may be more than the amount
of the brokerage commission charged if the securities were to be purchased
directly.

As for the STRATEGIC INCOME FUND, the adviser anticipates that the frequency
of short sales will vary substantially under different market conditions, and
it does not intend that any specified portion of its assets, as a matter of
practice, will be in short sales. However, as an operating policy which may
be changed without shareholder approval, no securities will be sold short if,
after effect is given to any such short sale, the total market value of all
securities sold short would exceed 25% of the value of the fund's net assets.
The fund may not sell short the securities of any single issuer listed on a
national securities exchange to the extent of more than 2% of the value of
the fund's net assets. The fund may not sell short the securities of any
class of an issuer to the extent, at the time of the transaction, of more
than 2% of the outstanding securities of that class.

In addition to the short sales discussed above, the funds may also make short
sales "against the box," a transaction in which a fund enters into a short
sale of a security that the fund owns. A broker holds the proceeds of the
short sale until the settlement date, at which time the fund delivers the
security to close the short position. The fund receives the net proceeds
from the short sale. The STRATEGIC INCOME FUND at no time will have more
than 15% of the value of its net assets in deposits on short sales against
the box.

A fund will incur losses as a result of a short sale if the price of the
security increases between the date of the short sale and the date on which
the fund replaces the borrowed security. Conversely, the fund will realize a
gain if the security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a long position
in a security. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or amounts in lieu of
interest the fund may be required to pay in connection with a short sale.

WARRANTS

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND, CAPITAL APPRECIATION FUND and
INTERNATIONAL EQUITY FUND (via underlying funds) 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. Warrants acquired in units or attached
to securities may be deemed to be without value for purposes of this policy.

CONVERTIBLE SECURITIES

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND, RELATIVE VALUE FUND, STELLAR
FUND and CAPITAL APPRECIATION FUND may invest in convertible securities.
Convertible securities are fixed-income securities that may be exchanged or
converted into a predetermined number of shares of the issuer's underlying
common stock. These shares are converted 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.

Convertible bonds and convertible preferred stocks are fixed income
securities that 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 of appropriate rating or comparable quality (as described in
the prospectuses) 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. In the case of
liquidation, convertible securities are senior to equity securities and,
therefore, have a claim to assets of the corporation prior to the common
stockholders. However, convertible securities are generally subordinated to
similar non-convertible 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.

A 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 their investment objectives.
Otherwise, the fund will hold or trade the convertible securities. In
selecting convertible securities for the funds, 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 determinants of the
issuer's profits, and the issuer's management capability and practices.

ZERO-COUPON SECURITIES

The U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE BOND FUND, GROWTH EQUITY
FUND, STELLAR FUND and CAPITAL APPRECIATION FUND may invest in zero-coupon
securities. These funds may invest in zero coupon bonds in order to receive
the rate of return through the appreciation of the bond. This application is
extremely attractive in a falling rate environment as the price of the bond
rises rapidly in value as opposed to regular coupon bonds. A zero coupon
bond makes no periodic interest payments and the entire obligation becomes
due only upon maturity.

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 increases 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
put features that provide the holder with the opportunity to sell the bonds
back to the issuer at a stated price before maturity.

Generally, the price of zero-coupon securities is more sensitive to
fluctuations in interest than are conventional bonds and convertible
securities. In addition, federal tax law requires the holder of a
zero-coupon security to recognize income from the security prior to the
receipt of cash payments. To maintain their qualification as regulated
investment companies and to avoid liability of federal income taxes, the
funds will be required to distribute income accrued from zero-coupon
securities which they own, and may have to sell portfolio securities (perhaps
at disadvantageous times) in order to generate cash to satisfy these
distribution requirements.

Zero-coupon securities usually trade at a deep discount from their face or
par value and are subject to greater market value fluctuations from changing
interest rates than debt obligations of comparable maturities which make
current distributions of interest. As a result, the net asset value of
shares of the fund may fluctuate over a greater range than shares of other
mutual funds investing in securities making current distributions of interest
and having similar maturities.

Zero-coupon securities may include U.S. Treasury bills issued directly by the
U.S. Treasury or other short-term debt obligations, and longer-term bonds or
notes and their unmatured interest coupons which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A number of
securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and have
resold them in custodial receipt programs with a number of different names,
including Treasury Income Growth Receipts ("TIGRS") and Certificates of
Accrual on Treasuries ("CATS"). The underlying U.S. Treasury bonds and notes
themselves are held in book-entry form at the Federal Reserve Bank or, in the
case of bearer securities (i.e., unregistered securities which are owned
ostensibly by the bearer of holder thereof), in trust on behalf of the owners
thereof.

In addition, the Treasury has facilitated transfers of ownership of zero-
coupon securities by accounting separately for the beneficial ownership of
particular interest coupons and corpus payments on Treasury securities
through the Federal Reserve book-entry record-keeping system. The Federal
Reserve program as established by the Treasury Department is known as
"STRIPS" or "Separate Trading of Registered Interest and Principal of
Securities." Under the STRIPS program, a fund will be able to have its
beneficial ownership of U.S. Treasury zero-coupon securities recorded
directly in the book-entry record-keeping system in lieu of having to hold
certificates or other evidence of ownership of the underlying U.S. Treasury
securities.

When the holder has stripped debt obligations of their unmatured interest
coupons, the stripped coupons are sold separately. The principal or corpus
is sold at a deep discount because the buyer receives only the right to
receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.

REAL ESTATE INVESTMENT TRUSTS

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND and STELLAR FUND may invest in
equity or mortgage real estate investment trusts (REITs) that together
produce income. A real estate investment trust is a managed portfolio of
real estate investments. Regarding the funds' asset allocation policy, real
estate of domestic issuers will not be considered domestic equity securities.
REITs will be diversified by geographic location and by sector (such as
shopping malls, apartment building complexes and health care facilities). An
equity REIT holds equity positions in real estate and provides its
shareholders with income from the leasing of its properties and capital gains
from any sales of properties. A mortgage REIT specializes in lending money
to developers of properties and passes any interest income earned to its
shareholders.

Risks associated with real estate investments include the fact that equity
and mortgage real estate investment trusts are dependent upon management
skill and are not diversified, and are, therefore, subject to the risk of
financing single projects or unlimited number of projects. They are also
subject to heavy cash flow dependency, defaults by borrowers, and self-
liquidation. Additionally, equity real estate investment trusts may be
affected by any changes in the value of the underlying property owned by the
trusts, and mortgage real estate investment trusts may be affected by the
quality of any credit extended. The investment adviser seeks to mitigate
these risks by selecting real estate investment trusts diversified by sector
(shopping malls, apartment building complexes and health care facilities) and
geographic location.

OVER-THE-COUNTER OPTIONS

The STRATEGIC INCOME FUND, INSURED TAX-FREE BOND FUND, GROWTH EQUITY FUND,
STELLAR FUND, CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND (via
underlying funds) may generally purchase over-the-counter options on
portfolio securities in negotiated transactions with the writers of the
options when options on the portfolio securities held by these funds are not
traded on an exchange. The funds purchase options only with investment
dealers and other financial institutions (such as commercial banks or savings
associations) deemed creditworthy by the investment adviser.

Over-the-counter options are two-party contracts with price and terms
negotiated between buyer and seller. In contrast, exchange-traded options
are third party contracts with standardized strike prices and expiration
dates and are purchased from a clearing corporation. Exchange-traded options
have a continuous liquid market while over-the-counter options may not.

REVERSE REPURCHASE AGREEMENTS

The TREASURY FUND, STRATEGIC INCOME FUND, INSURED TAX-FREE BOND FUND, GROWTH
EQUITY FUND, RELATIVE VALUE FUND, STELLAR FUND, CAPITAL APPRECIATION FUND and
INTERNATIONAL EQUITY FUND (via underlying funds) may enter into reverse
repurchase agreements. This transaction is 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.

When effecting reverse repurchase agreements, liquid assets of a fund, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market
daily and are maintained until the transaction is settled. During the period
any reverse repurchase agreements are outstanding, the fund will restrict the
purchase of portfolio instruments to money market instruments maturing on or
before the expiration date of the reverse repurchase agreements, but only to
the extent necessary to assure completion of the reverse repurchase
agreements. 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.

INVESTMENTS IN CASH

From time to time, such as when suitable municipal bonds are not available,
the INSURED TAX-FREE 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 municipal securities and thereby reduce the fund's yield.

LEVERAGE THROUGH BORROWING

The STRATEGIC INCOME FUND, INSURED TAX-FREE BOND FUND and INTERNATIONAL
EQUITY FUND (via underlying funds) may borrow money for investment purposes.
This borrowing, which is known as leveraging, generally will be unsecured,
except to the extent a fund enters into reverse repurchase agreements. The
1940 Act requires the funds to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of borrowings)
of 300% of the amount borrowed. If the 300% asset coverage should decline as
a result of market fluctuations or other reasons, the funds may be required
to sell some of their portfolio holdings within three days to reduce the debt
and restore the 300% asset coverage. However, it may be disadvantageous from
an investment standpoint to sell securities at that time.

Among the forms of borrowing in which a fund may engage is the entry into
reverse repurchase agreements with banks, brokers or dealers. These
transactions involve the transfer by a fund of an underlying debt instrument
in return for cash proceeds based on a percentage of the value of the
security. The fund retains the right to receive interest and principal
payments on the security. At an agreed upon future date, a fund repurchases
the security at an agreed-upon price. In certain types of agreements, there
is no agreed upon repurchase date, and interest payments are calculated
daily, often based on the prevailing U.S. government securities or other
high-quality liquid debt securities at least equal to the aggregate amount of
its reverse repurchase obligations, plus accrued interest, in certain cases,
in accordance with releases promulgated by the SEC. The SEC views reverse
repurchase transactions as collateralized borrowings by a fund. These
agreements, which are treated as if reestablished each day, are expected to
provide a fund with a flexible borrowing tool.

Borrowing by a fund creates an opportunity for increased net income, but at
the same time, creates special risk considerations. For example, leveraging
may exaggerate the effect on net asset value of any increase or decrease in
the market value of a fund's portfolio. To the extent the income derived
from securities purchased with borrowed funds exceeds the interest a fund
will have to pay, the fund's net income will be greater than if borrowing
were not used.

Conversely, if the income from the assets retained with borrowed funds is not
sufficient to cover the cost of borrowing, the net income of a fund will be
less than if borrowing were not used, and, therefore, the amount available
for distribution to shareholders as dividends will be reduced. A fund also
may be required to maintain minimum average balances in connection with such
borrowing or to pay a commitment or other fee to maintain a line of credit;
either of these requirements would increase the cost of borrowing over the
stated interest rate.

LENDING OF PORTFOLIO SECURITIES

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND,
CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND (via underlying
funds) may lend portfolio securities to one-third of the value of their total
assets, on a short- or long-term basis, to broker/dealers, banks or other
institutional borrowers of securities. The collateral received when a fund
lend 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.
A fund may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on the
cash or equivalent collateral to the borrower or placing broker.

The fund would not have the right to vote securities on loan, but would
terminate the loan and regain the right to vote if that were considered
important with respect to the investment. The fund will only enter into loan
arrangements with broker/dealers, banks or other institutions that the
investment adviser has determined are creditworthy under guidelines
established by the fund's Board of Trustees. The fund must also receive
collateral in the form of cash or U.S. government securities equal to at
least 100% of the securities loaned at all times.

BANK INSTRUMENTS

The RELATIVE VALUE FUND may invest in domestic bank obligations such as:

O certificates of deposit,
O demand and time deposits,
O bankers' acceptances,
O notes,
O bonds, and
O discount notes of the following U.S. government agencies or
instrumentalities:
(i) Federal Home Loan Banks,
(ii) FNMA,
(iii) GNMA,
(iv) National Bank for Cooperatives,
(v) Banks for Cooperatives,
(vi) Tennessee Valley Authority,
(vii) Export-Import Bank of the United States,
(viii) Commodity Credit Corporation,
(xi) Federal Financing Bank,
(x) The Student Loan Marketing Association,
(xi) FHLMC, or
(xii) National Credit Union Administration.

In addition to domestic bank obligations, the 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.

MONEY MARKET SECURITIES

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND and CAPITAL APPRECIATION FUND
may invest in U.S. dollar and foreign dollar short-term money market
instruments. The U.S. GOVERNMENT INCOME FUND may invest in only U.S.
short-term money market instruments. The short-term money market instruments
include:

O commercial paper rated A-1 or A-2 by S&P, Prime-1 or Prime-2 by Moody's,
or F-1 or F-2 by Fitch. In the case where commercial paper has received
different ratings from different rating services, such commercial paper
is acceptable so long as at least one rating is in the two highest
categories of the nationally recognized statistical rating organizations
("NRSROs") described above;
O instruments of domestic and foreign banks and savings associations (such
as certificates of deposit, demand and time deposits and bankers'
acceptances) if they have capital, surplus, and undivided profits of
over $100,000,000, or if BIF or SAIF insures the principal amount of the
instrument. These instruments may include Eurodollar Certificates of
Deposit, Yankee Certificates of Deposit, and Eurodollar Time Deposits;
O obligations of the U.S. government or its agencies or instrumentalities;
O repurchase agreements; and
O other short-term instruments that are not rated but are determined by
the investment adviser to be of comparable quality to the other
obligations in which the funds may invest.

INVESTMENTS IN FOREIGN SECURITIES

The types of international securities in which the GROWTH EQUITY FUND,
STELLAR FUND and CAPITAL APPRECIATION FUND may invest include other
investment companies that invest primarily in international securities. The
international securities include equity securities of non-U.S. companies and
corporate and government fixed-income securities denominated in currencies
other than U.S. dollars. The international equity securities may be traded
domestically or abroad through various stock exchanges, American Depositary
Receipts or International Depositary Receipts (ADRs or IDRs). The
international fixed-income securities include ADRs, IDRs, and government
securities of other nations and must be rated Baa or better by Moody's or BBB
or better by S&P. If the securities are unrated, the adviser must determine
that they are of similar quality to the rated securities before a fund may
invest in them.

Although considered separate securities categories for purposes of the
STELLAR FUND'S investment policies, the fund's investment in money market
securities issued by foreign banks and in international securities could
result in up to 50% of the fund's net assets being invested in securities of
foreign issuers. In addition, the fund's investment in precious metals
securities of foreign issuers, when aggregated with the above, could result
in greater than 50% of the fund's net assets being invested in securities of
foreign issuers. The GROWTH EQUITY FUND and CAPITAL APPRECIATION FUND do not
intend to invest more than 10% of their respective assets in international
securities

INVESTMENT RISKS OF 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.

Investing in foreign securities can carry higher returns and risks than
those associated with domestic investments. Foreign securities may be
denominated in foreign currencies. Therefore, the value in U.S. dollars of
a fund's assets and income may be affected by changes in exchange rates and
regulations. Although the funds value their assets daily in U.S. dollars,
they will not convert their holdings of foreign currencies to U.S. dollars
daily. When a fund converts its holdings to another currency, it may incur
currency conversion costs. Foreign exchange dealers realize a profit on
the difference between the prices at which they buy and sell currencies.

Other differences between investing in foreign companies and the U.S.
include:

O information is less publicly available
O there is a lack of uniform financial accounting standards applicable
to foreign companies
O market quotations are less readily available
O there are differences in government regulation and supervision of
foreign securities exchanges, brokers, listed companies and banks
O there is generally a lower foreign securities market volume
O it is likely that foreign securities may be less liquid or more
volatile
O there are generally higher foreign brokerage commissions
O there may be difficulties in enforcing contractual obligations or
obtaining court judgments abroad because of differences in the legal
systems
O the mail service between countries may be unreliable
O there are political or financial changes that adversely affect
investments in some countries.

INVESTMENT RISKS OF U.S. GOVERNMENT POLICIES REGARDING INVESTMENTS ABROAD

In the past, U.S. government policies have discouraged or restricted
certain investments abroad. Although the funds are unaware of any current
restrictions that would materially adversely affect their ability to meet
their investment objectives and policies, investors are advised that these
U.S. government policies could be reinstituted.

FOREIGN CURRENCY TRANSACTIONS

The STRATEGIC INCOME FUND may use foreign currency transactions to settle
securities transactions. Currency transactions may be conducted either on a
spot or cash basis at prevailing rates or through forward foreign currency
exchange contracts (see below). Because foreign securities may be
denominated in foreign currencies, changes in foreign currency exchange rates
could affect the fund's net asset value, the value of interest earned, gains
and losses realized on the sale of securities, and net investment income and
capital gain. If the value of a foreign currency rises against the U.S.
dollar, the value of an underlying fund's assets denominated in that currency
will increase. If the value of the foreign currency declines against the
U.S. dollar, the value of the underlying fund assets denominated in that
currency decrease. Foreign currency transactions may be used to protect
assets against adverse changes in foreign currency exchange rates or exchange
control regulations. However, these transactions may limit potential gains
that might result from an increase in the value of the currency and could
cause losses.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

The STRATEGIC INCOME FUND may engage in forward foreign currency exchange
contracts, which are obligations to purchase or sell an amount of a
particular currency at a specific price and on a future date agreed upon by
the parties. The fund may be able to protect against the decline of a
particular foreign currency be entering into a forward contract to sell an
amount of the currency at an approximated value of all or a portion of the
assets in that currency. However, this type of short-term hedging strategy
is very uncertain due to the difficulties of predicting short-term currency
market movement and of precisely matching forward contract amounts with the
constantly changing value of the securities involved.

Also, although the fund may purchase and write put and call options on
foreign currencies to protect against decline, those transactions involve a
degree of risk. For instance, the fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates that would cause the
fund to incur losses.

Generally, no commission charges or deposits are involved. At the time the
fund enters into a forward contract, fund assets with a value equal to the
fund's obligation under the forward contract are segregated on the fund's
records and are maintained until the contract has been settled. The fund
will not enter into a forward contract with a term of more than one year.
The fund will generally enter into a forward contract to provide the proper
currency to settle a securities transaction at the time the transaction
occurs ("trade date"). The period between the trade date and settlement date
will vary between 24 hours and 30 days, depending upon local custom.

Although the adviser will consider the likelihood of changes in currency
values when making investment decisions, the adviser believes that it is
important to be able to enter into forward contracts when it believes the
interests of the fund will be served. The fund will not enter into forward
contracts for hedging purposes in a particular currency in an amount in
excess of the fund's assets denominated in that currency.

OPTIONS TRANSACTIONS

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND,
STELLAR FUND and CAPITAL APPRECIATION FUND may engage in options
transactions. These funds may purchase and sell options both to increase
total returns and to hedge against the effect of changes in the value of
portfolio securities.

The funds may write (sell) covered call options and covered put options.
(The STRATEGIC INCOME FUND may only write covered call and put options to the
extent of 20% of the value of its net assets at the time such option
contracts are written.) By writing a call option, a fund become obligated
during the term of the option to deliver the securities underlying the option
upon payment of the exercise price. By writing a put option, a fund becomes
obligated during the term of the option to purchase the securities underlying
the option at the exercise price if the option is exercised.

All options written by the funds must be "covered" options. This means that,
so long as a fund is obligated as the writer of a call option, it will own
the underlying securities subject to the option (or in the case of call
options on U.S. Treasury bills, substantially similar securities) or have the
right to obtain such securities without payment of further consideration (or
have segregated cash in the amount of an additional consideration).

The funds will be considered "covered" with respect to a put option they
write if, so long as it is obligated as the writer of the put option, they
deposit and maintain with their custodian in a segregated account liquid
assets having a value equal to or greater than the exercise price of the
option. (In the case of the STELLAR FUND, the aggregate value of the
obligations underlying the puts will not exceed 50% of the fund's net
assets.)

The principal reason for writing call or put options is to manage price
volatility (or risk). In addition, the funds will attempt to obtain, through
a receipt of premiums, a greater current return than would be realized on the
underlying securities alone. The funds receive a premium from writing a call
or put option that they retain whether or not the option is exercised. By
writing a call option, a fund might lose the potential for gain on the
underlying security while the option is open, and by writing a put option,
the fund might become obligated to purchase the underlying security for more
than the current market price upon exercise. A fund will write put options
only on securities which the fund wishes to have in its portfolio and where
the fund has determined, as an investment consideration, that it is willing
to pay the exercise price of the option.

Investments in put and call options may not exceed 5% of a fund's assets,
represented by the premium paid, and will only relate to specific securities
(or groups of specific securities) in which the fund may invest. The fund
may purchase put and call options for the purpose of offsetting previously
written put and call options of the same series. If a fund is unable to
effect a closing purchase transaction with respect to covered options it has
written, the fund will not be able to sell the underlying securities or
dispose of assets held in a segregated account until the options expire or
are exercised. Put options may also be purchased to protect against price
movement in particular securities in the fund's portfolio. A put option
gives a fund, in return for a premium, the right to sell the underlying
security to the writer (seller) at a specified price during the term of the
option. A fund will purchase options only to the extent permitted by the
policies of state securities authorities in states where shares of the fund
are qualified for offer and sale.

FUTURES AND OPTIONS TRANSACTIONS

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE BOND
FUND, GROWTH EQUITY FUND, CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY
FUND (via underlying funds) may invest in futures and options transactions as
a means of reducing fluctuations in the funds' net asset value. These funds
may attempt to hedge all or a portion of their portfolios by buying and
selling futures contracts and options on futures contracts, and buying put
and call options on securities indices. The funds may also purchase put
options on portfolio securities to hedge a portion of their portfolio
investments. The funds will maintain positions in securities, option rights,
and segregated cash subject to puts and calls until the options are
exercised, closed or have expired. An option position on futures contracts
may be closed out over-the-counter or on a nationally recognized exchange
which provides a secondary market for options of the same series.

FUTURES CONTRACTS

The funds may purchase and sell 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. Although some futures contracts call for making
or taking delivery of the underlying securities, in most cases these
obligations are closed out before the settlement date. The closing of a
contractual obligation is accomplished by purchasing or selling an
identical offsetting futures contract. Other futures contracts by their
terms call for cash settlements.

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
securities ("going long") at a certain time in the future. For example, in
the fixed income securities market, prices move inversely to interest
rates. A rise in rates means a drop in price. Conversely, a drop in rates
means a rise in price. To hedge their holdings or fixed income securities
against a rise in market interest rates, a fund could enter into contracts
to deliver securities at a predetermined price (i.e., "go short"). Going
short protects the funds against the possibility that the prices of their
fixed income securities may decline during the funds' anticipated holding
period. A fund would "go long" (agree to purchase securities in the future
at a predetermined price) to hedge against a decline in market interest
rates.

Stock index futures contracts are based on indices that reflect the market
value of common stock of the firms included in the indices. An index
futures contract is an agreement pursuant to which two parties agree to
take or make delivery of an amount of cash equal to the differences between
the value of the index at the close of the last trading day of the contract
and the price at which the index contract was originally written.

"MARGIN" IN FUTURES TRANSACTIONS

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE
BOND FUND, GROWTH EQUITY FUND, CAPITAL APPRECIATION FUND and INTERNATIONAL
EQUITY FUND (via underlying funds) and may engage in margin in futures
transactions. Unlike the purchase or sale of a security, the funds do not
pay or receive money upon the purchase or sale of a futures contract.
Rather, a fund is required to deposit an amount of "initial margin" in
cash, U.S. government securities or highly liquid debt securities 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. 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 a 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 position.

A fund is also required to deposit and maintain margins when it writes call
options on futures contracts. When a fund purchase 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). The cash is segregated to provide collateral and to
insure that the use of the futures contracts is not leveraged.

Regarding INSURED TAX-FREE BOND FUND, to the extent required to comply with
CFTC Regulation 4.5 and thereby avoid status as a "commodity pool
operator," the fund will not enter into a futures contract for other than
bona fide hedging purposes. The fund will also not purchase an option on a
futures contract if immediately thereafter the initial margin deposits for
futures contracts held by the fund, plus premiums paid by it for open
options on futures contracts, would exceed 5% of the market value of the
fund's net assets after taking into account the unrealized profits and
losses on those contracts it has entered into. In the case of an option
that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in computing such 5%.

Second, INSURED TAX-FREE BOND FUND will not enter into these contracts for
speculative purposes; rather, these transactions are entered into only for
bona fide hedging purposes, or other permissible purposes pursuant to
regulations promulgated by the CFTC. 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 commodity futures or commodity options markets.
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 FUTURES CONTRACTS

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE
BOND FUND, GROWTH EQUITY FUND, CAPITAL APPRECIATION FUND and INTERNATIONAL
EQUITY FUND (via underlying funds) may purchase listed put options on
futures contracts to protect portfolio securities against decreases in
value resulting from market factors, such as an anticipated increase in
interest rates or decrease in stock prices. Unlike entering directly into
a futures contract, which requires the purchaser to buy a financial
instrument on a set date at a specified price, the purchase of a put option
on a futures contract entitles (but does not obligate) its purchaser to
decide on or before a future date whether to assume a short position at the
specified price.

Generally, if the hedged portfolio securities decrease in value during the
term of an option, the related futures contracts will also decrease in
value and the option will increase in value. In such an event, a the fund
will normally close out its options 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, a fund may exercise its put options to close out the
position. To do so, it would simultaneously enter into futures contracts
of the type underlying the options (for a price less than the strike price
of the option) and exercise the options. 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.

The INSURED TAX-FREE BOND FUND may write listed put options on futures
contracts to hedge its portfolio against a decrease in market interest
rates. The fund will use these transactions to attempt to protect its
ability to purchase portfolio securities in the future at price levels
existing at the time it enters into the transaction. When the fund writes
(sells) a put on a futures contract, it receives a cash premium in exchange
for granting to the purchaser of the put the right to receive from the
fund, at the strike price, a short position in the futures contract. (The
fund undertakes the obligation to assume a long futures position.) This is
done even though the strike price upon exercise of the option is greater
than the value of the futures position received by such holder. As market
interest rates decrease, the market price of the underlying futures
contract normally increases. As the market value of the underlying futures
contract increases, the buyer of the put option has less reason to exercise
the put because the buyer can sell the same futures contract at a higher
price in the market. If the value of the underlying futures position is
not such that exercise of the option would be profitable to the option
holder, the option will generally expire without being exercised. The
premium received by the fund can then be used to offset the higher prices
of portfolio securities to be purchased in the future.

To avoid the exercise of an option sold by the INSURED TAX-FREE BOND FUND,
the general policy of the fund is to cancel its obligations under an option
by entering into a closing purchase transaction, if available. However, if
the fund determines that it is in its best interest to deliver the
underlying futures position, the fund will not cancel its option
obligations. A closing purchase transaction consists of the purchase by
the fund of an option having the same term as the option sold by the fund,
and has the effect of canceling the fund's position as a seller. The
premium paid by the fund in executing a closing purchase transaction may be
higher than the premium received when the option was sold depending, in
large part, upon the relative price of the underlying futures position at
the time of each transaction. If the hedge is successful, the cost of
buying the second option will be less than the premium received by the fund
for the initial option.

CALL OPTIONS ON FUTURES CONTRACTS

In addition to purchasing put options on futures, the STRATEGIC INCOME
FUND, U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE BOND FUND, GROWTH
EQUITY FUND, CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND (via
underlying funds) may write listed call options on futures contracts to
hedge their portfolios. When a fund writes call options on futures
contracts, 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 options if the options are exercised. As market
interest rates rise, causing the prices of futures to go down, 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 the
fund keeps the premium received for the option. This premium can
substantially offset the drop in value of the fund's fixed income or
indexed portfolio that is occurring as interest rates rise.

Prior to the expiration of a call written by a 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 decrease in value of
the hedged securities.

A fund will not maintain open positions in futures contracts it has sold or
call options it has written if, in the aggregate, the value of the open
positions (marked to market) exceeds the current market value of their
securities 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.

An additional way in which the INSURED TAX-FREE BOND FUND may hedge against
decreases in market interest rates is to buy a listed call option on a
futures contract. The fund will use these transactions to attempt to
protect its ability to purchase portfolio securities in the future at price
levels existing at the time it enters into the transaction. When the fund
purchases a call on a futures contract, it receives the right (but not the
obligation) to enter into the underlying futures contract at a strike price
determined at the time the call was purchased. The fund is able to do this
regardless of the comparative market value of the futures position at the
time that the option is exercised. The holder of a call option has the
right to receive a long (or buyer's) position in the underlying futures
contract. As market interest rates fall or stock prices increase, the
value of the underlying futures contract will normally increase, resulting
in an increase in value of the fund's option position. When the market
price of the underlying futures contract increases above the strike price
plus premium paid, the fund could exercise its option and buy the futures
contract below market price. Prior to the exercise or expiration of the
call option, the fund could sell an identical call option and close out its
position. If the premium received upon selling the offsetting call is
greater than the premium originally paid, the fund has completed a
successful hedge.

CALL OPTIONS ON STOCK INDEX FUTURES CONTRACTS

In addition to writing call options on futures contracts, the STRATEGIC
INCOME FUND, GROWTH EQUITY FUND, CAPITAL APPRECIATION FUND and
INTERNATIONAL EQUITY FUND (via underlying funds) may write listed and over-
the-counter call options on stock index futures contracts (including cash-
settled stock index options) to hedge their portfolio against a decrease in
stock prices. When a fund writes a call option on a futures contract, it
is undertaking the obligation of assuming a short futures position (selling
a futures contract) at the fixed strike price at any time during the life
of the option if the option is exercised. As stock prices fall, causing
the prices of futures to go down, a 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.

STOCK INDEX OPTIONS

The STRATEGIC INCOME BOND FUND, GROWTH EQUITY FUND, CAPITAL APPRECIATION
FUND and INTERNATIONAL EQUITY FUND (via underlying funds) may write (sell),
and may purchase, put options on stock indices listed on national
securities exchanges or traded in the over-the-counter market. A stock
index fluctuates with changes in the market value of the stocks listed in
the index.

When a fund write options, an amount equal to the net premium received by
the fund is included in the liability section of the fund's Statement of
Assets and Liabilities as a deferred credit. The amount of the deferred
credit will be subsequently marked to market to reflect the current market
value of the options written. The current market value of a traded option
is the last sale price or, in the absence of a sale, the mean between the
closing bid and asked price. If an option expires on its stipulated
expiration date or if the fund enters into a closing purchase transaction,
the fund will realize a gain (or loss if the cost of a closing purchase
transaction exceeds the premium received when the option was sold), and the
deferred credit related to such option will be eliminated.

The purchase of a put option would entitle a fund, in exchange for the
premium paid, to sell the underlying securities at a specified price during
the option period. The purchase of such puts is designed merely to offset
or hedge against a decline in the market value of an index. A fund would
ordinarily recognize a gain if the value of the index decreased below the
exercise price sufficiently to cover the premium and would recognize a loss
if the value of the index remained at or above the exercise price.

The effectiveness of writing or purchasing stock index options will depend
upon the extent to which price movements in the fund's portfolio correlate
with price movements of the stock index selected. Because the value of an
index option depends upon movements in the level of the index rather than
the price of a particular stock, whether a fund will realize a gain or loss
from the purchase of the option on an index generally depends upon
movements in the level of stock prices in the stock market. In the case of
certain indices, gain or loss depends upon movement of stock prices in an
industry or market segment rather than movements in the price of a
particular stock. Accordingly, successful use by a fund of options on
stock indices will be subject to the ability of the adviser to predict
correctly movements in the directions of the stock market generally or of a
particular industry. This requires different skills and techniques than
predicting changes in the prices of individual stocks.

PURCHASING PUT OPTIONS ON PORTFOLIO SECURITIES

The INSURED TAX-FREE BOND FUND, U.S. GOVERNMENT INCOME FUND and
INTERNATIONAL FUND (via underlying funds) may purchase put options on
portfolio securities to protect against price movements in their funds'
portfolio securities. A put option gives a fund, in return for a premium,
the right to sell the underlying security to the writer (seller) at a
specified price during the term of the option.

PURCHASING CALL OPTIONS ON PORTFOLIO SECURITIES

The INTERNATIONAL EQUITY FUND (via underlying funds) may purchase call
options on portfolio securities to protect against price movements in the
fund's portfolio securities. A call option gives the underlying fund, in
return for a premium, the right (but not the obligation) to buy the
underlying securities from the seller at a specified price during the term
of the option.

WRITING COVERED PUT AND CALL OPTIONS ON PORTFOLIO SECURITIES

The U.S. GOVERNMENT INCOME FUND may write covered call options to generate
income. As 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 fund may only sell call
options either on securities held in its portfolio or on securities, which
it has the right to obtain without payment of further consideration (or has
segregated cash in the amount of any additional consideration).

The INTERNATIONAL EQUITY FUND (via underlying funds) may write covered put
and call options to generate income and thereby protect against price
movements in particular securities in the underlying funds' portfolios. As
the writer of a call option, an underlying fund has the obligation upon
exercise of the option during the option period to deliver the underlying
security upon payment of the exercise price. Where an underlying fund
writes a put option on a futures contract, it is undertaking to buy a
particular futures contract at a fixed price at any time during a specified
period if the option is exercised.

An underlying fund may only write 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 additional consideration). In the case of put options, the underlying
fund will segregate cash, U.S. Treasury obligations or liquid securities
with a value equal to or greater than the exercise price of the underlying
securities.

RISKS

When a 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 contract and any related
options to react differently to market changes than the portfolio
securities. In addition, the adviser could be incorrect in its
expectations about the direction or extent of market factors such as
interest rate movements. In these events, a 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 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. A fund's ability to establish and close out futures and options
positions depends on this secondary market. The inability to close these
positions could have an adverse effect on the fund's ability to hedge its
portfolio.

To minimize risks, a 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 after taking into account the unrealized profits and losses on those
contracts it has entered into. In the case of an option that is in-the-
money at the time of purchase, the in-the-money amount may be excluded in
computing such 5%.

When a 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). The cash is segregated to provide collateral and to insure
that the use of the futures contracts is not leveraged. When a fund sells
futures contracts, they 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.

MORTGAGE-BACKED SECURITIES

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND, STELLAR FUND and U.S.
GOVERNMENT INCOME FUND may invest in 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:

1. Those issued or guaranteed by the U.S. government or one of its
agencies or instrumentalities, such as Government National Mortgage
Association ("GNMA"), Federal National Mortgage Association ("FNMA")
and Federal Home Loan Mortgage Corporation ("FHLMC");
2. 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
3. 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.

Mortgage-backed securities generally pay back principal and interest over the
life of the security. At the time a 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 ("prepayments risks"). Mortgage-backed securities are subject to
higher prepayment risks than most other types of debt instruments with
prepayment risks because the underlying mortgage loans may be prepaid without
penalty or premium. Prepayment risk on mortgage-backed securities tends 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.

ADJUSTABLE RATE MORTGAGE SECURITIES ("ARMS")

The GROWTH EQUITY FUND, STRATEGIC INCOME FUND, STELLAR FUND and U.S.
GOVERNMENT INCOME FUND may invest in ARMS. ARMS are actively traded,
mortgage-backed securities representing interests in adjustable rather than
fixed interest rate mortgages. These funds invest in ARMS issued by GNMA,
FNMA, and FHLMC. The underlying mortgages which collateralize ARMS issued by
GNMA are fully guaranteed by the Federal Housing Administration or Veterans
Administration, while those collateralizing ARMS issued by FHLMC or FNMA are
typically conventional residential mortgages conforming to strict
underwriting size and maturity constraints.

Unlike conventional bonds, ARMS pay back principal over the life of the ARMS
rather than at maturity. Thus, holders of the ARMS, would receive monthly
scheduled payments of principal and interest, and may receive unscheduled
principal payments representing payments on the underlying mortgages. At the
time that a holder of the ARMS reinvests the payments and any unscheduled
prepayments of principal that it receives, the holder may receive a rate of
interest which is actually lower than the rate of interest paid on the
existing ARMS. As a consequence, ARMS may be a less effective means of
"locking in" long-term interest rates than other types of U.S. government
securities.

Not unlike other U.S. government securities, the market value of ARMS will
generally vary inversely with changes in market interest rates. Thus, the
market value of ARMS generally declines when interest rates rise and
generally rises when interest rates decline.

While ARMS generally entail less risk of a decline during periods of rapidly
rising rates, ARMS may also have less potential for capital appreciation than
other similar investments (e.g., investments with comparable maturities)
because as interest rates decline, the likelihood increases that mortgages
will be prepaid. Furthermore, if ARMS are purchased at a premium, mortgage
foreclosures and unscheduled principal payments may result in some loss of a
holder's principal investment to the extent of the premium paid. Conversely,
if ARMS are purchased at a discount, both a scheduled payment of principal
and an unscheduled prepayment of principal would increase current and total
returns and would accelerate the recognition of income, which would be taxed
as ordinary income when distributed to shareholders.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS")

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND, STELLAR FUND and U.S.
GOVERNMENT INCOME FUND may invest in CMOs. CMOs are debt obligations
collateralized by mortgage loans or mortgage-backed securities. Typically,
CMOs are collateralized by GNMA, FNMA or FHLMC certificates, but may be
collateralized by whole loans or private mortgage-backed securities.
The funds will invest only in CMOs rated AAA by a nationally recognized
rating organization (NRSRO) 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) privately issued securities in which the proceeds of the issuance are
invested in mortgage securities and payment of the principal and
interest are supported by the credit of an agency or instrumentality of
the U.S. government.

The following example illustrates how mortgage cash flows are prioritized in
the case of CMOs--most of the CMOs in which the funds invest use the same
basic structure:

(a) Several classes of securities are issued against a pool of mortgage
collateral. The most common structure contains four classes of
securities. The first three (A, B, and C bonds) pay interest at their
stated rates beginning with the issue date. The final class (Z bond)
typically receives any excess income from the underlying investments
after payments are made to the other classes and receives no principal
or interest payments until the shorter maturity classes have been
retired. The Z bond class then receives all remaining principal and
interest payments.
(b) The cash flows from the underlying mortgages are applied first to pay
interest and then to retire securities.
(c) The classes of securities are retired sequentially. All principal
payments are directed first to the shortest-maturity class (or A bond).
When those securities are completely retired, all principal payments
are then directed to the next-shortest-maturity security (or B bond).
This process continues until all of the classes have been paid off.

Because the cash flow is distributed sequentially instead of pro-rata, as
with pass-through securities, the cash flows and average lives of CMOs are
more predictable, and there is a period of time during which the investors in
the longer-maturity classes receive no principal paydowns.

ASSET-BACKED SECURITIES

The GROWTH EQUITY FUND, STRATEGIC INCOME FUND, STELLAR FUND and U.S.
GOVERNMENT INCOME FUND may invest in asset-backed securities. Asset-backed
securities have structural characteristics similar to mortgage-backed
securities but have underlying assets that generally are not mortgage loans
or interests in mortgage loans. These funds may invest in asset-backed
securities rated AAA by an NRSRO including, but not limited to, interests in
pools of receivables, such as motor vehicle installment purchase obligations
and credit card receivables, equipment leases, manufactured housing (mobile
home) leases or home equity loans. 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.

INVESTMENT 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 a 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. 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.

While mortgage-backed securities generally entail less risk of a decline
during periods of rapidly rising interest rates, mortgage-backed securities
may also have less potential for capital appreciation than other similar
investments (e.g., investments with comparable maturities) because as
interest rates decline, the likelihood increases that mortgages will be
prepaid. Furthermore, if mortgage-backed securities are purchased at a
premium, mortgage foreclosures and unscheduled principal payments may result
in some loss of a holder's principal investment to the extent of the premium
paid. Conversely, if mortgage-backed securities are purchased at a discount,
both a scheduled payment of principal and an unscheduled prepayment of
principal would increase current and total returns and would accelerate the
recognition of income, which would be taxed as ordinary income when
distributed to shareholders.

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 re-registered because the owner and
obligor moves to another state, such re-registration 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.

MUNICIPAL SECURITIES

The TAX -FREE MONEY MARKET FUND, OHIO TAX-FREE MONEY MARKET FUND and INSURED
TAX-FREE BOND FUND invest primarily in municipal securities. Municipal
securities are debt obligations issued by or on behalf of states,
territories, and possessions of the United States, including the District of
Columbia, and any political subdivisions or financing authority of any of
these, the income from which is, in the opinion of qualified legal counsel,
exempt from federal regular income tax ("Municipal Securities").

Municipal Securities are generally issued to finance public works such as
airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, street, 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.

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.

The TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND invest in
Municipal Securities with remaining maturities of 397 days or less at the
time of purchase by a fund.

The INSURED TAX-FREE BOND FUND may invest in, but is not limited to, the
following types of Municipal Securities:

O industrial development bonds;
O municipal notes and bonds;
O serial notes and bonds sold with a series of maturity dates;
O tax anticipation notes and bonds 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 prerefunded municipal bonds refundable at a later date (payment of
principal and interest on prerefunded bonds are assured through the
first call date by the deposit in escrow of U.S. government securities);
and
O general obligation bonds secured by a municipality's pledge of taxation.

CHARACTERISTICS

When determining whether a Municipal Security presents minimal credit
risks, the investment adviser considers the creditworthiness of the issuer
of a Municipal Security, the issuer of a demand feature if a fund has the
unconditional right to demand payment from the issuer of the interest, or
the credit enhancer of payment by either of those issuers. A fund is not
required to sell a Municipal Security if the security's rating is reduced
below the required minimum subsequent to the fund's purchase of the
security. The Trustees and the investment adviser consider this event,
however, in the determination of whether a fund should continue to hold the
security in its portfolio. If ratings made by Moody's Investors
Service, Inc., Standard & Poor's Ratings Group, or Fitch Investors Service,
Inc., change because of changes in those organizations or in their rating
systems, the funds will try to use comparable ratings as standards in
accordance with the investment policies described in the funds'
prospectuses.

Regarding the INSURED TAX-FREE BOND FUND, securities rated Baa or BBB by an
NRSRO have speculative characteristics. Changes in economic conditions or
other circumstances are more likely to lead to weakened capacity to make
principal and interest payments than higher rated bonds. If any security
invested in by the fund 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.

There are no restrictions on the maturity of municipal securities in which
the fund may invest. The fund will seek to invest in Municipal Securities
of such maturities as the investment adviser believes will produce current
income consistent with prudent investment. The investment adviser will
also consider current market conditions and the cost of the insurance
obtainable on such securities.

PARTICIPATION INTERESTS

The financial institutions from which the tax-free funds purchase
participation interests frequently provide or secure from other financial
institutions irrevocable letters of credit or guarantees and give the funds
the right to demand payment on specified notice (normally within 7 days for
the money market fundsand 30 days for the bond fund) from the issuer of the
letter of credit or guarantee. These financial institutions may charge
certain fees in connection with their repurchase commitments, including a
fee equal to the excess of the interest paid on the municipal securities
over the negotiated yield at which the participation interests were
purchased by a fund. By purchasing participation interests, the fund is
buying a security meeting its quality requirements and is also receiving
the tax-free benefits of the underlying securities.

In the acquisition of participation interests, the investment adviser will
consider the following quality factors:

o a high-quality underlying municipal security (of which the fund takes
possession);
o a high-quality issuer of the participation interest; or
o a guarantee or letter of credit from a high-quality financial
institution supporting the participation interest.

MUNICIPAL LEASES

The TAX-FREE MONEY MARKET FUND, OHIO TAX-FREE MONEY MARKET FUND and INSURED
TAX-FREE BOND FUND may purchase Municipal Securities in the form of
participation interests that represent an undivided proportional interest
in lease payments by a governmental or nonprofit entity. The lease
payments and other rights under the lease provide for and secure payments
on the certificates. Municipal charters or the nature of the appropriation
for the lease may limit lease obligations. 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
participants cannot accelerate lease obligations upon default. The
participants would only be able to enforce lease payments as they became
due. In the event of a default or 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.

Municipal leases may be considered illiquid so the adviser must carefully
examine the liquidity of the lease before investing. The adviser
considers:

1. whether the lease can be terminated by the lessee;
2. the potential recovery, if any, from a sale of the leased property if
the lease was terminated;
3. the lessee's general credit strength;
4. the possibility that the lessee will discontinue appropriating funding
for the lease property because the property is no longer deemed
essential to its operations; and
5. any credit enhancement or legal recourse provided upon an event of
nonappropriation or other termination of the lease.

RATINGS
The securities in which the TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE
MONEY MARKET FUND are permitted to invest are rated in the highest short-
term rating category by one or more ("NRSROs"). A NRSRO's highest rating
category is determined without regard for sub-categories and gradations.
For example, 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. The funds will follow
applicable regulations in determining whether a security rated by more than
one NRSRO can be treated as being in the highest short-term rating
category. Additionally, the funds may purchase unrated securities which
are determined to be of comparable quality of securities rated in the
highest short-term rating category by NRSRO's and which are otherwise
eligible for purchase by the funds.

The funds may also purchase bonds which have no short-term ratings but
which have long-term ratings by NRSROs in the two highest ratings
categories. The funds have the ability but no present intention of
investing in Municipal Securities that are rated MIG2 or VMIG2 by Moody's,
F-2 by Fitch, or A-2 or SP-2 by S&P and tax-exempt commercial paper that is
rated P-2 by Moody's, A-2 by S&P, or F-2 by Fitch, or securities which are
not rated but are deemed to be of comparable quality. Shareholders of the
funds will be notified should the funds decide to invest in these
securities.

CREDIT ENHANCEMENT

Some of the investments of the TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE
MONEY MARKET FUND may be credit enhanced by a guaranty, letter of credit or
insurance. Any bankruptcy, receivership, default or change in the credit
quality of the credit enhancer will adversely affect the quality and
marketability of the underlying security and could cause losses to a fund
and affect its share prices. The funds may have more than 25% of their
respective total assets invested in securities credit-enhanced by banks.
The funds 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, rather than the issuer.

DEMAND FEATURES

The TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND may
purchase securities subject to puts and standby commitments which allow
them to purchase securities at their principal amount within a fixed period
of time following a demand by the funds. 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 separated from the underlying
security. These arrangements provide the funds with liquidity, but do not
protect the funds against changes in the market value of the securities.
If the issuer of the demand feature enters bankruptcy, receivership or some
other event terminates the demand feature before its exercise, the
liquidity of the underlying security will be adversely affected. Demand
features that are exercisable after payment default on the underlying
security may be treated as a form of credit enhancement.

VARIABLE RATE MUNICIPAL SECURITIES

The INSURED TAX-FREE BOND FUND may purchase some municipal securities with
variable interest rates. Variable interest rates are ordinarily stated as
a percentage of the prime rate of a bank or some similar standard, such as
the 91-day U.S. Treasury bill rate. Variable interest rates are adjusted
on a periodic basis (i.e., every 30 days). Many variable rate municipal
securities are subject to payment of principal on demand by the fund,
usually in not more than seven days. If a variable rate municipal security
does not have this demand feature, or the demand feature extends beyond
seven days and the adviser believes the security cannot be sold within
seven days, the adviser may consider the security to be illiquid. However,
the fund's investment limitations provide that it will not invest more than
15% of its net assets in illiquid securities. 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 NRSROs and other analytical services.

Variable interest rates generally reduce changes in the market value of
municipal securities from their original purchase prices. Accordingly, as
interest rates decrease or increase, the potential for capital appreciation
or depreciation is less for variable rate municipal securities than for
fixed income obligations. Many municipal securities with variable interest
rates purchased by the fund are subject to repayment of principal (usually
within seven days) on the fund's demand. The terms of these variable rate
demand instruments require payment of principal and accrued interest from
the issuer of the municipal obligations, the issuer of the participation
interests, or a guarantor of either issuer.

INDUSTRIAL DEVELOPMENT BONDS

The INSURED TAX-FREE BOND FUND may invest in industrial development bonds,
which is a type of municipal security. Industrial development bonds are
generally issued to provide financing aid to acquire sites or construct and
equip facilities for use by privately or publicly owned entities. Most
state and local governments have the power to permit the issuance of
industrial development bonds to provide financing for such entities in
order to encourage the corporations to locate within their communities.
Industrial development bonds, which are in most cases revenue bonds, do not
represent a pledge of credit or create any debt of a municipality or a
public authority, and no taxes may be levied for the payment of principal
or interest on these bonds. The principal and interest is payable solely
out of monies generated by the entities using or purchasing the sites or
facilities. These bonds will be considered municipal securities eligible
for purchase by the fund if the interest paid on them, in the opinion of
bond counsel or in the opinion of the officers of the Trust and/or the
adviser, is exempt from federal income tax. The fund may invest more than
25% of its total assets in industrial development bonds (including
pollution control revenue bonds) as long as they are not from the same
facility or similar types of facilities or projects.

RISKS

Yields on municipal securities depend on a variety of factors, including:
the general conditions of the money market and the taxable and municipal
securities markets; the size of the particular offering; the maturity of
the obligations; and the credit quality of the issue. The ability of the
funds to achieve their investment objectives also depends on the continuing
ability of the issuers of municipal securities to meet their obligations
for the payment of interest and principal when due.

Regarding the INSURED TAX-FREE BOND FUND, the value of the fund's shares
will fluctuate. The amount of this fluctuation is dependent upon the
quality and maturity of the municipal securities in the fund's portfolio,
as well as on market conditions. Municipal securities prices are interest
rate sensitive, which means that their value varies inversely with market
interest rates. Thus, if market interest rates have increased from the
time a security was purchased, the security, if sold, might be sold at a
price less than its cost. Similarly, if market interest rates have
declined from the time a security was purchased, the security, if sold,
might be sold at a price greater than its cost. (In either instance, if the
security was held to maturity, no loss or gain normally would be realized
as a result of interim market fluctuations.)

Further, any adverse economic conditions or developments affecting the
states or municipalities could impact the fund's portfolio. Investing in
municipal securities that meet the fund's quality standards may not be
possible if the states and municipalities do not maintain their current
credit ratings.

MUNICIPAL BOND INSURANCE

The INSURED TAX-FREE BOND FUND may purchase municipal securities covered by
insurance. The insurance guarantees the timely payment of principal at
maturity and interest on such securities. These insured municipal
securities are either:
1. covered by an insurance policy applicable to a particular security,
whether obtained by the issuer of the security or by a third party
("Issuer-Obtained Insurance"), or
2. insured under master insurance policies issued by municipal bond
insurers, which may be purchased by the fund (the "Policies").

The fund will require or obtain municipal bond insurance when purchasing
municipal securities that would not otherwise meet the fund's quality
standards. The fund may also require or obtain municipal bond insurance
when purchasing or holding specific municipal securities when, in the
opinion of the adviser, such insurance would benefit the fund, for example,
through improvement of portfolio quality or increased liquidity of certain
securities. The adviser anticipates that at least 65% of the fund's total
assets will be invested in insured municipal securities.

Issuer-Obtained Insurance Policies are non-cancelable and continue in force
as long as the municipal securities are outstanding and their respective
insurers remain in business. If a municipal security is covered by Issuer-
Obtained Insurance, then such security need not be insured by the Policies
purchased by the fund.

The fund may purchase two types of Policies issued by municipal bond
insurers.

1. One type of Policy covers certain municipal securities only during the
period in which they are in the fund's portfolio. In the event that a
municipal security covered by such a Policy is sold from the fund, the
insurer of the relevant Policy will be liable only for those payments
of interest and principal which are then due and owing at the time of
sale.
2. The other type of Policy covers municipal securities not only while
they remain in the fund's portfolio, but also until their final
maturity even if they are sold out of the fund's portfolio. This
allows the securities to have coverage that benefits all subsequent
holders of those municipal securities. The fund will obtain insurance
covering municipal securities until final maturity even after they are
sold out of the fund's portfolio only if, in the judgment of the
adviser, the fund would receive net proceeds from the sale of those
securities. Net proceeds are calculated after deducting the cost of
the permanent insurance and related fees. Also, the proceeds received
must be significantly more than the proceeds the fund would have
received if the municipal securities were sold without insurance.
Payments received from municipal bond insurers may not be tax-exempt
income to shareholders of the fund.

The fund pays the premiums for the Policies and, as a result, the yield on
the fund's portfolio is reduced. Premiums for the Policies are paid by the
fund monthly, and are adjusted for purchases and sales of municipal
securities during the month. Depending upon the characteristics of the
municipal security held by the fund, the annual premiums for the Policies
are estimated to range from 0.10% to 0.25% of the value of the municipal
securities covered under the Policies, with an average annual premium rate
of approximately 0.175%.

The fund may purchase Policies from Municipal Bond Investors Assurance
Corp. ("MBIA"), AMBAC Indemnity Corporation ("AMBAC"), Financial Guaranty
Insurance Company ("Financial Guaranty"), Financial Security Assurance
("FSA") or any other municipal bond insurer which is rated in the highest
rating category by an NRSRO. Under each Policy, the insurer is obligated
to provide insurance payments pursuant to valid claims. The claims must be
equal to the payment of principal and interest on those municipal
securities the Policy insures. The Policies will have the same general
characteristics and features. A municipal security will be eligible for
coverage if it meets certain requirements set forth in a Policy. In the
event interest or principal on an insured municipal security is not paid
when due, the insurer covering the security will be obligated under its
Policy to make such payment not later than 30 days after it has been
notified by the fund that such non-payment has occurred. The insurance
feature is intended to reduce financial risk, but the cost of the insurance
and compliance with the investment restrictions imposed by the guidelines
in the Policies will reduce the yield to shareholders of the fund.

MBIA, AMBAC, Financial Guaranty and FSA will not have the right to withdraw
coverage on securities insured by their Policies so long as such securities
remain in the fund's portfolio. Also neither, MBIA, AMBAC, Financial
Guaranty or FSA may cancel their Policies for any reason except failure to
pay premiums when due. MBIA, AMBAC, Financial Guaranty and FSA will
reserve the right at any time upon 90 days' written notice to the fund to
refuse to insure any additional municipal securities purchased by the fund
after the effective date of such notice. The Trustees will reserve the
right to terminate any of the Policies if they determine that the benefits
to the fund of having its portfolio insured under such Policy are not
justified by the expense involved.

Additionally, the Board of Trustees reserves the right to enter into
contracts with insurance carriers other than MBIA, AMBAC, Financial
Guaranty or FSA if such carriers are rated in the highest rating category
by an NRSRO.

Under the Policies, municipal bond insurers unconditionally guarantee to
the fund the timely payment of principal and interest on the insured
municipal securities when and as such payments become due. However, the
issuer does not pay principal and interest. In the event of any
acceleration of the due date of the principal, the guaranteed payments will
be made in such amounts and at such times as payments of principal would
have been due had there been no acceleration. Reasons for possible
acceleration are mandatory or optional redemption (other than acceleration
by reason of mandatory sinking fund payments), default or otherwise. The
municipal bond insurers will be responsible for such payments less any
amounts received by the fund from any trustee for the municipal bond
holders or from any other source. The Policies do not guarantee payment on
an accelerated basis, the payment of any redemption premium, the value for
the shares of the fund or payments of any tender purchase price upon the
tender of the municipal securities. The Policies also do not insure
against nonpayment of principal of or interest on the securities resulting
from the insolvency, negligence or any other act or omission of the trustee
or other paying agent for the securities. However, with respect to
small-issue industrial development municipal bonds and pollution-control
revenue municipal bonds covered by the Policies, the municipal bond
insurers guarantee the full and complete payments required to be made by or
on behalf of an issuer. The insurers do this if there are any changes in
the tax-exempt status of interest on such municipal securities, including
principal, interest or premium payments required to be made by or on behalf
of the issuer pursuant to the terms of the municipal securities. A "when-
issued" municipal security will be covered under the Policies upon the
settlement date of the original issue of such "when-issued" municipal
security. In determining whether to insure municipal securities held by
the fund, each municipal bond insurer will apply its own standard, which
corresponds generally to the standards it has established for determining
the insurability of new issues of municipal securities.

Regarding marketability of the fund, if the fund holds the first type of
Policy where the municipal bond insurers are liable only for the fund's
payments of principal and interest, then the fund has no marketability
benefit because the Policy terminates on the date of a sale. On the other
hand, since Issuer-Obtained Insurance will remain in effect as long as the
insured municipal securities are outstanding, such insurance may enhance
the marketability of municipal securities covered thereby, but the exact
effect, if any, on marketability cannot be estimated. The fund generally
intends to retain any securities that are in default or subject to
significant risk of default. The fund will also place a value on the
insurance, which ordinarily will be the difference between the market value
of the defaulted security and the market value of similar securities of
minimum high grade (i.e., rated in the highest rating category by an NRSRO)
that are not in default. To the extent the fund holds defaulted
securities, it may be limited in its ability to manage its investment and
to purchase other municipal securities. Except as described above with
respect to securities that are in default or subject to significant risk of
default, the fund will not place any value on the insurance in valuing the
municipal securities that it holds.

Further information regarding the insurance companies is as follows:

O MUNICIPAL BOND INVESTORS ASSURANCE CORP. Municipal Bond Investors
Assurance Corp. is a wholly owned subsidiary of MBIA, Inc., a Connecticut
insurance company, which is owned by Aetna Life and Casualty, Credit Local
DeFrance CAECL, S.A., The Fund American Companies and the public. The
investors of MBIA, Inc., are not obligated to pay the obligations of MBIA.
MBIA, domiciled in New York, is regulated by the New York State Insurance
Department and licensed to do business in various states. The address of
MBIA is 113 King Street, Armonk, New York 10504, and its telephone number
is (914) 273-4345.

O AMBAC INDEMNITY CORPORATION AMBAC Indemnity Corporation is a Wisconsin-
domiciled stock insurance company, regulated by the Insurance Department of
Wisconsin, and licensed to do business in various states. AMBAC is a
wholly owned subsidiary of AMBAC, Inc., a financial holding company that is
owned by the public. Copies of certain statutory required filings of AMBAC
can be obtained from AMBAC. The address of AMBAC's administrative offices
is One State Street Plaza, 17th Floor, New York, New York 10004, and its
telephone number is (212) 668-0340.

O FINANCIAL GUARANTY INSURANCE COMPANY Financial Guaranty Insurance Company
is a wholly owned subsidiary of FGIC Corporation, a Delaware holding
company. FGIC Corporation is wholly owned by General Electric Capital
Corporation. The investors in FGIC Corporation are not obligated to pay
the debts of or the claims against Financial Guaranty. Financial Guaranty
is subject to regulation by the State of New York Insurance Department and
is licensed to do business in various states. The address of Financial
Guaranty is 175 Water Street, New York, New York 10038, and its telephone
number is (212) 607-3000.

O FINANCIAL SECURITY ASSURANCE HOLDINGS Financial Security Assurance
("FSA"), a wholly-owned subsidiary of Financial Security Assurance Holdings
domiciled in New York, is a mono-line financial guaranty insurer of
municipal bonds and asset-backed securities. The investors in FSA are not
obligated to pay the debts of or the claims against FSA. FSA is subject to
regulation by the State of New York Insurance Department and is licensed to
do business in all fifty states and in the District of Columbia. The
address of FSA is 350 Park Avenue, New York, NY 10022, and its telephone
number is (212) 688-3101.

MORE INFORMATION ABOUT THE OHIO TAX-FREE MONEY MARKET FUND AND INVESTMENT RISKS

As a non-diversified fund, the OHIO TAX-FREE MONEY MARKET FUND has no limit on
the percentage of assets that it may invest in any single issuer. An investment
in the fund, therefore, will entail greater risk than would exist in a
diversified investment company 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 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 may purchase an issue
of municipal securities in its entirety. The fund intends to comply with
Subchapter M of the Internal Revenue Code. This undertaking requires that at
the end of each quarter of the taxable year, the aggregate value of all
investments in any one issuer (except U.S. government obligations, cash and cash
items) that exceed 5% of the fund's total assets shall not exceed 50% of the
value of its total assets. In addition, not more than 25% of its total assets
will be invested in the securities of any one issuer, except government
securities or securities of regulated investment companies.

The fund invests in obligations of Ohio (the "State") issuers which result in
the fund's performance being subject to risks associated with the overall
conditions present within the State. The following information is a brief
summary of the prevailing economic conditions and general summary of the State's
financial condition. This information is based on official statements relating
to securities that are believed to be reliable but should not be considered as a
complete description of all relevant information.

The Ohio economy is largely composed of manufacturing which is concentrated in
the automobile sector and other durable goods. The exposure to these
industries, particularly the auto sector, leaves the State vulnerable to an
economic slowdown associated with business cycles. The State has diversified
its economy over the past decade with services and trade composing roughly 50%
of the economy. Unemployment in Ohio over the past two years has been below the
national average, but population growth, as in many states around the Great
Lakes, has been stagnant.

The State acted promptly in addressing the fall in revenue from the last
recession with an expansion of the sales tax and cuts in appropriations. As a
result of prudent financial management, the State restored the budget
stabilization fund in fiscal 1993. Strong performance resulted in reserve
levels that are well above the levels of 1990.

The overall condition of the State is further demonstrated by its debt ratings.
Ohio, rated Aaa by Moody's Investors Service, Inc. in the 1970's, was downgraded
to Aa in 1979. Moody's recently revised Ohio's rating upward to Aa1 in
September of 1996. Standard & Poor's first rated the State in 1984 at AA; that
rating was also upgraded to AA+ in October of 1996.

The fund's concentration in securities issued by the State and its political
subdivisions provides a greater level of risk than a fund whose assets are
diversified across numerous states and municipal issuers. The ability of the
State or its municipalities to meet their obligations will depend on the
availability of tax and other revenues; economic, political and demographic
conditions within the State; and the underlying fiscal condition of the State,
its counties and its municipalities.

MORE INFORMATION ABOUT THE INTERNATIONAL EQUITY FUND AND INVESTMENT RISKS

Investing in mutual funds involves risk. This risk may be increased when
investing in the INTERNATIONAL EQUITY FUND because the fund invests in a number
of underlying mutual funds. Moreover, investing through the fund in an
underlying portfolio of mutual funds involves certain additional expenses and
certain tax results that would not be present in a direct investment in the
underlying funds.

The fund's investment strategy of investing in the shares of other international
equity funds is designed (but not guaranteed) to reduce the risk associated with
investing in a single underlying fund with a single manager. Holding a
diversified portfolio of international equity funds also may provide access to a
wider range of management talent, companies, industries, countries and markets
than would be available through any one underlying fund. International
securities and markets are subject to currency rate fluctuations and potentially
greater price volatility and liquidity considerations than U.S. securities.
Investors have historically sought to reduce these risks through multi-country
diversification. The fund is designed to give shareholders a single investment
that offers broad international diversification.

The 1940 Act provides that the fund may not purchase the securities of an
underlying fund, if as a result, the fund, together with any of its affiliates,
would own more than 3% of the total outstanding securities of that underlying
fund. For this purpose, shares of underlying funds held by private
discretionary investment advisory accounts managed by the adviser will be
aggregated with those held by the fund. Thus, the fund's ability to invest in
shares of certain underlying funds could be restricted and the adviser may have
to select alternative investments. Accordingly, when affiliated persons and
other accounts managed by the adviser hold shares of any of the underlying
funds, the fund's ability to invest fully in shares of those funds is
restricted. The adviser must then, in some instances, select alternative
investments that would not have been its first preference. By investing in the
fund, shareholders would bear not only the fund's total operating expenses, but
the operating expenses of the underlying funds as well.

The 1940 Act also provides that, when the fund invests in shares of an
underlying fund, the underlying fund will be obligated to redeem shares held by
the fund only in an amount up to 1% of the underlying fund's outstanding
securities during any period of less than 30 days. Therefore, if the fund owns
more than 1% of an underlying fund's outstanding securities, the portion of the
investment exceeding 1% may be considered illiquid and, when added together with
other such illiquid securities, cannot exceed 15% of the fund's net assets.
These limitations are not fundamental investment policies and may be changed by
the Board of Trustees without shareholder approval.

Under certain circumstances, an underlying fund may decide to make a redemption
payment by the fund wholly or partly by an in-kind distribution of securities
from its portfolio, in lieu of cash, in conformity with the rules of the SEC.
In such cases, the fund may hold portfolio securities distributed by an
underlying fund until the adviser determines that it is appropriate to dispose
of such securities.

Investment decisions by the investment advisers of the underlying funds are made
independently of each other and of the fund and the adviser. Therefore, the
investment adviser of one underlying fund may be purchasing shares of the same
issuer whose shares are being sold by the investment adviser of another such
fund. The result of this would be an indirect expense to the fund without
accomplishing any investment purpose.

The fund may purchase shares of both load and no-load underlying funds
(including those with a contingent deferred sales charge). However, in most
cases, the fund anticipates purchasing fund shares without a sales load or
qualifying for a reduction or waiver of any sales load because of the amount it
intends to invest in the underlying fund.

Although the fund will normally invest in open-end management investment
companies, it also may invest in closed-end management investment companies
and/or unit investment trusts. Unlike open-end funds that offer and sell their
shares at net asset value plus any applicable sales charge, the shares of
closed-end funds and unit investment trusts may trade at a market value that
represents a premium, discount or spread to net asset value.

Under the 1940 Act, a mutual fund must sell its shares at the price (including
sales load, if any) described in its prospectus, and current rules under the
1940 Act do not permit negotiation of sales charges. Therefore, the fund
currently is not able to negotiate the level of the sales charges at which it
will purchase shares of load funds. In some cases, the sales load may be as
great as 8.5% of the public offering price (or 9.29% of the net amount
invested). Nevertheless, when appropriate, the fund will purchase such shares
pursuant to

(a) letters of intent, permitting it to obtain reduced or no sales charges
by aggregating its intended purchases over time (generally 13 months
from the initial purchase under the letter);
(b) rights of accumulation, permitting it to obtain reduced or no sales
charges as it purchases additional shares of an underlying fund; and
(c) the right to obtain reduced or no sales charges by aggregating its
purchases of several funds within a family of mutual funds.

As an operational policy, the fund invests substantially all of its assets in
international funds. To the extent that the fund's assets are invested in
underlying funds, its investment experience will correspond directly with that
of its proportionate investment in those funds. This strategy also involves
certain additional expenses and certain tax results that would not be present in
a direct investment in mutual funds. Federal law imposes certain limits on the
purchases of mutual fund shares by the fund. The fund may purchase shares of
no-load funds available without a transaction fee and shares of mutual funds
that charge sales loads and/or pay their own distribution expenses. Each
underlying fund provides a prospectus and other disclosure documents to the
fund. These documents are also available to fund shareholders directly from the
underlying fund.

The adviser will attempt to identify and select a varied portfolio of
international equity funds which represents the greatest long-term capital
growth potential based on the investment adviser's analysis of many factors. The
selection of international equity funds may include international equity funds
that invest primarily in emerging markets or focus their investments on
geographic regions (provided they invest in at least three countries other than
the United States). Underlying funds may also concentrate their investments in
single industry.

If an underlying fund maintains its assets abroad, its board of directors must
consider at least annually whether maintaining the underlying fund's assets with
custodians in foreign countries is consistent with the best interests of the
underlying fund and its shareholders. The underlying fund's board of directors
also must consider the degree of risk involved through the holding of portfolio
securities in domestic and foreign securities depositories. However, in the
absence of willful misfeasance, bad faith or gross negligence, any losses
resulting from the holding of an underlying fund's portfolio securities in
foreign countries and/or with foreign custodians or securities depositories will
be at the risk of shareholders, unless the losses are insured. No assurance can
be given that the underlying fund's board of directors' appraisal of the risks
will always be correct or that such exchange control restrictions or political
acts of foreign governments might not occur.

Securities that are acquired by an underlying fund outside the United States and
that are publicly traded in the United States on a foreign securities exchange
or in a foreign securities market are not considered by the underlying fund to
be illiquid assets provided that:

(i) the underlying fund acquires and holds the securities with the
intention of reselling the securities in the foreign trading
market,
(ii) the underlying fund reasonably believes it can readily dispose of
the securities in the foreign trading market or for cash in the
United States, or
(iii) foreign market and current market quotations are readily available.

Investments may be in securities of foreign issuers, whether located in
developed or undeveloped countries. Investments in foreign securities where
delivery takes place outside the United States will have to be made in
compliance with any applicable U.S. and foreign currency restrictions and tax
laws (including laws imposing withholding taxes on any dividend or interest
income) and laws limiting the amount and types of foreign investments. Changes
of government administrations or economic or monetary policies in the United
States or abroad, or changed circumstances regarding convertibility or exchange
rates, could result in investment losses for the underlying fund.

The following is a description of the securities in which the underlying funds
may invest. Although many of the underlying funds may have the same or similar
investment policies as the fund, they are not required to do so.

SECURITIES OF FOREIGN ISSUERS

An underlying fund may invest up to 100% of its total assets in the equity
securities of foreign issuers, including international stocks. Foreign
companies around the world (excluding the United States) issue
international stocks. Investing in non-U.S. securities carries substantial
risks in addition to those associated with domestic investments.

An underlying fund may also invest in equity or debt securities of foreign
issuers traded on the New York or American Stock Exchanges or in the over-
the-counter market in the form of sponsored or unsponsored American
Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs"), and
European Depositary Receipts ("EDRs") (collectively, "Depositary
Receipts").

The fund's investment approach of investing, through underlying funds, in
foreign securities is based on the premise that investing in non-U.S.
securities provides three potential benefits over investing solely in U.S.
securities:

1. the opportunity to invest in foreign issuers believed to have superior
growth potential;
2. the opportunity to invest in foreign countries with economic policies
or business cycles different from those of the U.S.; and
3. the opportunity to reduce portfolio volatility to the extent that
securities markets inside and outside the U.S. do not move in harmony.

The underlying funds in which the fund invests may also take advantage of
the unusual opportunities for higher returns available from investing in
developing or emerging market countries. Underlying funds may invest
without limit in emerging market countries. A developing or emerging
market country generally is considered to be in the initial stages of
industrialization. Furthermore, the adviser considers emerging market
countries to be all countries considered by the International Bank for
Reconstruction and Development (more commonly known as the World Bank) and
the International Finance Corporation, as well as countries that are
classified by the United Nations or otherwise regarded by their
authorities, as developing. Investments in developing countries are more
volatile and risky than investments in developed countries.

To the extent that the fund invests in underlying funds that invest
primarily in the securities of a single country, any political, economic or
regulatory developments affecting the value of the securities in the
underlying 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 the securities of more countries.

The economies of foreign countries may differ from the U.S. economy in such
respects as growth of gross domestic product, rate of inflation, currency
depreciation, capital reinvestment, resource self-sufficiency and balance
of payments position. Further, the economies of developing countries
generally are heavily dependent on international trade and, accordingly,
have been, and may continue to be, adversely affected by trade barriers,
exchange controls, managed adjustments in relative currency values and
other protectionist measures imposed or negotiated by the countries with
which they trade. These economies also have been, and may continue to be,
adversely affected by economic conditions in the countries with which they
trade.

Prior governmental approval for foreign investments may be required under
certain circumstances in some countries, or in issuers or industries deemed
sensitive to national interests, and the extent of foreign investment in
certain debt securities and domestic companies may be subject to
limitation. The charters of individual companies may also impose foreign
ownership to prevent, among other concerns, violation of foreign investment
limitations.

Repatriation of investment income, capital and the proceeds of sales by
foreign investors may require governmental registration and/or approval in
some countries. Delays in, or a refusal to grant, any required
governmental registration or approval for such repatriation could adversely
affect an underlying fund. Any investment subject to such repatriation
controls will be considered illiquid if it appears reasonably likely that
this process will take more than seven days.

With respect to any foreign country, there is the possibility of
nationalization, expropriation or confiscatory taxation, political changes,
governmental regulation, social instability or diplomatic developments
(including war) which could affect adversely the economies of such
countries or the value of the investments in those countries.

Brokerage commissions, custodial services and other costs relating to
foreign investment may be more expensive than in the United States.
Foreign markets may have different clearance and settlement procedures and
in certain markets there have been times when settlements have been unable
to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. The inability of an underlying
fund to make intended security purchases due to settlement problems could
cause an underlying fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security due to settlement problems
could result either in losses due to subsequent declines in value of the
portfolio security or, if an underlying fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.

Other differences between foreign and U.S. companies include:

O less publicly available information about foreign companies;
O the lack of uniform accounting, auditing and financial reporting standards
and practices or regulatory requirements comparable to those applicable to
U.S. companies;
O less readily available market quotations on foreign companies;
O differences in government regulation and supervision of foreign stock
exchanges, brokers, listed companies, and banks;
O differences in legal systems which may affect the ability to enforce
contractual obligations or obtain court judgments;
O the limited size of many foreign securities markets and limited trading
volume in issuers compared to the volume of trading in U.S. securities, which
could cause prices to be erratic for reasons apart from factors that affect
the quality of securities;
O the likelihood that foreign securities may be less liquid or more volatile;
O unreliable mail service between countries;
O political or financial changes which adversely affect investments in some
countries;
O the possibility that certain markets may require payment for securities
before delivery; and
O religious and ethnic instability.

In the past, U.S. government policies have discouraged or restricted
certain investments abroad by investors. Investors are advised that when
such policies are instituted, the fund will abide by them, and the fund
anticipates compliance by the underlying funds.

DEPOSITARY RECEIPTS

ADRs are receipts typically issued by an American bank or trust company
that evidences ownership of underlying securities issued by a foreign
issuer. ADRs may not necessarily be denominated in the same currency as
the securities into which they may be converted. Generally, ADRs, in
registered form, are designed for use in U.S. securities markets. Foreign
banks or trust companies typically issue EDRs and GDRs, although U.S. banks
or trust companies also may issue them, and evidence ownership of
underlying securities issued by either a foreign or a U.S. corporation.
Generally, Depositary Receipts in registered form are designed for use in
the U.S. securities market and Depositary Receipts in bearer form are
designed for use in securities markets outside the United States.
Depositary Receipts may not necessarily be denominated in the same currency
as the underlying securities into which they may be converted.

Depositary Receipts may be available for investment through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by
the issuer of the security underlying the receipt and a depositary, whereas
an unsponsored facility may be established by a depositary without
participation by the issuer of the receipt's underlying security. Holders
of an unsponsored Depositary Receipt generally bear all the costs of the
unsponsored facility. The depositary of an unsponsored facility frequently
is under no obligation to distribute shareholder communications received
from the issuer of the deposited security or to pass through to the holders
of the receipts voting rights with respect to the deposited securities.
Ownership of unsponsored Depositary Receipts may not entitle the underlying
funds to financial or other reports from the issuer of the underlying
security, to which they would be entitled as the owner of sponsored
Depositary Receipts.

EMERGING MARKETS

Generally included in emerging markets are all countries in the world
except Australia, Canada, Japan, New Zealand, the United States and most
western European countries. The risks of investing in developing or
emerging markets are similar to, but greater than, the risks of investing
in the securities of developed international markets since emerging or
developing markets tend to have economic structures that are less diverse
and mature, and political systems that are less stable, than developed
countries.

In certain emerging market countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers
and listed companies than in the United States. The economies of emerging
market countries may be predominantly based on a few industries and may be
highly vulnerable to change in local or global trade conditions. The
securities markets of many of these countries also may be smaller, less
liquid and subject to greater price volatility than those in the United
States. Some emerging market countries also may have fixed or managed
currencies which are not free-floating against the U.S. dollar. Further,
certain emerging market country currencies may not be internationally
traded. Certain of these currencies have experienced a steady devaluation
relative to the U.S. dollar. Any devaluation in the currencies in which
portfolio securities are denominated may have an adverse impact on the
underlying funds. Finally, many emerging market countries have experienced
substantial, and in some periods, extremely high, rates of inflation for
many years. Inflation and rapid fluctuations in inflation rates have had,
and may continue to have, negative effects on the economies for individual
emerging market countries. Moreover, the economies of individual emerging
market countries may differ favorably or unfavorably from the U.S. economy
in such respects as the rate of growth of domestic product, inflation,
capital reinvestment, resource self-sufficiency and balance of payments
position.

FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions may be used by underlying funds to obtain the
necessary currencies to settle securities transactions. Currency
transactions may be conducted either on a spot or cash basis at prevailing
rates or through forward foreign currency exchange contracts.

Foreign currency transactions also may be used to protect assets against
adverse changes in foreign currency exchange rates or exchange control
regulations. Such changes could unfavorably affect the value of assets
that are denominated in foreign currencies, such as foreign securities or
funds deposited in foreign banks, as measured in U.S. dollars. Although
foreign currency exchanges may be used to protect against a decline in the
value of one or more currencies, such efforts may also limit any potential
gain that might result from a relative increase in the value of such
currencies and might, in certain cases, result in losses. Further, an
underlying fund may be affected either unfavorably or favorably by
fluctuations in the relative rates of exchange between the currencies of
different nations. Cross-hedging transactions involve the risk of
imperfect correlation between changes in the values of the currencies to
which such transactions relate and changes in the value of the currency or
other asset or liability that is the subject of the hedge.

In order to hedge against foreign currency exchange rate risks, an
underlying fund may enter into forward foreign currency exchange contracts
and foreign currency futures contracts, as well as purchase put or call
options on foreign currencies, as described below. The underlying fund may
also conduct its foreign currency exchange transactions on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange
market.

An underlying fund may enter into forward foreign currency exchange
contracts ("forward contracts") to attempt to minimize the risk to the
underlying fund from adverse changes in the relationship between the U.S.
dollar and foreign currencies. A forward contract is an obligation to
purchase or sell a specific currency for an agreed price at a future date,
which is individually negotiated and privately traded by currency traders
and their customers. An underlying fund may enter into a forward contract,
for example, when it enters into a contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in" the U.S.
dollar price of the security. In addition, for example, when the
underlying fund believes that a foreign currency may suffer a substantial
decline against the U.S. dollar, it may enter into a forward contract to
sell an amount of that foreign currency approximating the value of some or
all of the underlying fund's portfolio securities denominated in such
foreign currency, or when the underlying fund believes that the U.S. dollar
may suffer a substantial decline against a foreign currency, it may enter
into a forward contract to buy that foreign currency for a fixed dollar
amount.

This second investment practice is generally referred to as "cross-
hedging." Because in connection with the underlying fund's forward foreign
currency transactions an amount of the underlying fund's assets equal to
the amount of the purchase will be held aside or segregated to be used to
pay for the commitment, the underlying fund will always have cash, cash
equivalents or high quality debt securities available sufficient to cover
any commitments under these contracts or to limit any potential risk. The
segregated account will be marked to market on a daily basis. While these
contracts are not presently regulated by the Commodities Futures Trading
Commission ("CFTC"), the CFTC may in the future assert authority to
regulate forward contracts. In such event, the underlying fund's ability
to utilize forward contracts in the manner set forth above may be
restricted. Forward contracts may limit potential gain from a positive
change in the relationship between the U.S. dollar and foreign currencies.
Unanticipated changes in currency prices may result in poorer overall
performance for the underlying fund than if it had not engaged in such
contracts.

An underlying fund may purchase and write put and call options on foreign
currencies for the purpose of protecting against declines in the dollar
value of foreign portfolio securities and against increases in the dollar
cost of foreign securities to be acquired. As is the case with other kinds
of options, however, the writing of an option on foreign currency will
constitute only a partial hedge, up to the amount of the premium received,
and the underlying fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses.
The purchase of an option on foreign currency may constitute an effective
hedge against fluctuation in exchange rates, although, in the event of rate
movements adverse to the underlying fund's position, the underlying fund
may forfeit the entire amount of the premium plus related transaction
costs. Options on foreign currencies to be written or purchased by the
underlying fund will be traded on U.S. and foreign exchanges or over-the-
counter.

An underlying fund may enter into exchange-traded contracts for the
purchase or sale for future delivery of foreign currencies ("foreign
currency futures"). This investment technique will be used only to hedge
against anticipated future changes in exchange rates which otherwise might
adversely affect the value of the underlying fund's portfolio securities or
adversely affect the prices of securities that the underlying fund intends
to purchase at a later date. The successful use of foreign currency
futures will usually depend on the ability of the underlying fund's
investment adviser to forecast currency exchange rate movements correctly.
Should exchange rates move in an unexpected manner, the underlying fund may
not achieve the anticipated benefits of foreign currency futures or may
realize losses.

FORWARD COMMITMENTS

Forward commitments are contracts to purchase securities for a fixed price
at a date beyond customary settlement time. An underlying fund may enter
into these contracts if liquid securities in amounts sufficient to meet the
purchase price are segregated on the underlying fund's records at the trade
date and maintained until the transaction has been settled. Risk is
involved if the value of the security declines before settlement. Although
an underlying fund may enter into forward commitments with the intention of
acquiring the security, it may dispose of the commitment prior to
settlement and realize a short-term profit or loss.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES

A forward foreign currency exchange contract ("forward contract") is an
obligation to purchase or sell an amount of a particular currency at a
specific price and on a future date agreed upon by the parties.

Generally, no commission charges or deposits are involved. At the time an
underlying fund enters into a forward contract, the underlying fund assets
with a value equal to the underlying fund's obligation under the forward
contract are segregated on the underlying fund's records and are maintained
until the contract has been settled. An underlying fund will not enter
into a forward contract with a term of more than one year. An underlying
fund will generally enter into a forward contract to provide the proper
currency to settle a securities transaction at the time the transaction
occurs ("trade date"). The period between the trade date and settlement
date will vary between 24 hours and 30 days, depending upon local custom.

An underlying fund may also protect against the decline of a particular
foreign currency by entering into a forward contract to sell an amount of
that currency approximating the value of all or a portion of the assets
denominated in that currency ("hedging"). The success of this type of
short-term hedging strategy is highly uncertain due to the difficulties of
predicting short-term currency market movements and of precisely matching
forward contract amounts and the constantly changing value of the
securities involved. The adviser believes, however, that it is important
that an underlying fund be able to enter into forward contracts when the
best interests of the underlying fund will be served.

An underlying fund may purchase and write put and call options on foreign
currencies for the purpose of protecting against declines in the U.S.
dollar value of foreign currency-denominated portfolio securities and
against increases in the U.S. dollar cost of such securities to be
acquired. As in the case of other kinds of options, however, the writing
of an option on a foreign currency constitutes only a partial hedge, up to
the amount of the premium received, and the underlying fund could be
required to purchase or sell foreign currencies at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to the underlying
fund's position, the underlying fund may forfeit the entire amount of the
premium plus related transaction costs. Options on foreign currencies to
be written or purchased by the underlying fund are traded on U.S. and
foreign exchanges or over-the-counter.

CURRENCY RISKS

Because an underlying fund may purchase securities denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates could affect such underlying fund's net asset value, the value of
interest earned, gains and losses realized on the sale of securities, and
net investment income and capital gain, if any, to be distributed to
shareholders by such underlying fund. If the value of a foreign currency
rises against the U.S. dollar, the value of an underlying fund's assets
denominated in that currency will increase; correspondingly, if the value
of a foreign currency declines against the U.S. dollar, the value of
underlying fund assets denominated in that currency will decrease.

The exchange rates between the U.S. dollar and foreign currencies are a
function of such factors as supply and demand in the currency exchange
markets, international balances of payments, governmental interpretation,
speculation and other economic and political conditions. Although the
underlying funds value their assets daily in U.S. dollars, the underlying
funds will not convert their holdings of foreign currencies to U.S. dollars
daily. When an underlying fund converts its holdings to another currency,
it may incur conversion costs. Foreign exchange dealers may realize a
profit on the difference between the price at which they buy and sell
currencies.

SWAP AGREEMENTS

As one way of managing its exposure to different types of investments, the
underlying funds may enter into interest rate swaps, currency swaps and
other types of swap agreements such as caps, collars and floors. Depending
on how they are used, swap agreements may increase or decrease the overall
volatility of an underlying fund's investments, its share price and yield.

Swap agreements are sophisticated instruments that typically involve a
small investment of cash relative to the magnitude of risks assumed. As a
result, swaps can be highly volatile and may have a considerable impact on
an underlying fund's performance. Swap agreements are subject to risks
related to the counterparty's ability to perform, and may decline in value
if the counterparty's creditworthiness deteriorates. An underlying fund
may also suffer losses if it is unable to terminate outstanding swap
agreements to reduce its exposure through offsetting transactions. When an
underlying fund enters into a swap agreement, assets of the underlying fund
equal to the value of the swap agreement will be segregated by the
underlying fund.

Among the hedging strategies into which an underlying fund may enter are
interest rate, currency and index swaps and the purchase or sale of related
caps, floors and collars. The underlying fund expects to enter into these
transactions primarily to preserve a return or spread on a particular
investment or portion of its portfolio, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities the underlying fund anticipates
purchasing at a later date. The underlying fund intends to use these
transactions as hedges and not as speculative investments and will not sell
interest rate caps or floors where it does not own securities or other
instruments providing the income stream the underlying fund may be
obligated to pay. Interest rate swaps involve the exchange by the
underlying fund with another party of their respective commitments to pay
or receive interest, e.g., an exchange of floating rate payments for fixed
rate payments with respect to a notional amount of principal. A currency
swap is an agreement to exchange cash flows on a notional amount of two or
more currencies based on the relative value differential among them and an
index swap is an agreement to swap cash flows on a notional amount based on
changes in the values of the reference indices. The purchase of a cap
entitles the purchaser to receive payments on a notional principal amount
from the party selling such cap to the extent that a specified index
exceeds a predetermined interest rate or amount. The purchase of a floor
entitles the purchaser to receive payments on a notional principal amount
from the party selling such floor to the extent that a specified index
falls below a predetermined interest rate or amount. A collar is a
combination of a cap and a floor that preserves a certain return within a
predetermined range of interest rates or values.

An underlying fund will usually enter into swaps on a net basis, i.e., the
two payment streams are netted out in a cash settlement on the payment date
or dates specified in the instrument, with the underlying fund receiving or
paying, as the case may be, only the net amount of the two payments.
Inasmuch as these swaps, caps, floors, and collars are entered into for
good faith hedging purposes, the underlying fund's investment adviser and
the underlying fund believe such obligations do not constitute senior
securities under the 1940 Act, and, accordingly, will not treat them as
being subject to its borrowing restrictions. There is no minimal
acceptable rating for a swap, cap, floor or collar to be purchased or held
in an underlying fund's portfolio. If there is a default by the
counterparty, the underlying fund may have contractual remedies pursuant to
the agreements related to the transaction. The swap market has grown
substantially in recent years with a large number of banks and investment
banking firms acting both as principals and agents utilizing standardized
swap documentation. As a result, the swap market has become relatively
liquid. Caps, floors and collars are more recent innovations for which
standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.

HIGH YIELD SECURITIES

The underlying funds may invest 35% or more of their respective assets in
debt securities which are not considered investment grade bonds (commonly
referred to as "junk bonds") by an NRSRO, such as Moody's Investor's
Service, Inc. or Standard & Poor's. There is no minimal acceptable rating
for a security to be purchased or held in the underlying funds, and the
underlying funds may, from time to time, purchase or hold securities in the
lowest rating category. Debt obligations that are not determined to be
investment grade are high-yield, high-risk bonds, typically subject to
greater market fluctuations and greater risk of loss of income and
principal due to an issuer's default. To a greater extent than investment
grade bonds, lower rated bonds tend to reflect short-term corporate,
economic, and market developments, as well as investor perceptions of the
issuer's credit quality. In addition, lower rated bonds may be more
difficult to dispose of or to value than higher rated, lower-yielding
bonds. (Underlying funds that invest 35% or more of their respective
assets in junk bonds are not considered international equity funds).

VARIABLE RATE DEMAND NOTES

The underlying funds may purchase variable rate demand notes. Variable
rate demand notes are long-term debt instruments that have variable or
floating interest rates and provide an underlying 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 a published interest rate or interest rate index.
Many variable rate demand notes allow an underlying fund to demand the
repurchase of the security on not more than seven days' prior notice.
Other notes only permit an underlying fund to tender the security at the
time of each interest rate adjustment or at other fixed intervals. The
underlying funds treat variable rate demand notes as maturing on the later
of the date of the next interest rate adjustment or the date on which the
underlying fund may next tender the security for repurchase.

CREDIT FACILITIES

An underlying fund may purchase demand notes, which are borrowing
arrangements between a corporation and an institutional lender (such as an
underlying 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.

Revolving credit facilities are borrowing arrangements in which the lender
agrees to make loans up to a maximum amount upon demand by the borrower
during a specified term. As the borrower repays the loan, an amount equal
to the repayment may be borrowed again during the term of the facility. An
underlying fund generally acquires a participation interest in a revolving
credit facility from a bank or other financial institution. The terms of
the participation require the underlying fund to make a pro rata share of
all loans extended to the borrower and entitles the underlying fund to a
pro rata share of all payments made by the borrower. Demand notes and
revolving credit facilities usually provide for floating or variable rates
of interest.

DIVERSIFICATION

With respect to 75% of the value of total assets, the fund will not invest
more than 5% in securities of any one issuer, other than cash, cash items,
or securities issued or guaranteed by the government of the United States
or its agencies or instrumentalities and repurchase agreements
collateralized by U.S. government securities and securities of other
investment companies, or acquire more than 10% of the outstanding voting
securities of any one issuer (for which purposes all indebtedness of an
issuer shall be deemed a single class and all preferred stock of an issuer
shall be deemed a single class, except that futures or option contracts and
securities of mutual funds shall not be subject to this restriction).

NON-DIVERSIFICATION

Some of the underlying funds in which the fund invests may be non-
diversified investment companies. As such, there is no 1940 Act limit on
the percentage of assets that can be invested in any single issuer. An
investment in such underlying funds, therefore, will entail greater risks
than would exist in diversified investment companies because the higher
percentage of investments among fewer issuers may result in greater
fluctuation in the total market value of the underlying fund's portfolio.
Any economic, political, or regulatory developments affecting the value of
the securities of such issuer held by the underlying fund will have a
greater impact on the total value of the underlying fund's portfolio than
would be the case if the fund were diversified among more issuers.

However, it is anticipated that the underlying funds will comply with
Subchapter M of the Internal Revenue Code. This requires that at the end
of each quarter of the taxable year, the aggregate value of all investments
in any one issuer (except U.S. government obligations, cash, cash items and
other investment companies) which exceed 5% of an underlying fund's total
assets shall not exceed 50% of the value of its total assets, and, with
respect to the remaining assets, no more than 25% of an underlying fund's
assets shall be invested in a single issuer.

INDUSTRY CONCENTRATION

Underlying funds may concentrate their investments in one industry.
Because the scope of investment alternatives within an industry is limited,
the value of the shares of such an underlying fund may be subject to
greater market fluctuation than an investment in a fund that invests in a
broader range of securities.

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 FUNDS' INVESTMENT LIMITATIONS

The following is a list of the Funds' investment limitations, which cannot be
changed without the approval of a majority of a Fund's outstanding voting
securities. As used in this SAI, "a majority of a fund's outstanding voting
securities" means the lesser of (1) 67% of the shares of common stock of the
Fund represented at a meeting at which more than 50% of the outstanding shares
are present, or (2) more than 50% of the outstanding shares of common stock of
the Fund.

SELLING SHORT

None of the Funds, except the STRATEGIC INCOME FUND will sell any securities
short. The STRATEGIC INCOME FUND will not sell securities short unless: (1)
it owns, or has a right to acquire, an equal amount of such securities or (2)
if it does not own the securities, it has segregated an amount of its other
assets equal to the lesser of the market value of the securities sold short
or the amount required to acquire such securities. While in a short
position, the STRATEGIC INCOME FUND will retain the securities, rights, or
segregated assets.

The underlying funds of the INTERNATIONAL EQUITY FUND may engage in short
selling transactions.

BUYING ON MARGIN

None of the Funds will purchase any securities on margin, but they may obtain
such short-term credits as may be necessary for clearance of purchases and
sales of portfolio securities. Regarding the STRATEGIC INCOME FUND, U.S.
GOVERNMENT INCOME FUND, INSURED TAX-FREE BOND FUND, GROWTH EQUITY FUND and
CAPITAL APPRECIATION FUND, the deposit or payment by the Funds 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

None of the Funds will issue senior securities, except that each fund may
borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amount borrowed.
The STELLAR FUND will not issue senior securities, except as permitted by its
investment objective and policies. The CAPITAL APPRECIATION FUND and GROWTH
EQUITY FUND will issue senior securities to the extent that the funds may
enter into futures contracts. The INSURED TAX-FREE BOND FUND will not issue
senior securities except for when-issued and delayed-delivery transactions
and futures contracts, each of which might be considered senior securities.
In addition, the INSURED TAX-FREE BOND FUND reserves the right to purchase
municipal securities, which the it has the right or obligation to sell to a
third party (including the issuer of a participation interest).

BORROWING MONEY

Except as described in their respective prospectuses, none of the Funds,
except the STRATEGIC INCOME FUND and INSURED TAX-FREE BOND FUND, will borrow
money or engage in reverse repurchase agreements for investment leverage.
However, each fund may borrow money up to one-third of its value of their
total assets as a temporary, extraordinary, or emergency measure or to
facilitate management of the fund by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. Interest paid on borrowed funds will serve
to reduce the fund's income. A fund will not purchase any securities while
borrowings and reverse repurchase agreements in excess of 5% of its total
assets are outstanding. During the period any reverse repurchase agreements
are outstanding, the Funds will restrict the purchase of portfolio securities
to money market instruments maturing on or before the expiration date of the
reverse repurchase agreements, but only to the extent necessary to assure
completion of the reverse repurchase agreements. The underlying funds of the
INTERNATIONAL EQUITY FUND may borrow money.

The STRATEGIC INCOME FUND may borrow money directly or through reverse
repurchase agreements in amounts up to one-third of the value of its total
assets, including the amount borrowed, either

(a) as a temporary, extraordinary, or emergency measure or to facilitate
management of the STRATEGIC INCOME FUND by enabling the fund to meet
redemption requests when the liquidation of portfolio securities is
deemed to be inconvenient or disadvantageous, or
(b) for investment purposes.

The STRATEGIC INCOME FUND will not purchase any securities for the purpose
stated under clause (i) above while any borrowings in excess of 5% of its
total assets are outstanding.

PLEDGING ASSETS

The Funds will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, they may mortgage, pledge, or
hypothecate assets having a market value not exceeding 10% (15% for the
TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND) of the value
of total assets at the time of the pledge.

Regarding the STRATEGIC INCOME FUND, GROWTH EQUITY FUND and CAPITAL
APPRECIATION FUND, the following will not be deemed to be pledges of the
funds' assets:

(a) the deposit of assets in escrow in connection with the writing of covered
put or call options and the purchase of securities on a when-issued
basis; and
(b) collateral arrangements with respect to (i) the purchase and sale of
stock options (and options on stock indices) and (ii) initial or
variation margin for futures contracts.

Margin deposits for the purchase and sale of futures contracts and related
options are not deemed to be a pledge.

Regarding the U.S. GOVERNMENT INCOME FUND and INSURED TAX-FREE BOND FUND,
margin deposits for the purchase and sale of futures contracts and related
options and segregation or collateral arrangements made in connection with
options activities or the purchase of securities on a when-issued basis are
not deemed to be a pledge.

DIVERSIFICATION OF INVESTMENTS

With respect to securities comprising 75% of the value of their respective
total assets, the TAX-FREE MONEY MARKET FUND, STRATEGIC INCOME FUND, U.S.
GOVERNMENT INCOME FUND, GROWTH EQUITY FUND, STELLAR FUND, CAPITAL
APPRECIATION FUND and INTERNATIONAL EQUITY FUND will not purchase securities
issued by any one issuer (other than cash, cash items, or securities issued
or guaranteed by the U.S. government, its agencies or instrumentalities, and
repurchase agreements collateralized by such securities and securities of
other investment companies) if, as a result, more than 5% of the value of
their respective total assets would be invested in the securities of that
issuer. The funds will not acquire more than 10% of the outstanding voting
securities of any one issuer.

The RELATIVE VALUE FUND and the STELLAR FUND will not invest more than 5% of
their respective total assets in the securities of any one issuer, except in
cash or cash investments, securities guaranteed by the U.S. government, its
agencies or instrumentalities and repurchase agreements collateralized by
such securities. In addition, the STELLAR FUND will not purchase more than
10% of any class of voting securities of any one issuer.

CONCENTRATION OF INVESTMENTS

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND, RELATIVE VALUE FUND, STELLAR
FUND, CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND will not invest
25% or more of the value of their respective total assets in any one industry
(other than investment companies and securities issued by the U.S.
government, its agencies or instrumentalities).

The INSURED TAX-FREE 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, 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 more than
25% of the value of its assets in cash or certain money market instruments,
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 does not intend to purchase
securities (other than securities guaranteed by the U.S. government or its
agencies or direct obligations of the U.S. government) if, as a result of
such purchases, 25% or more of the value of its total assets would be
invested in a governmental subdivision in any one state, territory or
possession of the United States.

UNDERWRITING

The Funds 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.

INVESTING IN REAL ESTATE

The Funds will not purchase or sell real estate, including limited
partnership interests. However, they may invest in the securities of
companies whose business involves the purchase or sale of real estate or in
securities that are secured by real estate or interests in real estate.

INVESTING IN COMMODITIES

The Funds will not purchase or sell commodities, commodity contracts, or
commodity futures contracts. However the STRATEGIC INCOME FUND, U.S.
GOVERNMENT INCOME FUND, INSURED TAX-FREE BOND FUND, GROWTH EQUITY FUND,
CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND may engage in
transactions involving futures contracts or options on futures contracts.

INVESTING IN MINERALS

The INSURED TAX-FREE BOND FUND, RELATIVE VALUE FUND and STELLAR FUND will not
purchase or sell oil, gas, or other mineral exploration or development
programs or leases, except that INSURED TAX-FREE BOND FUND may purchase and
sell futures contracts. The STELLAR FUND may purchase or sell certain
precious metal securities described in the prospectus.

LENDING CASH OR SECURITIES

The TREASURY FUND will not lend any of its assets, except that it may
purchase or hold U.S. Treasury obligations, including repurchase agreements.

The TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND will not
lend any of their assets, except portfolio securities. This shall not
prevent the funds from purchasing or holding bonds, debentures, notes,
certificates of indebtedness or other debt securities, entering into
repurchase agreements or engaging in other transactions where permitted by
their investment objectives, policies, and limitations or the Declaration of
Trust.

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND,
CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND will not lend any of
their respective assets, except portfolio securities up to one-third of the
value of their respective total assets. This shall not prevent the funds
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 a
fund's investment objectives, policies, and limitations or the Trust's
Declaration of Trust.

The INSURED TAX-FREE BOND FUND will not lend any of its assets. This shall
not prevent the fund from acquiring publicly or non-publicly issued municipal
securities or temporary investments, entering into repurchase agreements, or
engaging in other transactions in accordance with its investment objective,
policies, and limitations or the Declaration of Trust.

The RELATIVE VALUE FUND and STELLAR FUND will not lend any of their assets,
except that they may purchase or hold corporate or government bonds,
debentures, notes, certificates of indebtedness or other debt securities
permitted by they investment objective and policies.

INVESTING IN RESTRICTED SECURITIES

The INSURED TAX-FREE BOND FUND will not invest more than 15% of the value of
its net assets in securities subject to restrictions on resale under the
Securities Act of 1933.

The TAX-FREE MONEY MARKET FUND, OHIO TAX-FREE MONEY MARKET FUND, RELATIVE
VALUE FUND and STELLAR FUND will not invest more than 10% of the value of
their net assets in securities subject to restrictions on resale under the
Securities Act of 1933 except for certain other restricted securities which
meet the criteria for liquidity as established by the Trustees. The RELATIVE
VALUE FUND and STELLAR FUND may invest in commercial paper issued under
Section 4(2) of the Securities Act of 1933.

DEALING IN PUTS AND CALLS

The INSURED TAX-FREE BOND FUND, RELATIVE VALUE FUND and STELLAR FUND will not
purchase or sell puts, calls, spreads or any combination of them except as
permitted by its investment policies. However, the INSURED TAX-FREE BOND
FUND may purchase put options on municipal securities in an amount up to 5%
of its total assets and may purchase municipal securities accompanied by
agreements of sellers to repurchase them at the fund's option.

PURCHASING SECURITIES TO EXERCISE CONTROL

The RELATIVE VALUE FUND and STELLAR FUND will not purchase securities of a
company for the purpose of exercising control or management. However, each
fund may acquire up to 10% of the voting securities of an issuer and may
exercise its voting power in the funds' best interest. From time to time,
the funds, together with other investment companies advised by affiliates or
subsidiaries of Firstar Bank, N.A., may together buy and hold substantial
amounts of a company's voting stock. All such stock may be voted together.
In some cases, the funds and the other investment companies may collectively
be considered to be in control of the company in which they have invested.
Officers or affiliates of the funds may possibly become directors of
companies in which the funds hold stock.

INVESTING IN NEW ISSUERS

The RELATIVE VALUE FUND and STELLAR FUND will not invest more than 5% of the
value of their total assets in securities of issuers with records of less
than three years of continuous operations, including the operation of any
predecessor.

INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF THE
TRUST

The RELATIVE VALUE FUND and STELLAR FUND will not purchase or retain the
securities of any issuer if the officers and Trustees of the Trust or the
adviser together own more than 5% of the issuer's securities.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The RELATIVE VALUE FUND and STELLAR FUND may purchase securities of other
investment companies.

The STELLAR FUND will limit its investment in other investment companies to:

O no more than 3% of the total outstanding voting stock of any investment
company,
O no more than 5% of their total assets in any one investment company,
O no more than 10% of their total assets in investment companies in general.

The fund will not purchase or acquire any security issued by a registered
closed-end investment company if immediately after the purchase or
acquisition 10% or more of the voting securities of the closed-end
investment company would be owned by the fund and other investment companies
having the same adviser and companies controlled by these investment
companies. The fund will purchase securities of closed-end investment
companies only in open market transactions involving only customary broker's
commissions. However, these limitations are not applicable if the
securities are acquired in a merger, consolidation, reorganization, or
acquisition of assets. It should be noted that investment companies incur
certain expenses, such as management fees, and, therefore, any investment by
the fund in these securities would be subject to duplicate expenses.

The RELATIVE VALUE FUND will not purchase securities of other investment
companies, except:

O by purchase in the open market involving only customary brokerage
commissions; or
O as part of a merger, consolidation, reorganization, or other
acquisition.

The Trustees may change the following investment limitations without shareholder
approval. Shareholders will be notified before any material change in these
limitations becomes effective.

INVESTING IN ILLIQUID AND RESTRICTED SECURITIES

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND,
RELATIVE VALUE FUND, STELLAR FUND, CAPITAL APPRECIATION and INTERNATIONAL
EQUITY FUND will not invest more than 15% of the value of their respective
net assets in illiquid securities, including repurchase agreements providing
for settlement in more than seven days after notice, non-negotiable fixed
time deposits with maturities over seven days, over-the-counter options and
certain restricted securities not determined by the Trustees to be liquid.

The INSURED TAX-FREE BOND 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 in more than seven days after notice, certain restricted
securities not determined by the Trustees to be liquid, and participation
interests and variable rate municipal securities without a demand feature or
with a demand feature of longer than seven days and which the fund's
investment adviser believes cannot be sold within seven days.

The TREASURY FUND, TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET
FUND will not invest more than 10% of the value of their respective net
assets in illiquid securities, including certain restricted securities not
determined to be liquid under criteria established by the Trustees and
repurchase agreements providing for settlement in more than seven days after
notice.

Under criteria established by the Board of Trustees, certain restricted
securities are considered to be liquid. The Funds will limit their purchases
of illiquid securities to 15% of their respective net assets which, include
restricted securities not determined by the Trustees to be liquid,
non-negotiable time deposits, over-the-counter options, and repurchase
agreements providing for settlement in more than 7 days after notice.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The TREASURY FUND, TAX-FREE MONEY MARKET FUND, OHIO TAX-FREE MONEY MARKET
FUND, STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, INSURED TAX-FREE
BOND FUND, GROWTH EQUITY FUND and CAPITAL APPRECIATION FUND will limit their
investment in other investment companies to:

O no more than 3% of the total outstanding voting stock of any
investment company,
O no more than 5% of their respective total assets in any one investment
company,
O no more than 10% of their respective total assets in investment
companies in general.

The TREASURY FUND, TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET
FUND will limit their investments in the securities of other investment
companies to those of money market funds having investment objectives and
policies similar to their own.

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND
and CAPITAL APPRECIATION FUND will purchase securities of investment
companies only in open-market transactions involving customary broker's
commissions. The U.S. GOVERNMENT INCOME FUND will invest in other investment
companies primarily for the purpose of investing its short-term cash on a
temporary basis. The adviser will waive its investment advisory fee on
assets invested in securities of open-end investment companies.

The INSURED TAX-FREE BOND FUND will limit its investments in the securities
of other investment companies to those having investment objectives and
policies similar to its own.

The INSURED TAX-FREE BOND FUND, TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE
MONEY MARKET FUND will not purchase or acquire any security issued by a
registered closed-end investment company if, immediately after the purchase
or acquisition, 10% or more of the voting securities of the closed-end
investment company would be owned by the fund and other investment companies
having the same adviser and companies controlled by these investment
companies. The funds will purchase securities of closed-end investment
companies only in open-market transactions involving customary broker's
commissions. The adviser will waive its investment advisory fee on assets of
the fund invested in securities of open-end investment companies.

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 may incur certain expenses that may be
duplicative of certain fees incurred by the funds.

PURCHASING SECURITIES TO EXERCISE CONTROL

The STRATEGIC INCOME FUND, GROWTH EQUITY FUND and CAPITAL APPRECIATION FUND
will not purchase securities of a company for the purpose of exercising
control or management.

WRITING COVERED CALL OPTIONS

The STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND
and CAPITAL APPRECIATION FUND will not write call options on securities
unless the securities are held in the specific 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.

FOREIGN SECURITIES

The RELATIVE VALUE FUND will not invest more than 10% of its total assets in
securities of foreign issuers. The U.S. GOVERNMENT INCOME FUND will not
invest more than 5% of its total assets in securities of foreign issuers.

CONCENTRATION OF INVESTMENTS

The TAX-FREE MONEY MARKET FUND will not purchase securities if, as a result
of such purchase, more than 25% of the value of the fund's assets would be
invested in any one industry. 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 TAX-FREE MONEY MARKET FUND does not intend to purchase securities that
would increase the percentage of its assets invested in the securities of
governmental subdivisions located in any one state, territory or U.S.
possession to more than 25%. However, 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.

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.

The OHIO TAX-FREE MONEY MARKET FUND will not purchase securities if, as a
result of such purchase, more than 25% of the value of the fund's assets
would be invested in any one industry, industrial development bonds or other
securities, the interest upon which is paid from revenues of similar types of
projects. However, the fund may invest more than 25% of the value of its
assets in debt obligations issued by or on behalf of Ohio and its political
subdivisions and financing authorities, 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 OHIO TAX-FREE MONEY MARKET 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. 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.

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 do not expect to borrow money or pledge securities in excess of 5% of
the value of their respective total assets in the coming fiscal year.

For purposes of their policies and limitations, the consider 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."

As a matter of operating policy, which may be changed without shareholder
approval, the U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY FUND and CAPITAL
APPRECIATION FUND will limit the margin deposits on futures contract and options
entered into by a fund to 5% of its net assets.

As operating policies of the STRATEGIC INCOME FUND which may be changed without
shareholder approval:

(a) no securities will be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would
exceed 25% of the value of the fund's net assets;
(b) the fund may not sell short the securities of any single issuer listed
on a national securities exchange to the extent of more than 5% of the
value of the fund's net assets;
(c) the fund may not sell short the securities of any class of an issuer to
the extent, at the time of the transaction, of more than 5% of the
outstanding securities of that class; and
(d) the fund at no time will have more than 15% of the value of its net
assets in deposits on short sales against the box.

TEMPORARY INVESTMENTS

From time to time, the TAX-FREE MONEY MARKET FUND, OHIO TAX-FREE MONEY MARKET
FUND, INSURED TAX-FREE BOND FUND, GROWTH EQUITY FUND, RELATIVE VALUE FUND,
CAPITAL APPRECIATION FUND and INTERNATIONAL EQUITY FUND may invest in
temporary investments.

The TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND may invest
in high-quality temporary investments for temporary defensive purposes.
Occasionally, such as when suitable municipal securities are not available,
the funds may invest a portion of their assets in cash. Any portion of the
funds' assets maintained in cash reduces the amount of assets in Municipal
Securities and thereby reduce the funds' yield. This policy may result in
high portfolio turnover. Since the cost of these transactions is small, high
turnover is not expected to adversely affect net asset value or yield. The
adviser does not anticipate that portfolio turnover will result in adverse
tax consequences to the funds.

These temporary investments include:

O obligations issued by or on behalf of municipal or corporate issuers
having the same quality and maturity characteristics as Municipal
Securities purchased by the funds;
O marketable obligations issued or guaranteed by the U.S. government,
its agencies or instrumentalities; instruments issued by banks or
other depository institutions which have capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment;
O repurchase agreements; and
O prime commercial paper rated A-1 by Standard and Poor's Ratings Group
("S&P"), Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or F-
1 by Fitch Investors Services ("Fitch"), and other short-term credit
instruments.

The INSURED TAX-FREE BOND FUND may invest in temporary investments from time
to time:

O as a reaction to market conditions;
O while waiting to invest proceeds of sales of shares or portfolio
securities, although generally such proceeds from sales of shares will
be invested in municipal securities as quickly as possible;
O in anticipation of redemption requests; or
O for temporary defensive purposes, in which case the fund may invest
more than 20% of the value of its net assets in cash or certain money
market instruments, U.S. Treasury bills or securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
or repurchase agreements (see above descriptions).

The RELATIVE VALUE FUND may invest in temporary investments from time to time
for defensive purposes. The fund may invest in securities issued and/or
guaranteed as to payment of principal and interest by the U.S. government,
its agencies or instrumentalities, repurchase agreements and short-term 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; or
O commercial paper rated A-1 by Standard and Poor's Corporation, Prime-1
by Moody's Investors Service, Inc., or F-1 by Fitch Investors Service,
Inc.

For temporary defensive purposes (up to 100% of total assets) and to maintain
liquidity (up to 35% of total assets), the GROWTH EQUITY FUND, CAPITAL
APPRECIATION FUND and INTERNATIONAL EQUITY FUND may invest in U.S. and
foreign short-term money market instruments including:

O commercial paper rated A-1 or A-2 by S&P, Prime-1 or Prime-2 by
Moody's, or F-1 or F-2 by Fitch. In the case where commercial paper
has received different ratings from different rating services, such
commercial paper is acceptable so long as at least one rating is in
the two highest categories of the NRSROs described above;
O instruments of domestic and foreign banks and savings associations
(such as certificates of deposit, demand and time deposits and
bankers' acceptances) if they have capital, surplus, and undivided
profits of over $100,000,000, or if BIF or SAIF insures the principal
amount of the instrument. These instruments may include Eurodollar
Certificates of Deposit, Yankee Certificates of Deposit, and
Eurodollar Time Deposits;
O obligations of the U.S. government or its agencies or
instrumentalities;
O repurchase agreements; and
O other short-term instruments that are not rated but are determined by
the adviser to be of comparable quality to the other obligations in
which the fund may invest.

PORTFOLIO TURNOVER RATES

Although the following funds (the Bond Funds and Stock Funds) do not intend to
invest for short-term profits, securities in the funds' portfolios will be sold
whenever the adviser believes it is appropriate to do so in light of the Funds'
specific investment objectives. The adviser disregards the length of time a
particular security may have been held by the funds. Generally, a high
portfolio turnover rate results in increased transaction costs and higher taxes
paid by the funds' shareholders. In addition a high rate of portfolio turnover
may result in the realization of a larger amount of capital gains which, when
distributed to the fund's shareholders, are taxable to them. (Regarding the
INTERNATIONAL EQUITY FUND, there is no limit on the underlying funds' portfolio
turnover rates.) The table below shows the turnover rates for the funds for the
past two fiscal years.

Fiscal Year Ended
FUND NOVEMBER 30, 1997 NOVEMBER 30, 1998
The Stellar Insured Tax-Free Bond Fund 15%1<F36> 14%
U.S. Government Income Fund 140% 88%
Strategic Income Fund 142% 146%
The Stellar Fund 64% 77%
Relative Value Fund 18% 26%
Growth Equity Fund 60% 48%
Capital Appreciation Fund 262% 94%
International Equity Fund N/A 3%2<F37>

1<F36> The portfolio turnover rate is for the period from December 30, 1996
(date of initial public investment) to November 30, 1997.
2<F37> The portfolio turnover rate is for the period from December 3, 1997 (date
of initial public investment) to November 30, 1998.

MANAGEMENT OF THE FUND

The Trust is managed by a Board of Trustees. The Trust's Board of Trustees
consists of six individuals, five of whom are not "interested persons" of the
Trust as that term is defined in the 1940 Act. The Trustees are fiduciaries for
the funds' shareholders and are governed by the laws of the State of
Massachusetts in this regard. They establish policies for the operation of the
Trust and appoint the officers who conduct the daily business of the Trust.
Officers and Trustees are listed below with their addresses, birthdates, present
positions with the Trust and principal occupations.
<TABLE>
POSITION AND PRINCIPAL OCCUPATION
NAME AND ADDRESS BIRTHDATE OFFICE WITH THETRUST DURING THE PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas L. Conlan, Jr.*<F38> May 20, 1938 Trustee President and Chief Executive Officer,
c/o Firstar Corporation Student Loan Funding Resources, Inc., June
425 Walnut Street 1998 to Present; President and Chief
Cincinnati, Ohio 45202 Executive Officer, Student Loan Funding
Corporation, 1981 to June 1998; President
and Chief Executive Officer, SLFC, Inc.,
1991 to June 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred Gottschalk, Ph.D. March 7, 1930 Trustee Chancellor (January 1996 to present),
c/o Firstar Corporation Professor and President, 1971 to 1995,
425 Walnut Street Cincinnati, Ohio 45202 Hebrew Union College-Jewish Institute of
Religion.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert J. Hill, D.O. January 13, 1959 Trustee Physician, Ohio Valley Orthopaedic and
c/o Firstar Corporation Sports Medicine Institute, Inc. and
425 Walnut Street Wellington Orthopaedics, 1994 to present;
Cincinnati, Ohio 45202 Fellow Physician, Cleveland Clinic
Foundation, 1993 to 1994.
- ------------------------------------------------------------------------------------------------------------------------------------
Dawn M. Hornback September 12, 1963 Trustee Founder, President and Chief Executive
c/o Firstar Corporation Officer of Observatory Group, Inc., August
425 Walnut Street 1990 to present. Observatory Group, Inc.
Cincinnati, Ohio 45202 is a marketing communications firm
specializing in the commercial, medical
and educational fields.
- ------------------------------------------------------------------------------------------------------------------------------------
Lawrence M. Turner March 23, 1947 Trustee Vice President and Treasurer, Kroger Co.
c/o Firstar Corporation 1986 to present. The Kroger Co. operates
425 Walnut Street Cincinnati, Ohio 45202 supermarkets and convenience stores and
processes food.
- ------------------------------------------------------------------------------------------------------------------------------------
William H. Zimmer, III December 19, 1953 Trustee Executive Vice President & Chief Financial
c/o Firstar Corporation Officer, Advanced Communications Group,
425 Walnut Street Inc., December 1998 to present; Corporate
Cincinnati, Ohio 45202 Vice President, Cincinnati Bell, Inc.,
1997 to 1998 Treasurer, Cincinnati Bell,
Inc., 1991 to present; Secretary,
Cincinnati Bell, Inc. 1988 to 1997;
Assistant Treasurer, Cincinnati Bell,
Inc., 1988 to 1991.
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel B. Benhase November 23, 1959 President Executive Vice President, Firstar
Firstar Corporation Corporation since 1987.
425 Walnut Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph C. Neuberger April 4, 1962 Vice President Vice President, Firstar Mutual Fund
Firstar Mutual Fund Services, LLC Services, LLC, 1994 to present.
615 E. Michigan Street
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------------------------
Michael T. Karbouski March 3, 1965 Treasurer Trust Officer, Firstar Mutual Fund
Firstar Mutual Fund Services, LLC Services, LLC, 1990 to present.
615 E. Michigan Street
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------------------------
Elaine E. Richards April 8, 1968 Secretary Trust Officer, Firstar Mutual Fund
Firstar Mutual Fund Services, LLC Services, LLC, June 1998 to present;
615 E. Michigan Street Associate Attorney, Reinhart, Boerner, Van
Milwaukee, WI 53202 Deuren, Norris & Rieselbach, s.c.,
Milwaukee, Wisconsin, 1995 to 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
*<F38> This trustee is deemed to be an "interested person," as defined in the 1940 Act, of the Trust by virtue of his business
relationship with the Funds' investment adviser, and certain of its affiliates. The Student Loan Funding Corporation and
SLFC, Inc., of which Mr. Conlan is President and Chief Executive Officer, purchase student loans from various financial
institutions, including the Funds' investment adviser and its affiliates. In addition, the Funds' investment adviser extends
credit from time to time to Student Loan Funding Corporation and SLFC, Inc. to finance their operations.
</TABLE>

COMPENSATION

For their service as Trustees, the independent Trustees receive a $3,000 annual
retainer fee and $2,375 per meeting attended, as well as reimbursement for
expenses incurred in connection with attendance at such meetings. The
interested Trustees of the Trust receive no compensation for their service as
Trustees. The table below details the amount of compensation received by the
Trustees from the Trust for the past fiscal year. Presently, none of the
executive officers receive compensation from the Trust. The aggregate
compensation is provided for the Trust, which is comprised of eleven portfolios.

<TABLE>

PENSION OR RETIREMENT ESTIMATED ANNUAL TOTAL COMPENSATION
AGGREGATE COMPENSATION BENEFITS ACCRUED AS PART BENEFITS UPON FROM TRUST AND FUND
NAME AND POSITION FROM TRUST**<F40> OF TRUST EXPENSES RETIREMENT COMPLEX PAID TO TRUSTEES
<S> <C> <C> <C> <C>
- ----------------- ----------------- ----------------- ---------- ------------------------
Thomas L. Conlan, Jr.*<F39> None None None None
Trustee

Dr. Alfred Gottschalk Trustee $11,000 None None $11,000

Dr. Robert J. Hill $11,500 None None $11,500
Trustee

Dawn M. Hornback $11,000 None None $11,000
Trustee

Lawrence M. Turner $11,000 None None $11,000
Trustee

William H. Zimmer, III $11,500 None None $11,500
Trustee

*<F39> This trustee is deemed to be an interested person as defined in the 1940 Act.
**<F40>A portion of these fees were paid by the Market Capitalization Fund a former Firstar Stellar Fund that was recently
dissolved.
</TABLE>
SALES LOADS

Unless a trustee falls into one of the following categories, there are currently
no discounts available to Trustees on sales charges applied to shares of the
Funds. The following persons will not have to pay a sales charge on class A
shares:

O Employees and retired employees of Firstar Bank (or Star Bank), or
their affiliates and members of their families (including parents,
grandparents, siblings, spouses, children, and in-laws) of such
employees or retired employees;
O FirstarTrust customers of Firstar Corporation and its subsidiaries;
and
O non-trust customers of financial advisers

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

CONTROL PERSON

For certain purposes, Firstar Bank, N.A. may be deemed to control the Funds
because it owns over 25% of the voting shares of the Funds and, as a result,
will be able to affect the outcome of certain matters presented for a vote of
each of the fund's shareholders. Firstar Bank serves as the investment adviser
for the Funds and also serves as custodian. Firstar Bank is located at 425
Walnut Street, Cincinnati, Ohio 45202. Firstar Bank is a national association
and is wholly-owned by Firstar Corporation.

Firstcinco, a commercial bank in Cincinnati, Ohio, also owns over 25% of the
shares of some of the Funds and may be deemed to control those Funds. Firstar
Bank, N.A. has voting rights of all the shares owned by Firstcinco. The table
below shows the approximate percentage of the Funds owned by Firstar Bank, N.A.
and Firstcinco as of March 1, 1999.

- ----------------------------------------------------------------------------
PERCENTAGE OWNED BY
FIRSTAR BANK, N.A. A Shares B Shares C Shares Y Shares
- ----------------------------------------------------------------------------
Treasury Fund 88.91% 43.52%
Tax-Free Money Market Fund 79.17%
Ohio Tax-Free Money Market Fund 50.72%

- ----------------------------------------------------------------------------
PERCENTAGE OWNED BY FIRSTCINCO A Shares B Shares C Shares Y Shares
- ----------------------------------------------------------------------------
Insured Tax-Free Bond Fund 76.15%
U.S. Government Income Fund 67.24%
Strategic Income Fund 43.59%
Relative Value Fund 74.41%
Growth Equity Fund 82.48%
Capital Appreciation Fund 81.31%
International Equity Fund 70.72%
Stellar Fund 85.93%

PRINCIPAL HOLDERS

As of March 1, 1999, the following person is deemed to be a principal holder of
the respective Funds because it beneficially owns 5% or more of the Fund's
outstanding equity securities.

NAME AND ADDRESS FUND/CLASS PERCENTAGE OWNED
Strafe & Co., for the Relative Value - A 7.55%
benefit of Southern
Ohio Medical Center
Pension Fund,
Westerville, Ohio

Strafe & Co., for the Growth Equity - B 5.31%
benefit of Southern
Ohio Medical Center
Pension Fund,
Westerville, Ohio

MANAGEMENT OWNERSHIP

As of March 1, 1999, the officers and Trustees of the Trust own less than 1% of
the outstanding shares of any of the Funds.

INVESTMENT ADVISORY SERVICES

ADVISER TO THE FUND

The Trust's investment adviser is Firstar Bank, N.A. located at 425 Walnut
Street, Cincinnati, Ohio 45202 ("Firstar Bank"). Firstar Bank is a wholly-owned
subsidiary of Firstar Corporation whose principal business is commercial
banking. On November 20, 1998, Star Banc Corporation merged with Firstar
Corporation. The new entity retained the "Firstar" name and Firstar Corporation
is now the parent company of the adviser. Firstar Bank, N.A. was known as Star
Bank, N.A. prior to the merger.

Firstar Bank's assets under management, including mutual funds, have a market
value in excess of $ 12 billion. As part of its regular banking operations,
Firstar Bank may make loans to public companies. As a result, it may be
possible for the Funds to hold or acquire securities of companies that are also
lending clients of Firstar Bank. The lending relationship will not be a factor
in the selection of securities. Because of internal controls maintained by
Firstar Bank to restrict the flow of non-public information, Trust investments
are typically made without any knowledge of Firstar Bank's or its affiliates'
lending relationships with an issuer.

Firstar Bank 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.

Firstar Corporation is also the parent company to Firstar Investment Management
and Research Company, LLC ("FIRMCO"), a registered investment adviser. FIRMCO
serves as the investment adviser to the Firstar Funds, a separate family of
funds using the "Firstar" name.

ADVISORY FEES

For its advisory services, Firstar Bank receives an annual investment advisory
fee from each fund as described in the prospectus. For the fiscal years (or
period, as the case may be) ended November 30, 1996, 1997 and 1998 the Adviser
earned and was paid the following amounts, unless some portion of the fee was
waived as indicated.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Advisory fees earned (Advisory fees waived)
- ------------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury Fund $3,586,051 $4,990,143 $6,734,607
Tax-Free Money Market Fund $984,158 (210,332) $761,494 (138,499) $676,387 (122,979)
Ohio Tax-Free Money Market Fund1<F41> N/A N/A $195,781 (142,326)1<F41>
Strategic Income Fund $689,394 $1,343,811 $1,865,171
U.S. Government Income Fund $702,550 $819,582 $806,064
Insured Tax-Free Bond Fund2 N/A $825,962 (275,321)2<F42 $1,065,733 (355,244)
Growth Equity Fund $455,889 $946,601 $1,269,745
Relative Value Fund $1,249,213 $2,220,214 $3,061,795
Stellar Fund $1,078,738 $1,114,195 $1,057,960
Capital Appreciation Fund $665,476 $774,928 $767,140
International Equity Fund3<F43> N/A N/A $313,7283

1<F41> For the period from December 2, 1997 (date of initial public investment) to November 30, 1998.
2<F42> For the period from December 30, 1997 (date of initial public investment) to November 30, 1998.
3<F43> For the period from December 3, 1997 (date of initial public investment) to November 30, 1998.
</TABLE>

BROKERAGE TRANSACTIONS

The adviser is responsible for making decisions to buy and sell securities for
the Funds and for placing the Funds' securities. The adviser is also
responsible for negotiating the commissions to be paid on such transactions and
allocating portfolio transactions. The adviser seeks to obtain the best
execution at the best security price available with respect to each transaction.
The best price to a fund means the best net price without regard to the mix
between purchase or sale price and commission if any. While the adviser seeks
reasonably competitive commission rates, the Funds do not necessarily pay the
lowest available commission. Brokerage will not be allocated based on the sale
of the Funds' shares.

During the fiscal years (or period, as the case may be) ended November 30, 1996,
1997 and 1998, the Funds paid the following total brokerage commissions.

1996 1997 1998
- --------------------------------------------------------------------------------
Treasury Fund $0 $0 $0
Tax-Free Money Market Fund1 $0 $0 $0
Ohio Tax-Free Money Market Fund N/A N/A $0
Strategic Income Fund $197,130 $406,396 $395,862
U.S. Government Income Fund $0 $0 $400
Insured Tax-Free Bond Fund N/A $0 $0
Growth Equity Fund $267,175 $274,875 $286,979
Relative Value Fund $146,237 $218,211 $315,245
Stellar Fund $125,215 $145,306 $396,057
Capital Appreciation Fund $415,208 $742,452 $262,127
International Equity Fund N/A N/A $50,105

Section 28(e) of the Securities Exchange Act of 1934, as amended, permits an
investment adviser under certain circumstances, to cause an account to pay a
broker or dealer who supplies brokerage and research services a commission for
effecting a transaction in excess of the amount of commission another broker or
dealer would have charged for effecting the transaction. Brokerage and research
services include:

(a) furnishing advice as to the value ofsecurities, the availability of
investing, purchasing or selling securities and the availability of
securities or purchases or sellers of securities;
(b) furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the
performance of accruals; and
(c) effecting securities transactions and performing functions incidental
thereto (such as clearance, settlement and custody).

In selecting broker or dealers, the adviser considers investment and market
information and other research, such as economic, securities and performance
measurement research provided by such brokers or dealers and the quality and
reliability of brokerage services, including execution capability, performance
and financial responsibility. Accordingly, the commissions charged by any such
broker or dealer may be greater than the amount another firm might charge if the
adviser determines in good faith that the amount of such commissions is
reasonable in relation to the value of the research information and brokerage
services provided by such broker or dealers to the Funds. The adviser believes
that the research information received in this manner provides the Funds with
benefits by supplementing the research otherwise available to the Funds. Such
higher commissions will not be paid by the Funds unless:

(a) the adviser determines in good faith that the amount is reasonable in
relation to the services in terms of the particular transaction or in
terms of the adviser's overall responsibilities with respect to the
accounts, including the Funds as to which it exercises investment
discretion;
(b) such payment is made in compliance with the provisions of Section 28(c)
and to other applicable state and federal laws; and
(c) in the opinion of the adviser, the total commissions paid by the Funds
will be reasonable in relation to the benefits to the Funds over the long
term.

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.

Under certain circumstances, a sales charge incurred by the INTERNATIONAL EQUITY
FUND in acquiring shares of an underlying fund may not be taken into account in
determining the gain or loss on the disposition of the shares acquired. If
shares are disposed of within 90 days from the date they were purchased and if
shares of a new underlying fund are subsequently acquired without imposition of
a sales charge or imposition of a reduced sales charge pursuant to a right
granted to the fund to acquire shares without payment of a sales charge or with
the payment of a reduced charge, then the sales charge paid upon the purchase of
the initial shares will be treated as paid in connection with the acquisition of
the new underlying fund's shares rather than the initial shares.

ADMINISTRATIVE SERVICES

As of October 1, 1998, Firstar Mutual Fund Services, LLC, 615 East Michigan
Street, Milwaukee, Wisconsin 53202, a subsidiary of Firstar Bank, N.A.,
("Firstar"), provides administrative personnel and services to the Funds.
Firstar provides services such as legal compliance and accounting services.
Firstar provides these services at an annual rate of 0.11% of the average daily
net assets of each fund. Prior to October 1, 1998, Federated Administrative
Services provided administrative services to the Funds at an annual rate of
0.12% of each fund's average daily net assets.

Edgewood Services, Inc. as sub-administrator to the Funds. For its services,
Edgewood is paid a fee by the Fund's administrator and is not paid by the Funds.

Over the last three fiscal years the Trust on behalf of the Funds paid the
following amount in administrative fees:
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Fees Paid to: Federated Federated Federated Firstar
- ------------------------------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal year 12/1/97 - 10/1/98 -
ended 1996 ended 1997 9/30/98 11/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Treasury Fund $717,407 $922,287 $1,270,147 $290,973
Tax-Free Money Market Fund1 $179,533 $128,243 $117,566 $24,790
Ohio Tax-Free Money Market Fund N/A N/A $41,217 $5,715
($18,871)
Strategic Income Fund $72,413 $130,615 $190,885 $20,661
U.S. Government Income Fund $117,252 $126,436 $128,867 $27,751
Insured Tax-Free Bond Fund N/A $101,260 $136,827 $20,007
Growth Equity Fund $60,748 $116,489 $164,319 $33,540
Relative Value Fund $166,585 $273,396 $398,051 $82,764
Stellar Fund $113,861 $108,560 $110,278 $19,658
Capital Appreciation Fund $70,082 $72,536 $79,934 $14,310
International Equity Fund N/A N/A $46,194 $8,836
</TABLE>

FUND ACCOUNTING AND DIVIDEND PAYING AGENT SERVICES

As of October 1, 1998, Firstar provides fund accounting personnel and services
to the Funds pursuant to a Fund Accounting Service Agreement. Under the Fund
Accounting Servicing Agreement, Firstar provides portfolio accounting services,
expense accrual and payment services, fund valuation and financial reporting
services, tax accounting services and compliance control services. Firstar
receives a fund accounting fee, for all of the Funds combined, which is billed
on a monthly basis. Firstar acts as the Funds' dividend paying agent.
Federated Services Company previously provided those services to the Funds.

CUSTODIAN

Firstar Bank, N.A., 425 Walnut Street, Cincinnati, OH 45202, is custodian for
the cash and securities of the Funds. Under the Custodian Agreement, Firstar
Bank holds the Funds' portfolio securities in safekeeping and keeps all
necessary records and documents relating to its duties. The custodian receives
an annual fee equal to 0.025% of each Fund's average daily net assets.

DISTRIBUTION PLAN

As noted in the Funds' prospectuses, the Trust on behalf of the Funds has
adopted a Rule 12b-1 Plan, as amended and restated, pursuant to Rule 12b-1
promulgated by the SEC pursuant to the 1940 Act (the "Plan"). The Plan was
adopted to facilitate the sale of a sufficient number of shares to allow the
Funds to achieve economic viability. The Plan is a compensation type of Plan
that provides the Trust the ability to use assets of the Funds to pay securities
dealers, financial institutions and other industry professionals ("shareholder
service organizations") to finance any activity that is principally intended to
result in the sale of the Funds' shares subject to the Plan. Such activities
may include:
O the advertising and marketing of shares of the Funds;
O preparing, printing, and distributing prospectuses and sales
literature to prospective shareholders, brokers, or administrators;
and
O implementing and operating the Plan.

The distributor may pay fees to brokers and others for such services. As of
April 1, 1999, Edgewood Services, Inc., Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, became the distributor for the Funds. From October 1,
1998 to March 31, 1999, B.C. Ziegler and Company, 215 North Main Street, West
Bend, Wisconsin 53095, served as the Funds' distributor. Prior to that,
Federated Securities Corporation, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, provided distribution services to the Funds.

In compensation for the services provided pursuant to this Plan, Edgewood
Services, Inc. will be paid a monthly fee computed at the annual rate of up to
0.25% of the average aggregate net asset value of shares of the Funds held
during the month. The Plan provides that the only shares of the Funds subject
to the accrual and payment of Rule 12b-1 fees are the Funds in which there is Y
class of shares. Although Class Y shares are not subject to Rule 12b-1 fees,
Classes A, B or C shares within the particular fund are subject to the fees.
The following classes of the following funds are paying Rule 12b-1 fees because
a Y class of shares exists in the fund:

O TREASURY FUND Class C
O GROWTH EQUITY FUND Class B
O RELATIVE VALUE FUND Classes A and B
O STELLAR FUND Class A

The Trust's Board of Trustees, including all of the independent Trustees as
defined in the 1940 Act, has approved the Plan. The Board of Trustees has
determined that a consistent cash flow resulting from the sale of new shares is
necessary and appropriate to meet redemptions and to take advantage of buying
opportunities without having to make unwarranted liquidations of portfolio
securities. The Board of Trustees believes, therefore, that it will benefit the
Funds to have monies available for the direct distribution activities of the
distributor in promoting the sale of the Funds' shares. Furthermore, having
money available will avoid any uncertainties as to whether other payments by the
Funds constitute distribution expenses on behalf of the Funds. The Plan must be
renewed annually by the Board of Trustees, including a majority of the
independent Trustees who have no direct or indirect financial interest in the
operation of the Plan, cast in person at a meeting called for that purpose. It
is also required that the independent Trustees select and nominate other
independent Trustees.

The Plan and any related agreement may not be amended to materially increase the
amounts to be spent for distribution expenses without approval by a majority of
the Funds' outstanding shares. All material amendments to the Plan or any
related agreements must be approved by a vote of the independent Trustees, cast
in person at a meeting called for the purpose of voting on any such amendment.

The distributor is required to report in writing to the Board of Trustees, at
least quarterly, on the amounts and purpose of any payment made under the Plan.
The distributor is also required to furnish the Board of Trustees with such
other information as may reasonably be requested in order to enable the Trustees
to make an informed determination of whether the Plan should be continued.

With the exception of Firstar Bank, in its capacity as the Funds' investment
adviser, and Edgewood Services Inc., in its capacity as distributor of the
Funds' shares, no "interested person" of the Funds, as defined in the 1940 Act,
and no trustee of the Funds who is not an "interested person" has or had a
direct or indirect financial interest in the Plan or any related argument.

DETERMINING NET ASSET VALUE

The net asset value generally changes each day. The days on which the net asset
value is calculated by the Funds are described in the prospectuses. Dividend
income is recorded on the ex-dividend date, except that certain dividends from
foreign securities where the ex-dividend date may have passed, are recorded as
soon as the Funds are informed of the ex-dividend date.

DETERMINING MARKET VALUE OF SECURITIES

Market or fair values of the Funds' portfolio securities are determined as
follows:

1. For equity securities: according to the last sale price on a national
securities exchange, if applicable.
2. In the absence of recorded sales for listed equity securities:
according to the mean between the last closing bid and asked prices.
3. For unlisted equity securities: latest bid prices.
4. For bonds and other fixed-income securities: as determined by an
independent pricing service.
5. For short-term obligations: according to the mean between bid and
asked prices as furnished by an independent pricing service.
6. For short-term obligations with remaining maturities of 60 days or
less at the time of purchase: at amortized cost.
7. For all other securities: at fair value as determined in good faith
by the Trustees.

TRADING IN FOREIGN SECURITIES

Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. In computing the net asset value, the
Funds value foreign securities at the latest closing price on the exchange on
which they are traded immediately prior to the closing of the New York Stock
Exchange. Certain foreign currency exchange rates may also be determined at the
latest rate prior to the closing of the New York Stock Exchange. Foreign
securities quoted in foreign currencies are translated into U.S. dollars at
current rates. Occasionally, events that affect these values and exchange rates
may occur between the times at which they are determined and the closing of the
New York Stock Exchange. If such events materially affect the value of
portfolio securities, these securities may be valued at their fair value as
determined in good faith by the underlying fund's board of directors, although
the actual calculation may be done by others.

PURCHASE, EXCHANGE AND PRICING OF SHARES

Except in initial circumstances as described in the prospectuses, shares of the
Funds are sold at their net asset value plus a sales charge, on days the New
York Stock Exchange and the Federal Reserve wire system are open for business.
The procedure for purchasing shares of the Funds is explained in the
prospectuses.

CLASS C AND CLASS Y SHARES

Class C and Class Y shares are sold at their net asset value and do not have
sales charges or contingent deferred sales charges. See the prospectuses for
more information.

CLASS A SHARES - REDUCING THE SALES CHARGE

Class A shares of the Funds are sold at their net asset value plus a sales
charge as described in the prospectuses. Shareholders can reduce the sales
charge on purchases of Class A shares by:

O purchasing larger quantities of shares or putting a number of
purchases together to obtain the discounts
O signing a 13-month letter of intent
O using the reinvestment privilege
O making concurrent purchases

Large Purchases and Quantity Discounts As indicated in the prospectuses, the
more shares a shareholder purchases, the smaller the sales charge per
share. If a shareholder purchases Class A shares on the same day as his or
her spouse or children under 21 purchase shares, his or her purchases will
be combined in calculating the sales charges.

Also, if shareholders later purchase additional shares of a fund, the
purchases will be added together with the amount already invested in the
Fund. For example, if a shareholder already owns shares of the STELLAR
FUND with a value at the current net asset value ("NAV") of $90,000.
Later, the shareholder purchases $10,000 more at the current NAV. The
sales charge on the additional purchase would be 3.75%, not 4.50% as shown
in the prospectuses. When making additional purchases, shareholders should
inform the Funds in writing that they already own shares of the fund at the
time of purchasing more shares.

Signing a Letter of Intent If investors intend to purchase at least $100,000
of Class A shares over the next 13 months, they should consider signing a
letter of intent to reduce the sales charge. A letter of intent includes a
provision allowing the Funds to adjust the sales charge depending on the
amount you actually purchase within the 13-month period. It also allows
the custodian to hold the maximum sales charge (4.50% or 1.50% as the case
may be) in shares in escrow until the purchases are completed. The shares
held in escrow in the investor's account will be released when the letter
of intent is fulfilled or when the 13-month period is over, whichever comes
first. If the investor did not purchase the amount stated in the letter of
intent, the fund will redeem the appropriate number of escrowed shares to
cover the difference in the sales charge.

The letter of intent does not obligate the investor to purchase shares, but
simply allows the investor to take advantage of the lower sales charge
applicable to the total amount intended to buy. When the investor
establishes a letter of intent, the balances in any of the Funds' accounts
(except the money market accounts) will be aggregated to provide a purchase
credit towards fulfillment of the letter of intent. The investor's prior
trade prices will not be adjusted, however.

Reinvestment Privilege If Class A shares of any of the Funds have been
redeemed, the investor has a one-time right, within 30 days, to reinvest
the redemption proceeds at the next-determined net asset value without any
sales charge. Shareholders should inform the Funds, in writing, that they
are reinvesting so that they will not be overcharged.

Concurrent Purchases Another way to reduce the sales charge is to combine
purchases made at the same time in two or more of the Funds that apply
sales charges. For example, if an investor invests $30,000 in Class A
shares of one of the Funds, and $70,000 in Class A shares of another fund,
the sales charge would be lower. Investors should inform the Funds in
writing about the concurrent purchases so that they will not be
overcharged.

CLASS B SHARES - ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE
Class B shares of the Funds are sold at their net asset value plus a contingent
defined sales charges as described in the prospectuses. No CDSC will be charged
for redemptions made under the following circumstances:

O redemptions made following death or disability (as defined by the IRS)
O redemptions made as minimum required distributions under an IRA or
other retirement plan to a shareholder who is 701/2 years old or older
O involuntary redemptions made in shareholder accounts that do not have
the required minimum balance

Death or Disability To receive the CDSC exemption with respect to death or
disability, Firstar Bank or the distributor must be notified in writing at
the time of the redemption that the shareholder, or his or her executor,
requests the exemption.

IRA or other Retirement Plan The exemption from the CDSC for Individual
Retirement Accounts of other retirement plans does not extend to account
transfers, rollovers, and other redemptions made for purposes of
reinvestment.

Involuntary Redemptions Firstar Stellar Funds reserves the right to redeem
shares of accounts with low balances (balances below $1,000). Shareholders
will not be charged a CDSC for this type of involuntary redemption. See
the prospectuses for more information on accounts with low balances.

EXCHANGE PRIVILEGE

Shareholders may exchange shares within the Firstar Stellar Funds. Prior to any
exchange, shareholders should read a copy of the current prospectus of the fund
into which they wish to exchange. To participate in the exchange privilege,
shareholders must exchange shares having a net asset value of at least $1,000.
If you established your account through a Shareholder Service Organization, you
may be able to exchange a lower amount, but you should consult your account
agreement for procedures. Exercising the exchange privilege is treated as a
sale for federal income tax purposes and you may realize short or long-term
capital gains or losses on the exchange.

Shareholders may exchange shares by telephone or in writing as follows:

Telephone
- ---------
You may exchange shares by telephone only if the shareholders registered on your
account are the same shareholders registered on the account into which you are
exchanging. Exchange requests must be received before 3:30 p.m. (Eastern time)
to be processed that day.

In Writing
- ----------
You may send your exchange request in writing. Please provide the fund name and
account number for each of the Funds involved in the exchange and make sure the
letter of instruction is signed by all shareholders on the account.

Each class of shares may be exchanged as follows:

O Holders of Class C or Y shares of any of the Firstar Stellar Funds may
exchange such shares for Class C or Y shares of any other Firstar
Stellar Fund at net asset value.
O Holders of Class B shares of any Firstar Stellar Fund may exchange
such shares for Class B or C shares of any other Firstar Stellar Fund
at net asset value.
O Holders of Class A shares of any Firstar Stellar Fund may exchange
such shares for Class A or C shares of any other Firstar Stellar Fund
at net asset value plus the difference (if any) between the sales
charge already paid on the shares of the fund which are being
exchanged out of, and any sales charge imposed by the fund which is
being exchanged into. In all cases, shareholders will be required to
pay a sales charge only once.

Shares are exchanged at their net asset values. However, additional fees may
apply to class A and B shares as noted in the table below.

A to A Exchange
- -----------------------------------------------------------------------------
When you exchange Class A shares of a fund for Class A shares of another fund,
you will have to pay the difference between the fund's sales charge you already
paid and the sales charge of the fund into which you are entering.

A to C Exchange
- -----------------------------------------------------------------------------
When you exchange Class A shares of a fund for Class C shares of another fund,
the Class A shares retain their charge to be exercised in further exchanges.
If you later re-exchange the C shares that you obtained from the A-C exchange,
you would exchange at the NAV plus the difference between the sales charge
initially paid and the sales charge of the fund into which you are entering.

B to B Exchange / B to C Exchange
- -----------------------------------------------------------------------------
When you exchange Class B shares of a fund for Class B or C shares of another
fund, no sales charges are assessed at the time of the exchange. However, if
you redeem shares within 5 years of the original purchase, a CDSC will be
imposed according to the original purchase date.

NOTE: Firstar Stellar Funds may modify or terminate the exchange privilege at
any time. Investors may have difficulty making exchanges by telephone through
brokers or banks during times of drastic market changes. If you cannot contact
your broker or bank, by telephone, you should send your request in writing via
overnight mail.

EXCHANGING SECURITIES FOR FUND SHARES

The Funds may accept securities in exchange for shares. The Funds will allow
such exchanges only upon the prior approval of the particular 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, and must not be subject to
restrictions on resale. The fund acquires the exchanged securities for
investment and not for resale. The market value of any securities exchanged in
an initial investment, plus any cash, must be at least $25,000.

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 upon the net asset
value of shares of the fund on the day the securities are valued. One share of
the fund will be issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be considered
in valuing the securities. All interest, dividends, subscription, or other
rights attached to the securities become the property of the fund, along with
the securities.

SHAREHOLDER SERVICES PLAN

Shareholder service organizations are non-affiliated banks and broker/dealers
that provide certain support and distribution services to their customers who
are the beneficial owners of the Funds' shares. Generally, the services
provided include assisting customers in processing purchase, exchange and
redemption requests, although the services vary according to the specific
agreement. Shareholder service organizations are record owners of the shares of
the Funds and are responsible for promptly transmitting orders. The
organizations may charge their customers for services relating to their
investment in the Funds. If you are a customer of a shareholder service
organization, carefully read your account agreement together with the Funds'
prospectuses with regard to services provided, fees charged and any restrictions
imposed.

Firstar Bank has a shareholder services plan that permits the payment of fees to
Firstar Bank and, indirectly, to financial institutions to cause services to be
provided 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:

O establish and maintain shareholder accounts and records;
O process purchase and redemption transactions and automatic investments
of client account cash balances;
O answer routine client inquiries; and
O assist clients in changing dividend options, account designations and
addresses.

FREQUENT INVESTOR PROGRAM

The Frequent Investor Program is a program that allows investors to win a free
round-trip airline ticket. If investors earn 50,000 points, they win a round-
trip airline ticket to any of the 50 states on any U.S. carrier.

The terms and conditions regarding the program are as follows:

O Investors must purchase Class A or B shares of any of the Firstar
Stellar Funds.
O Investors will earn one point for every dollar invested (gross of
sales charges) in Class A or B shares after August 12, 1996.
O The program does not apply to shares obtained without a sales charge
or a CDSC. It also does not apply to shares acquired through
reinvested dividends or capital gain distributions.
O The program does not apply to Class A or B shares acquired by
exchange.
O Investors may redeem shares at any time without losing points.
O Investors may earn up to 100,000 points (2 airline tickets) in any
12-month period.
O All unused points will expire one year from the latest purchase of
shares of $100 or more.
O Points are not transferable.

Regarding the airline tickets:

O The ticket will be for a non-refundable coach seat.
O The price of the ticket may not exceed $500 (including taxes and
destination charges), however, investors may choose to pay any
overage.
O All travel must be within the 50 United States.
O Interim stopovers may not exceed four hours.
O Tickets will be mailed to the investor's account address, although
overnight shipping is available at the investor's expense.
O There are no "blackout" dates.
O Investors must purchase their tickets 21 days in advance, and a
Saturday night stay is required.
O Tickets may be purchased in any individual's name.

NOTE: Firstar Stellar Funds may modify or terminate the frequent investor
program at any time. Firstar Bank may create special offering periods featuring
bonus points or other temporary enhancement to the program. Existing and
prospective shareholders will be given notice of such special offering periods.

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. Firstar Bank acts as the
shareholder's agent in depositing checks and converting them to federal funds.

REDEEMING SHARES

REDEMPTION IN KIND

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 under the 1940 Act 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 class' net asset value during any
90-day period.

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 in the disposition of such securities.

REDEMPTION IN WRITING

To redeem shares, shareholders may send a written request to:

Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

The written letter of instructions must include:

O the shareholder(s)' name,
O the fund name,
O the account number,
O the share or dollar amount to be redeemed, and
O signatures by all shareholders on the account.

The proceeds will be wired to the bank account of record or sent to the address
of record within seven calendar days.

If shareholders request redemption proceeds be sent to an address other than
that on record with the fund or proceeds made payable other than to the
shareholder(s) of record, the written request must have signatures guaranteed
by:

O a trust company or commercial bank whose deposits are insured by the
BIF, which is administered by the FDIC;
O a member of the New York, Boston, American, Midwest, or Pacific Stock
Exchange;
O a savings bank or savings association whose deposits are insured by
the SAIF, which is administered by the FDIC; or
O 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 Trust and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Trust and its transfer agent reserve the right
to amend these standards at any time without notice.

TAX STATUS

THE TRUST'S TAX STATUS

The Trust will pay no federal income tax because it expects 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 Funds must,
among other requirements:

O derive at least 90% of their gross income from dividends, interest and
gains from the sale of securities;
O invest in securities within certain statutory limits; and
O distribute to their shareholders at least 90% of their net income
earned during the year.

In the event the Trust fails to qualify as a "regulated investment company," it
will be treated as a regular corporation for federal income tax purposes.
Accordingly, the Trust would be subject to federal income taxes and any
distributions made by the Funds would be taxable and non-deductible by the
Trust. This would increase the cost of investing in the Funds for shareholders
and would make it more economical for shareholders to invest directly in
securities held by the Funds instead of investing indirectly in such securities
through the Funds.

INTERNATIONAL EQUITY FUND

These requirements may restrict the degree to which the INTERNATIONAL EQUITY
FUND may engage in short-term trading and certain hedging transactions and may
limit the range of the fund's investments.

If permitted by its investment policies, the underlying fund's transactions in
futures contracts, forward contracts, foreign currency transactions, options and
certain other investment and hedging activities are subject to special tax
rules. In a given case, these rules may accelerate income to the underlying
fund, defer its losses, cause adjustments in the holding periods of the
underlying fund's assets, convert short-term capital losses into long-term
capital losses or otherwise affect the character of the underlying fund's
income. These rules could therefore affect the amount, timing and character of
distributions to the fund's shareholders.

Any dividends declared by the Fund in October, November or December to
shareholders of record during those months and paid during the following January
are treated, for tax purposes, as if they were received by each shareholder on
December 31 of the year in which they were declared.

An underlying fund may inadvertently invest in non-U.S. corporations, which are
treated as Passive Foreign Investment Companies ("PFICs") or could become a PFIC
under the Code. This could result in adverse tax consequences upon the
disposition of, or the receipt of "excess distributions" with respect to, such
equity investments. To the extent an underlying fund does invest in PFICs, it
may elect to treat the PFIC as a "qualified electing fund" or mark-to-market its
investments in PFICs annually. In either case, the underlying fund may be
required to distribute amounts in excess of its realized income and gains. To
the extent that the underlying fund itself is required to pay a tax on income or
gain from investment in PFICs, the payment of this tax would reduce the
INTERNATIONAL EQUITY FUND'S economic return.

FOREIGN TAXES

Investment income on certain foreign securities in which the STRATEGIC INCOME
FUND, GROWTH EQUITY FUND, RELATIVE VALUE FUND, CAPITAL APPRECIATION FUND and
INTERNATIONAL EQUITY FUND may invest may be subject to foreign withholding or
other taxes that could reduce the return on these securities. Tax treaties
between the United States and foreign countries, however, may reduce or
eliminate the amount of foreign taxes to which the funds would be subject.

SHAREHOLDERS' TAX STATUS

Regarding the STRATEGIC INCOME FUND, U.S. GOVERNMENT INCOME FUND, GROWTH EQUITY
FUND, RELATIVE VALUE FUND, STELLAR FUND, CAPITAL APPRECIATION FUND and
INTERNATIONAL EQUITY FUND, shareholders are subject to federal income tax on
dividends and capital gains 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 if the funds were a regular
corporation and to the extent designated by the funds as so qualifying. These
dividends and any short-term capital gains are taxable as ordinary income.

Regarding the INSURED TAX-FREE BOND FUND, no portion of any income dividend paid
by the fund is eligible for the dividends received deduction available to
corporations.

Regarding the TREASURY FUND, shareholders are subject to federal income tax on
dividends received as cash or additional shares. No portion of any income
dividend paid by the fund is eligible for the dividends received deduction
available to corporations. These dividends and any short-term capital gains are
taxable as ordinary income.

CAPITAL GAINS

Shareholders will pay federal tax at long-term capital gain rates on long-term
capital gains distributed to them regardless of how long they have held fund
shares.

Capital gains experienced by the TREASURY FUND, TAX-FREE MONEY MARKET FUND and
OHIO TAX-FREE MONEY MARKET FUND could result in an increase in dividends.
Capital losses could result in a decrease in dividends. If, for some
extraordinary reason, a fund realizes net long-term capital gains, it will
distribute them at least once every 12 months.

Regarding the INSURED TAX-FREE BOND FUND, capital gains or losses may be
realized by the fund on the sale of portfolio securities. Sales would generally
be made because of:

O the availability of higher relative yields;
O differentials in market values;
O new investment opportunities;
O changes in creditworthiness of an issuer; or
O an attempt to preserve gains or limit losses.

Distribution of long-term capital gains are taxed as such, whether they are
taken in cash or reinvested, and regardless of the length of time the
shareholder has owned the shares.

UNDERWRITERS

DISTRIBUTION OF SECURITIES

The Funds paid the following amounts under the Rule 12b-1 Plan to Federated
Securities Corporation during the last three fiscal years. As of October 1,
1998, B.C. Ziegler and Company served as the principal distributor for the Funds
from October 1, 1998 to March 31, 1999. The amounts paid by the Funds to B.C.
Ziegler and Company and retained during the fiscal year ended November 30, 1998
are shown on the next table.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Fiscal Year 1996 Fiscal Year 1997 12/1/97 - 9/30/98
Fees Paid to Federated Total Amount Total Amount Total Amount
commission retained commission retained commission retained
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Treasury Fund 0 0 $202,834 0 $539,210 0
Tax-Free Money Market Fund 0 0 0 0 0 0
Ohio Tax-Free Money Market Fund 0 0 0 0 0 0
Strategic Income Fund 0 0 0 0 0 0
U.S. Government Income Fund 0 0 0 0 0 0
Insured Tax-Free Bond Fund 0 0 0 0 0 0
Growth Equity Fund 0 0 $25,307 0 $118,011 0
Relative Value Fund 0 0 $22,038 0 $95,392 0
Stellar Fund $121,479 0 $126,341 0 $104,226 0
Capital Appreciation Fund 0 0 0 0 0 0
International Equity Fund 0 0 0 0 0 0

- -------------------------------------------------------------------------
10/1/98 - 11/30/98
Total Amount
Fees Paid to B.C. Ziegler commissions retained
- -------------------------------------------------------------------------
<S> <C> <C>
Treasury Fund $125,705 0
Tax-Free Money Market Fund1 0 0
Ohio Tax-Free Money Market Fund 0 0
Strategic Income Fund 0 0
U.S. Government Income Fund 0 0
Insured Tax-Free Bond Fund 0 0
Growth Equity Fund $25,638 0
Relative Value Fund $19,784 0
Stellar Fund $18,956 0
Capital Appreciation Fund 0 0
International Equity Fund 0 0
</TABLE>
CALCULATION OF PERFORMANCE DATA

The Funds performance or return may be shown in the form of various performance
figures. The Funds' performance figures are based upon historical results and
are not necessarily representative of future performance. Factors affecting the
Funds' performance include general market conditions, generating expenses, the
imposition of sales charges and investment management.

YIELD -- MONEY MARKET FUNDS

Yields for the money market funds are calculated 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 the
funds, the performance will be reduced for those shareholders paying those fees.
The yields for the 7-day period ended November 30, 1998 were as follows:

YIELDS FOR 7-DAY PERIOD ENDING 11/30/98 C SHARES Y SHARES
- ----------------------------------------------------------------------
Treasury Fund 3.93% 4.08%
Tax-Free Money Market Fund 2.50% N/A
Ohio Tax-Free Money Market Fund 2.68% N/A

EFFECTIVE YIELD -- MONEY MARKET FUNDS

The effective yield for the money market funds 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.

The effective yields for the 7-day period ended November 30, 1998 were as
follows:

EFFECTIVE YIELDS FOR 7-DAY PERIOD ENDING 11/30/98 C SHARES Y SHARES
- ---------------------------------------------------------------------------
Treasury Fund 4.01% 4.17%
Tax-Free Money Market Fund 2.54% N/A
Ohio Tax-Free Money Market Fund 2.71% N/A

YIELD -- BOND FUND AND STOCK FUNDS

Yield is computed in accordance with a standardized method prescribed by rules
of the Securities and Exchange Commission. Under that method, the current yield
quotation for a fund is based on a one month or 30-day period. The yield is
computed by dividing the net investment income per share earned during the 30-
day or one month period by the maximum offering-price per share on the last day
of the period, according to the following formula:
YIELD = 2[(a-b + 1)6 - 1]

c-d
Where: a = dividends and interest earned during the period.

b = expenses accrued for the period (net of reimbursements)

c = the average daily number of shares outstanding during the period that

were entitled to receive dividends

d = the maximum offering price per share 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 each class of
shares 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 an investment in each class of shares, the performance will be
reduced for those shareholders paying those fees.

The funds' yields for the 30-day period ended November 30, 1998 were as follows:

Yields for 30-day period
ended 11/30/98 Class A Class B Class Y
Shares Shares Shares
Strategic Income Fund -- 6.30% --
U.S. Government Income Fund 4.72% 4.72% --
Insured Tax-Free Bond Fund 3.59% -- --
Relative Value Fund 0.63% 0.87% 0.88%
Stellar Fund 2.40% -- 2.65%

AVERAGE ANNUAL TOTAL RETURNS

The average annual total return is computed by finding the average annual
compounded rates of return over the periods that would equate the initial amount
invested to the redeemable value according to the following formula:

P(1+T)n = ERV

Where P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the stated periods at the end of the stated periods.

Performance for a specific period is calculated by first taking an investment
(assumed to be $1,000) ("initial investment") in a fund's shares on the first
day of the period and computing the "ending value" of that investment at the end
of the period. The total return percentage is then determined by subtracting
the initial investment from the ending value and dividing the remainder by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends paid by a fund have been
reinvested at the net asset value of the fund on the reinvestment date during
the period. Total return may also be shown as the increased dollar value of the
hypothetical investment over the period.

Cumulative total return represents the simple change in value of an investment
over a stated period and may be quoted as a percentage or as a dollar amount.
Total returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to illustrate the
relationship between their factor and their contributions to total return.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS ENDED 11/30/98 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(INCEPTION DATE)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Treasury Fund C Shares 4.69% 4.57% N/A 4.94%
Y Shares 4.84% N/A N/A 4.88%
Tax-Free Money Market Fund C Shares 2.83% 2.85% -- 2.80%
Ohio Tax-Free Money Market Fund C Shares -- -- -- 3.51%
Strategic Income Fund B Shares (2.16)% -- -- 6.54%
U.S. Government Income Fund A Shares 9.00% 6.09% -- 6.46%
B Shares -- -- -- 6.71%
Insured Tax-Free Bond Fund A Shares 7.20% -- -- 7.35%
Growth Equity Fund B Shares 20.76% -- -- 25.19%
Y Shares 20.91% -- -- 20.00%
Relative Value Fund A Shares 16.67% 20.62% -- 16.92%
B Shares -- -- -- 1.50%
Y Shares 16.95% -- -- 16.36%
Stellar Fund A Shares 5.74% 9.55% -- 9.56%
Y Shares 6.11% -- -- 10.43%
Capital Appreciation Fund A Shares 4.75% -- -- 10.35%
International Equity Fund A Shares -- -- -- 3.95%
</TABLE>

TAX EQUIVALENT YIELD

The tax-equivalent yield for the TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE
MONEY MARKET FUND is calculated similarly to the yield, but is adjusted to
reflect the taxable yield that the funds would have had to earn to equal its
actual yield, assuming a 31% tax rate and assuming that income is 100% tax-
exempt. The INSURED TAX-FREE BOND FUND is calculated similarly to the yield,
but is adjusted to reflect the taxable yield that the funds would have had to
earn to equal its actual yield, assuming a 39.60% tax rate and assuming that
income is 100% tax-exempt.

The funds may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal securities in the funds'
portfolio generally remains free from federal income tax,1 and is often free
from state and local taxes as well. As the tables below indicate, a "tax-free"
investment can be an attractive choice for investors, particularly in times of
narrow spreads between tax-free and taxable yields. The table below would be
used for the TAX-FREE MONEY MARKET FUND and INSURED TAX-FREE BOND FUND.
<TABLE>
TAXABLE YIELD EQUIVALENT FOR 1999
MULTISTATE MUNICIPAL FUND
FEDERAL INCOME TAX BRACKET:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
15.00% 28.00% 31.00% 36.00% 39.60%
- ------------------------------------------------------------------------------------------------------------------------------------
Joint Return $1 -- $43,050 $42,351--$104,050 $104,051--$158,550 $158,551--$283,150 Over $283,150
Single Return $1 -- $25,750 $25,751 -- $62,450 $62,451 -- $130,250 $130,251 --$283,150 Over $283,150
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Yield Taxable Yield Equivalent
- ------------------------------------------------------------------------------------------------------------------------------------
1.00% 1.18% 1.39% 1.45% 1.56% 1.66%
1.50% 1.76% 2.08% 2.17% 2.34% 2.48%
2.00% 2.35% 2.78% 2.90% 3.13% 3.31%
2.50% 2.94% 3.47% 3.62% 3.91% 4.14%
3.00% 3.53% 4.17% 4.35% 4.69% 4.97%
3.50% 4.12% 4.86% 5.07% 5.47% 5.79%
4.00% 4.71% 5.56% 5.80% 6.25% 6.62%
4.50% 5.29% 6.25% 6.52% 7.03% 7.45%
5.00% 5.88% 6.94% 7.25% 7.81% 8.28%
5.50% 6.47% 7.64% 7.97% 8.59% 9.11%
6.00% 7.06% 8.33% 8.70% 9.38% 9.93%
6.50% 7.65% 9.03% 9.42% 10.16% 10.76%
7.00% 8.24% 9.72% 10.14% 10.94% 11.59%
7.50% 8.82% 10.42% 10.87% 11.72% 12.42%
8.00% 9.41% 11.11% 11.59% 12.50% 13.25%
</TABLE>

Note: The maximum marginal tax rate for each bracket was used in calculating
the taxable yield equivalent.

The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of fund shares.

*Some portion of the funds' income may be subject to the federal alternative
minimum tax and state and local income taxes.

The following two tables would be used for the OHIO TAX-FREE MONEY MARKET FUND.
<TABLE>
TAXABLE YIELD EQUIVALENT
STATE OF OHIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FEDERAL TAX BRACKET:
15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL AND STATE TAX BRACKET:
19.040% 32.715% 37.626% 42.799% 46.399%
- ------------------------------------------------------------------------------------------------------------------------------------
Single Return $1--$25,750 $25,751-$62,450 $62,451-$130,250 $130,251-$283,150 Over $283,150

Tax-Exempt Yield Taxable Yield Equivalent
- ------------------------------------------------------------------------------------------------------------------------------------
1.50% 1.85% 2.23% 2.40% 2.62% 2.80%
2.00% 2.47% 2.97% 3.21% 3.50% 3.73%
2.50% 3.09% 3.72% 4.01% 4.37% 4.66%
3.00% 3.71% 4.96% 4.81% 5.24% 5.60%
3.50% 4.32% 5.20% 5.61% 6.12% 6.53%
4.00% 4.94% 5.94% 6.41% 6.99% 7.46%
4.50% 5.56% 6.69% 7.21% 7.87% 8.40%
5.00% 6.18% 7.43% 8.02% 8.74% 9.33%
5.50% 6.79% 8.17% 8.82% 9.62% 10.26%
6.00% 7.41% 8.92% 9.62% 10.49% 11.19%
</TABLE>

Note: The maximum marginal tax rate for the highest dollar amount in 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. Because 1999 Ohio tax rates will not be
released until October, 1999, the above calculations use 1998 Ohio tax rates.
<TABLE>
TAXABLE YIELD EQUIVALENT
STATE OF OHIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FEDERAL TAX BRACKET:
15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL AND STATE TAX BRACKET:
19.040% 32.715% 37.626% 42.799% 46.399%
- ------------------------------------------------------------------------------------------------------------------------------------
Joint Return $1-$43,050 $43,051-104,050 $104,051-$158,550 $158,551-$283,150 Over $283,150

Tax-Exempt Yield Taxable Yield Equivalent
- ------------------------------------------------------------------------------------------------------------------------------------
1.50% 1.85% 2.23% 2.40% 2.62% 2.80%
2.00% 2.47% 2.97% 3.21% 3.50% 3.73%
2.50% 3.09% 3.72% 4.01% 4.37% 4.66%
3.00% 3.71% 4.46% 4.81% 5.24% 5.60%
3.50% 4.32% 5.20% 5.61% 6.12% 6.53%
4.00% 4.94% 5.94% 6.41% 6.99% 7.46%
4.50% 5.56% 6.69% 7.21% 7.87% 8.40%
5.00% 6.18% 7.43% 8.02% 8.74% 9.33%
5.50% 6.79% 8.17% 8.82% 9.62% 10.26%
6.00% 7.41% 8.92% 9.62% 10.49% 11.19%
</TABLE>

The charts above are for illustrative purposes only. It is not an indicator of
past or future performance of fund shares.

Some portion of the fund's income may be subject to the federal alternative
minimum tax and state and local income taxes.

PERFORMANCE COMPARISONS

The performance of the Funds' shares 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 performance of the Funds' shares 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 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 that 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, the
appropriate fund will quote its Lipper ranking in the "growth"
category in advertising and sale literature.

O EUROPE, AUSTRALASIA, AND FAR EAST (EAFE) INDEX is a market
capitalization weighted foreign securities index, which is widely used
to measure the performance of European, Australian, New Zealand and
Far Eastern stock markets. The index covers approximately 1,020
companies drawn from 21 countries in the above regions. The index
values its securities daily in both U.S. dollars and local currency
and calculates total returns monthly. EAFE U.S. dollar total return is
a net dividend figure less Luxembourg withholding tax. The EAFE is
monitored by Capital International, S.A., in Geneva, Switzerland.
This index could be used to compare the performance of the
INTERNATIONAL EQUITY FUND.

O RUSSELL MIDCAP INDEX measures the performance of the 800 smallest companies
in the Russell 1000 Index, which represent approximately 35% of the total
market capitalization of the Russell 1000 Index. This index could be used
to compare the performance of the CAPITAL APPRECIATION FUND.

O STANDARD & POOR'S DAILY STOCK PRICE INDICES OF 500 AND 400 COMMON
STOCKS are composite indices of common stocks in industry,
transportation, and financial and public utility companies that can be
used to compare the total returns of funds whose portfolios are
invested primarily in common stocks. In addition, the Standard &
Poor's indices assume reinvestments of all dividends paid by stocks
listed on its indices. Taxes due on any of these distributions are
not included, nor are brokerage or other fees calculated in Standard &
Poor's figures. This index could be used to compare the performances
of the STRATEGIC FUND, GROWTH EQUITY FUND, RELATIVE VALUE FUND,
STELLAR FUND and CAPITAL APPRECIATION FUND.

O LEHMAN BROTHERS TEN-YEAR INSURED BOND INDEX is an unmanaged index that
reflects the total performance of the Insured Bond sector (includes all
bond insurers with Aaa/AAA ratings) of the Lehman Municipal Bond Index.
The maturities range between eight and twelve years. This index could be
used to compare the performance of the INSURED TAX-FREE BOND FUND.

O LEHMAN BROTHERS TEN-YEAR STATE GENERAL OBLIGATION BONDS is an index
comprised of the same issues noted above except that the maturities range
between nine and eleven years. Index figures are total returns calculated
for the same periods as listed above.

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.

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, the appropriate fund will quote its Money
ranking in advertising and sales literature. This magazine could be used
to compare the performances of the TREASURY FUND, TAX-FREE MONEY MARKET
FUND and OHIO TAX-FREE MONEY MARKET FUND.

O SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days. This index could be used to compare the performance
of the TREASURY FUND.

O SALOMON BROTHERS SIX-MONTH PRIME MUNI NOTES is an index of selected
municipal notes, maturing in six months, whose yields are chosen as
representative of this market. Calculations are made weekly and monthly.
This index could be used to compare the performances of the TAX-FREE MONEY
MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND.

O SALOMON BROTHERS ONE-MONTH TAX-EXEMPT COMMERCIAL PAPER is an index of
selected tax-exempt commercial paper issues, maturing in one month, whose
yields are chosen as representative of this particular market.
Calculations are made weekly and monthly. Ehrlich-Bober & Co., Inc., also
tracks this Salomon Brothers index. This index could be used to compare
the performances of the TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY
MARKET FUND.

O DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly
and 12 month-to-date investment results for the same money funds. This
report could be used to compare the performances of the TREASURY FUND,
TAX-FREE MONEY MARKET FUND and OHIO TAX-FREE MONEY MARKET FUND.

O DOW JONES INDUSTRIAL AVERAGE ("DJIA") represents share prices of
selected blue-chip industrial corporations as well as public utility
and transportation companies. The DJIA indicates daily changes in the
average price of stocks in any of its categories. It also reports
total sales for each group of industries. Because it represents the
top corporations of America, the DJIA's index movements are leading
economic indicators for the stock market as a whole. This index could
be used to compare the performances of the RELATIVE VALUE FUND and
STELLAR FUND.

O MERRILL LYNCH 1-10 YEAR GOVERNMENT INDEX is an unmanaged index comprised of
U.S. government securities with maturities between 1 and 10 years. Index
returns are calculated as total returns for periods of one, three, six, and
twelve months as well as year-to-date. The index is produced by Merrill
Lynch, Pierce, Fenner & Smith, Inc. This index could be used to compare
the performance of the U.S. GOVERNMENT INCOME FUND.

O LEHMAN BROTHERS GOVERNMENT/CORPORATE INDEX is an unmanaged index composed
of all bonds that are investment grade rated Baa or higher by Moody's or
BBB or higher by S&P, if unrated by Moody's. Investments can not be made
in an index. This index could be used to compare the performances of the
U.S. GOVERNMENT INCOME FUND and STELLAR FUND.

O LEHMAN BROTHERS GOVERNMENT (LT) INDEX, for example, is an index composed of
bonds issued by the U.S. government or its agencies which have at least $1
million outstanding in principal and which have maturities of ten years or
longer. Index figures are total return figures calculated monthly. This
index could be used to compare the performance of the U.S. GOVERNMENT
INCOME FUND.

Advertisements and other sales literature for shares may quote total returns
that are calculated on non-standardized base periods. These total returns also
represent the historic change in the value of an investment in share classes
based on reinvestment of dividends over a specified period of time.

Advertisements may quote performance information that does not reflect the
effect of the contingent deferred sales charge.

Advertising and other promotional literature may include charts, graphs and
other illustrations using the Funds' returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding, dollar-
cost averaging and systematic investment. In addition, share classes can
compare their performance, or performance for the types of securities in which
they 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 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 Funds' 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.

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin, 53202,
serves as the independent public accountants for the Funds. Their services
include examination of the Funds' financial statements and the performance of
other related audit and tax services.

FINANCIAL STATEMENTS

The Funds' audited financial statements are incorporated by reference to the
Funds' Annual Reports for the fiscal year ended November 30, 1998 as filed with
the SEC.

APPENDIX

STANDARD & POOR'S ("S&P") CORPORATE BOND RATING DEFINITIONS

AAA-Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA-Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.

A-Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.

BBB-Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.

BB, B, CCC, CC-Debt rated "BB", "B", "CCC", and "CC" is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "CC" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties of major risk exposures to adverse
conditions.

CI-The rating "CI" is reversed for income bonds on which no interest is being
paid.

D-Debt rated "D" is in default, and payment of interest and/or repayment of
principal is in arrears.

MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATING DEFINITIONS

AAA-Bonds which are rated "Aaa" are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or 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 that
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 near future.

BAA-Bonds which are rated "Baa" are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.

BA-Bonds which are "Ba" are judged to have speculative elements; their future
cannot be considered well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B-Bonds which are rated "B" generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

CAA-Bonds which are rated "Caa" are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

CA-Bonds which are "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

C-Bonds which are rated "C" are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

FITCH INVESTORS SERVICE, INC. BOND RATING DEFINITIONS

AA-Bonds considered to be investment grade and of very high credit 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 strong, but
may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB-Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

BB-Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.

B-Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC-Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC-Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C-Bonds are in imminent default in payment of interest or principal.

DDD, DD, AND D-Bonds are in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. "DDD"
represents the highest potential for recovery on these bonds, and "D" represents
the lowest potential for recovery.

FIRSTAR STELLAR FUNDS

STATEMENT OF ADDITIONAL INFORMATION

March 31, 1999

Firstar Stellar Treasury Fund

This Statement of Additional Information is not a prospectus
and should be read together with the prospectus of the Treasury
Fund dated March 31, 1999. To receive a copy of the
prospectus, write to Firstar Stellar Fund or call 1-800-677-
FUND.

The Fund's audited financial statements for the fiscal year
ended November 30, 1998 are incorporated by reference to the
Fund's 1998 Annual Report.
FIRSTAR STELLAR FUNDS
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WISCONSIN 53201-0701

TABLE OF CONTENTS

GENERAL INFORMATION ABOUT FIRSTAR STELLAR FUNDS..............................3
CAPITAL STOCK................................................................3
DESCRIPTION OF THE FUND......................................................4
THE FUND'S INVESTMENTS AND RISKS.............................................5
THE FUND'S INVESTMENT LIMITATIONS............................................6
MANAGEMENT OF THE FUND.......................................................7
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..........................9
INVESTMENT ADVISORY SERVICES................................................11
BROKERAGE TRANSACTIONS......................................................11
ADMINISTRATIVE SERVICES.....................................................12
FUND ACCOUNTING AND DIVIDEND PAYING AGENT SERVICES..........................13
CUSTODIAN...................................................................13
DISTRIBUTION PLAN...........................................................13
DETERMINING NET ASSET VALUE.................................................14
PURCHASE, EXCHANGE AND PRICING OF SHARES....................................15
TAX STATUS..................................................................18
UNDERWRITERS................................................................19
CALCULATION OF PERFORMANCE DATA.............................................20
PERFORMANCE COMPARISONS.....................................................22
INDEPENDENT PUBLIC ACCOUNTANTS..............................................23
FINANCIAL STATEMENTS........................................................23
APPENDIX....................................................................24

FIRSTAR STELLAR FUNDS

GENERAL INFORMATION ABOUT FIRSTAR STELLAR FUNDS
- --------------------------------------------------------------------------------

Firstar Stellar Funds (the "Trust") is a Massachusetts business trust
established under a Declaration of Trust dated January 23, 1989. The Trust
consists of a series of mutual funds, which are all open-ended management
investment company. The Trust was organized under the name "Value Plus Funds,"
but was changed on March 29, 1989 to "Losantiville Funds." On May 1, 1993, the
name of the Trust was changed again to "Star Funds." On November 20, 1998, Star
Banc Corporation, the parent company of Star Bank, N.A., merged with Firstar
Corporation. Star Bank, N.A. is the investment adviser of the Trust. After
the merger, Star Bank changed its name to Firstar Bank, N.A. On February 11,
1999, the Board of Trustees of the Trust approved changing the Trust's name to
"Firstar Stellar Funds" effective March 1, 1999.

CAPITAL STOCK
- --------------------------------------------------------------------------------

TITLE AND DESCRIPTION OF SHARE CLASSES

The Declaration of Trust permits the Trust to offer separate series of shares of
beneficial interest representing interests in separate portfolios of securities.
The Trust currently consists of 11 individual fund portfolios. Under the
Declaration of Trust and a Multiple Class Plan developed pursuant to Rule 18f3
under the 1940 Act, each fund is permitted to offer several classes of shares as
follows: Class A, Class B, Class C and Class Y. Class A shares are subject to a
frontend sales load as described in the prospectus and a Rule 12b1 fee. Class B
shares are subject to a contingent deferred sales load as described in the
prospectus and a Rule 12b1 fee. Class C shares are not subject to a sales load,
but are subject to a Rule 12b1 fee. Class Y shares are not subject to a sales
load or a Rule 12b1 fee. The table below lists the fund together with their
share classes. Please note that throughout this Statement of Additional
Information ("SAI"), the individual fund series will be referred to by their
short name (i.e., without the "Firstar Stellar" preface).

<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Bond Fund Stock Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
Treasury Fund - C, Y Insured Tax-Free Bond Fund - A Growth Equity Fund - B, Y
Tax-Free Money Market Fund - C U.S. Government Income Fund - A, B Relative Value Fund - A, B, Y
Ohio Tax-Free Money Market Fund - C Strategic Income Fund - B The Stellar Fund - A, Y
Capital Appreciation Fund - A
International Equity Fund - A
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Classes A, B and C shares are sold primarily to individuals who purchase shares
through Firstar Bank, N.A. Class Y shares are offered to trusts, fiduciaries
and other institutions through Firstar Bank, N.A. The expenses incurred
pursuant to the Rule 12b1 Plan will be borne solely by Classes A, B and C shares
of the applicable fund and constitute the only expenses allocated to one class
and not the other.

RIGHTS OF EACH SHARE CLASS

Each share of the common stock of a fund is entitled one vote in electing
Trustees and other matters that may be submitted to shareholders for a vote.
All shares of all classes of the fund in the Trust have equal voting rights.
However, matters affecting only one particular fund or class, can be voted on
only by shareholders in that fund or class. Only shareholders of Class A, B or
C shares will be entitled to vote on matters submitted to a shareholder vote
with respect to the Rule 12b1 Plan applicable to such class. All shareholders
are entitled to receive dividends when and as declared by the Trustees from time
to time and as further discussed in the Prospectus.

MASSACHUSETTS PARTNERSHIP LAW

DESCRIPTION OF THE FUND
- --------------------------------------------------------------------------------

The investment objectives listed below are fundamental objectives and therefore
cannot be changed without the approval of shareholders.

MONEY MARKET FUND
- -----------------

The TREASURY FUND, may follow non-fundamental operational policies that are more
restrictive than fundamental investment limitations, as set forth in this SAI in
order to comply with applicable laws and regulations, including the provisions
of and regulations under the Investment Company Act of 1940 ("1940 Act"). In
particular, the fund will comply with the various requirements of Rule 2a7,
which regulates money market mutual fund. The fund will also determine the
effective maturity of their investments, as well as their ability to consider a
security as having received the requisite short-term ratings by a Nationally
Recognized Ratings Organization (NRSRO) according to Rule 2a7. The fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of shareholders.

The TREASURY FUND is a diversified fund and seeks current income consistent with
maintaining stable principal.

THE FUND'S INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------
The respective prospectus describes the principal strategies and risks of the
Fund. This section provides additional information regarding investments and
transactions that the Fund is permitted to make.

REPURCHASE AGREEMENTS

The fund may invest in repurchase agreements which are arrangements with
banks, broker/dealers, and other recognized financial institutions to sell
securities to the fund and agree to repurchase them at a mutually agreed upon
time and price within one year from date of acquisition. The Fund 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, a fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for bankruptcy
or became insolvent, disposition of such securities by a fund might be
delayed pending court action. The 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 adviser to be creditworthy pursuant to guidelines
established by the Board of Trustees.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

The fund may purchase shortterm obligations on a whenissued or delayed
delivery basis. These transactions are arrangements in which a fund
purchases securities with payment and delivery scheduled for a future time.
The seller's failure to complete these transactions may cause a fund to miss
a price or yield considered 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.

These transactions are made to secure what is considered to be an
advantageous price or yield for the 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 a fund's records at the trade date. These assets are marked to
market daily and are maintained until the transaction is settled. The Fund
does not intend to engage in when-issued and delayed delivery transactions to
an extent that would cause the segregation of more than 20% of the total
value of their respective assets.

RESTRICTED AND ILLIQUID SECURITIES

The Fund may invest in a limited amount of restricted securities. Restricted
securities are securities that are thinly traded or whose resale is
restricted by federal securities laws. Restricted securities are any
securities in which the Fund may invest pursuant to their investment
objective and policies but which are subject to restrictions on resale under
federal securities laws. The Fund's Board of Trustees has established
criteria that allows the adviser to consider certain restricted securities as
liquid.

OTHER INVESTMENT COMPANIES

As an efficient means of carrying out their investment policies, the fund
may invest in the securities of other investment companies. A disadvantage
to investing in other investment companies is that they also carry certain
expenses such as management fees. As a result, any investment by the fund in
shares of other investment companies may duplicate shareholder expenses.

THE FUND'S INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------

The following is a list of the Fund's investment limitations, which cannot be
changed without the approval of a majority of a Fund's outstanding voting
securities. As used in this SAI, "a majority of a fund's outstanding voting
securities" means the lesser of (1) 67% of the shares of common stock of the
Fund represented at a meeting at which more than 50% of the outstanding shares
are present, or (2) more than 50% of the outstanding shares of common stock of
the Fund.

SELLING SHORT

The Fund will not sell any securities short.

BUYING ON MARGIN

The Fund will not purchase any securities on margin, but it may obtain
such short-term credits as may be necessary for clearance of purchases and
sales of portfolio securities.

ISSUING SENIOR SECURITIES

The Fund will not issue senior securities, except that each fund may
borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amount borrowed.

BORROWING MONEY

Except as described in the prospectus, the Fund will
borrow money or engage in reverse repurchase agreements for investment
leverage. However, the fund may borrow money up to one-third of its value of
their total assets as a temporary, extraordinary, or emergency measure or to
facilitate management of the fund by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. Interest paid on borrowed fund will serve
to reduce the fund's income. A fund will not purchase any securities while
borrowings and reverse repurchase agreements in excess of 5% of its total
assets are outstanding. During the period any reverse repurchase agreements
are outstanding, the Fund will restrict the purchase of portfolio securities
to money market instruments maturing on or before the expiration date of the
reverse repurchase agreements, but only to the extent necessary to assure
completion of the reverse repurchase agreements.

PLEDGING ASSETS

The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, the Fund may mortgage, pledge,
or hypothecate assets having a market value not exceeding 15%.

INVESTING IN REAL ESTATE

The Fund will not purchase or sell real estate, including limited partnership
interests. However, it may invest in the securities of companies whose
business involves the purchase or sale of real estate or in securities that
are secured by real estate or interests in real estate.

INVESTING IN COMMODITIES

The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts.

The Trustees may change the following investment limitations without shareholder
approval. Shareholders will be notified before any material change in these
limitations becomes effective.

INVESTING IN ILLIQUID AND RESTRICTED SECURITIES

The Fund will not invest more than 10% of the value of its
net assets in illiquid securities, including certain restricted
securities not determined to be liquid under criteria established by the
Trustees and repurchase agreements providing for settlement in more than
seven days after notice.

Under criteria established by the Board of Trustees, certain restricted
securities are considered to be liquid. The Fund will limit its purchases
of illiquid securities to 15% of its net assets which, include
restricted securities not determined by the Trustees to be liquid,
nonnegotiable time deposits, over-the-counter options, and repurchase
agreements providing for settlement in more than 7 days after notice.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund will limit its investment in other investment companies to:

0 no more than 3% of the total outstanding voting stock of any investment
company,

0 no more than 5% of their respective total assets in any one investment
company,

0 no more than 10% of their respective total assets in investment
companies in general.

The Fund will limit its investments in the securities of other
investment companies to those of money market fund having investment
objectives and policies similar to their own.

The fund does not expect to borrow money or pledge securities in excess of 5% of
the value of their respective total assets in the coming fiscal year.

MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

Officers and Trustees are listed below with their addresses, birthdates, present
positions with the Trust and principal occupations.

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS BIRTHDATE POSITION AND PRINCIPAL OCCUPATION
OFFICE WITH THE DURING THE PAST FIVE YEARS
TRUST
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thomas L. Conlan, Jr.*<F57> May 20, 1938 Trustee President and Chief Executive Officer, Student Loan
c/o Firstar Corporation Funding Resources, Inc., June 1998 to Present; President
425 Walnut Street and Chief Executive Officer, Student Loan Funding
Cincinnati, Ohio 45202 Corporation, 1981 to June 1998; President and Chief
Executive Officer, SLFC, Inc., 1991 to June 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred Gottschalk, Ph.D. March 7, 1930 Trustee Chancellor (January 1996 to present), Professor and
c/o Firstar Corporation President, 1971 to 1995, Hebrew Union College-Jewish
425 Walnut Street Cincinnati, Ohio 45202 Institute of Religion.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert J. Hill, D.O. January 13, 1959 Trustee Physician, Ohio Valley Orthopaedic and Sports
c/o Firstar Corporation Medicine Institute, Inc. and Wellington Orthopaedics,
425 Walnut Street 1994 to present; Fellow Physician, Cleveland Clinic
Cincinnati, Ohio 45202 Foundation, 1993 to 1994.
- ------------------------------------------------------------------------------------------------------------------------------------
Dawn M. Hornback September 12, 1963 Trustee Founder, President and Chief Executive Officer of
c/o Firstar Corporation Observatory Group, Inc., August 1990 to present.
425 Walnut Street Observatory Group, Inc. is marketing communications firm
Cincinnati, Ohio 45202 specializing in the commercial, medical and educational
fields.
- ------------------------------------------------------------------------------------------------------------------------------------
Lawrence M. Turner March 23, 1947 Trustee Vice President and Treasurer, Kroger Company, 1986 to
c/o Firstar Corporation present. The Kroger Co. operates supermarkets and
425 Walnut Street Cincinnati, Ohio 45202 convenience stores and processes food.
- ------------------------------------------------------------------------------------------------------------------------------------
William H. Zimmer, III December 19, 1953 Trustee Executive Vice President & Chief Financial Officer,
c/o Firstar Corporation Advanced Communications Group, Inc., December 1998 to
425 Walnut Street present; Corporate Vice President, Cincinnati Bell, Inc.,
Cincinnati, Ohio 45202 1997 to 1998; Treasurer, Cincinnati Bell, Inc., 1991 to
present; Secretary, Cincinnati Bell, Inc. 1988 to 1997;
Assistant Treasurer, Cincinnati Bell, Inc., 1988 to 1991.
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel B. Benhase November 23, 1959 President Executive Vice President, Firstar Corporation since 1987.
Firstar Corporation
425 Walnut Street
Cincinnati, OH 45202
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph C. Neuberger April 4, 1962 Vice President Vice President, Firstar Mutual Fund Services, LLC, 1994
Firstar Mutual Fund Services, LLC to present.
615 E. Michigan Street
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------------------------
Michael T. Karbouski March 3, 1965 Treasurer Trust Officer, Firstar Mutual Fund Services, LLC, 1990 to
Firstar Mutual Fund Services, LLC present.
615 E. Michigan Street
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------------------------
Elaine E. Richards April 8, 1968 Secretary Trust Officer, Firstar Mutual Fund Services, LLC, June
Firstar Mutual Fund Services, LLC 1998 to present; Associate Attorney, Reinhart, Boerner,
615 E. Michigan Street Van Deuren, Norris & Rieselbach, s.c., Milwaukee,
Milwaukee, WI 53202 Wisconsin, 1995 to 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*<F57>This trustee is deemed to be an "interested person," as defined in the
1940 Act, of the Trust by virtue of his business relationship with the Fund's
investment adviser, and certain of its affiliates. The Student Loan Funding
Corporation and SLFC, Inc., of which Mr. Conlan is President and Chief Executive
Officer, purchase student loans from various financial institutions, including
the Fund's investment adviser and its affiliates. In addition, the Fund's
investment adviser extends credit from time to time to Student Loan Funding
Corporation and SLFC, Inc. to finance their operations.

COMPENSATION

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE PENSION OR ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS BENEFITS UPON FROM TRUST AND FUND
FROM TRUST**<F59> ACCRUED AS PART OF RETIREMENT COMPLEX PAID TO
TRUST EXPENSES TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas L. Conlan, Jr.*<F58> None None None None
Trustee
Dr. Alfred Gottschalk $11,000 None None $11,000
Trustee
Dr. Robert J. Hill $11,500 None None $11,500
Trustee
Dawn M. Hornback $11,000 None None $11,000
Trustee
Lawrence M. Turner $11,000 None None $11,000
Trustee
William H. Zimmer, III $11,500 None None $11,500
Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*<F58>This Trustee is deemed to be an interested person as defined in the 1940
Act.
**<F59>A portion of these fees were paid by the Market Capitalization Fund a
former Firstar Stellar Fund that was recently dissolved.

SALES LOADS

Unless a Trustee falls into one of the following categories, there are currently
no discounts available to Trustees on sales charges applied to shares of the
Fund. The following persons will not have to pay a sales charge on class A
shares:

0 Employees and retired employees of Firstar Bank (or Star Bank), or their
affiliates and members of their families (including parents, grandparents,
siblings, spouses, children, and in-laws) of such employees or retired
employees;

0 FirstarTrust customers of Firstar Corporation and its subsidiaries; and

0 nontrust customers of financial advisers.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------

CONTROL PERSON

For certain purposes, Firstar Bank, N.A. may be deemed to control the Fund
because it owns over 25% of the voting shares of the Fund and, as a result, will
be able to affect the outcome of certain matters presented for a vote of each of
the fund's shareholders. Firstar Bank serves as the investment adviser for the
Fund and also serves as custodian. Firstar Bank is located at 425 Walnut
Street, Cincinnati, Ohio 45202. Firstar Bank is a national association and is
whollyowned by Firstar Corporation. The table below shows the approximate
percentage of the Fund owned by Firstar Bank, N.A. as of March 1, 1999.

- --------------------------------------------------------------------------------
PERCENTAGE OWNED BY FIRSTAR BANK, N.A. C Shares Y Shares
- --------------------------------------------------------------------------------
Treasury Fund 88.91% 43.52%
- --------------------------------------------------------------------------------

PRINCIPAL HOLDERS

As of March 1, 1999, no one is deemed to be a principal holder of the Fund. A
principal holder is a person that beneficially owns 5% or more of the Fund's
outstanding equity securities.

MANAGEMENT OWNERSHIP

As of March 1, 1999, the officers and Trustees of the Trust own less than 1% of
the outstanding shares of the Fund.

INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------

ADVISER TO THE FUND

Firstar Bank's assets under management, including mutual funds have a market
value in excess of $ 12 billion. As part of its regular banking operations,
Firstar Bank may make loans to public companies. As a result, it may be
possible for the Fund to hold or acquire securities of companies that are also
lending clients of Firstar Bank. The lending relationship will not be a factor
in the selection of securities. Because of internal controls maintained by
Firstar Bank to restrict the flow of nonpublic information, Trust investments
are typically made without any knowledge of Firstar Bank's or its affiliates'
lending relationships with an issuer.

Firstar Bank 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.

Firstar Corporation is also the parent company to Firstar Investment Management
and Research Company, LLC ("FIRMCO"), a registered investment adviser. FIRMCO
serves as the investment adviser to the Firstar Fund, a separate family of fund
using the "Firstar" name.

ADVISORY FEES

For its advisory services, Firstar Bank receives an annual investment advisory
fee from the fund as described in the prospectus. For the fiscal years (or
period, as the case may be) ended November 30, 1996, 1997 and 1998 the Adviser
earned and was paid the following amounts.

- --------------------------------------------------------------------------------
Advisory fees earned
- --------------------------------------------------------------------------------
1996 1997 1998
- --------------------------------------------------------------------------------
Treasury Fund $3,586,051 $4,990,143 $6,734,607
- --------------------------------------------------------------------------------

BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------

The adviser is responsible for making decisions to buy and sell securities for
the Fund and for placing the Fund's securities. The adviser is also responsible
for negotiating the commissions to be paid on such transactions and allocating
portfolio transactions. The adviser seeks to obtain the best execution at the
best security price available with respect to each transaction. The best price
to a fund means the best net price without regard to the mix between purchase or
sale price and commission if any. While the adviser seeks reasonably
competitive commission rates, the Fund does not necessarily pay the lowest
available commission. Brokerage will not be allocated based on the sale of the
Fund's shares.

During the fiscal years (or period, as the case may be) ended November 30, 1996,
1997 and 1998, the Fund paid the following total brokerage commissions.

- --------------------------------------------------------------------------------
1996 1997 1998
- --------------------------------------------------------------------------------
Treasury Fund $0 $0 $0
- --------------------------------------------------------------------------------

(a)furnishing advice as to the value of securities, the availability of
investing, purchasing or selling securities and the availability of
securities or purchases or sellers of securities;

(b)furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of
accruals; and

(c)effecting securities transactions and performing functions incidental
thereto (such as clearance, settlement and custody).

In selecting broker or dealers, the adviser considers investment and market
information and other research, such as economic, securities and performance
measurement research provided by such brokers or dealers and the quality and
reliability of brokerage services, including execution capability, performance
and financial responsibility. Accordingly, the commissions charged by any such
broker or dealer may be greater than the amount another firm might charge if the
adviser determines in good faith that the amount of such commissions is
reasonable in relation to the value of the research information and brokerage
services provided by such brokers or dealers to the Fund. The adviser believes
that the research information received in this manner provides the Fund with
benefits by supplementing the research otherwise available to the Fund. Such
higher commissions will not be paid by the Fund unless:

(b) such payment is made in compliance with the provisions of Section 28(e) and
to other applicable state and federal laws; and

(c) in the opinion of the adviser, the total commissions paid by the Fund will
be reasonable in relation to the benefits to the Fund over the long term.

Although investment decisions for the Fund are made independently from those of
the other accounts managed by the adviser, investments of the type the Fund may
make may also be made by those other accounts. When the Fund 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 Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Fund.

ADMINISTRATIVE SERVICES

As of October 1, 1998, Firstar Mutual Fund Services, LLC, 615 East Michigan
Street, Milwaukee, Wisconsin 53202, a subsidiary of Firstar Bank, N.A.,
("Firstar"), provides administrative personnel and services to the Fund.
Firstar provides services such as legal compliance and accounting services.
Firstar provides these services at an annual rate of 0.11% of the average daily
net assets of the fund. Prior to October 1, 1998, Federated Administrative
Services provided administrative services to the Fund at an annual rate of 0.12%
of the fund's average daily net assets.

Edgewood Services, Inc. serves as sub-administrator to the Fund. For its
services, Edgewood is paid a fee by the Fund's administrator and is not paid by
the Fund. Over the last three fiscal years the Trust on behalf of the Fund paid
the following amount in administrative fees:

- --------------------------------------------------------------------------------
Fees Paid to: Federated Federated Federated Firstar
- --------------------------------------------------------------------------------
Fiscal year Fiscal year 12/1/97 - 10/1/98 -
ended 1996 ended 1997 9/30/98 11/30/98
- --------------------------------------------------------------------------------
Treasury Fund $717,407 $922,287 $1,270,147 $290,973

FUND ACCOUNTING AND DIVIDEND PAYING AGENT SERVICES
- --------------------------------------------------------------------------------

As of October 1, 1998, Firstar provides fund accounting personnel and services
to the Fund pursuant to a Fund Accounting Service Agreement. Under the Fund
Accounting Servicing Agreement, Firstar provides portfolio accounting services,
expense accrual and payment services, fund valuation and financial reporting
services, tax accounting services and compliance control services. Firstar
receives a fund accounting fee, for the Fund, which is billed on a monthly
basis. Firstar acts as the Fund's dividend paying agent. Federated Services
Company previously provided those services to the Fund.

CUSTODIAN
- --------------------------------------------------------------------------------

Firstar Bank, N.A., 425 Walnut Street, Cincinnati, OH 45202, is custodian for
the cash and securities of the Fund. Under the Custodian Agreement, Firstar
Bank holds the Fund's portfolio securities in safekeeping and keeps all
necessary records and documents relating to its duties. The custodian receives
an annual fee equal to 0.025% of the Fund's average daily net assets.

DISTRIBUTION PLAN
- --------------------------------------------------------------------------------

As noted in the Fund's prospectus, the Trust on behalf of the Fund has adopted a
Rule 12b1 Plan, as amended and restated, pursuant to Rule 12b-1 promulgated by
the SEC pursuant to the 1940 Act (the "Plan"). The Plan was adopted to
facilitate the sale of a sufficient number of shares to allow the Fund to
achieve economic viability. The Plan is a compensation type of Plan that
provides the Trust the ability to use assets of the Fund to pay securities
dealers, financial institutions and other industry professionals ("shareholder
service organizations") to finance any activity that is principally intended to
result in the sale of the Fund's shares subject to the Plan. Such activities may
include:

o the advertising and marketing of shares of the Fund;
o preparing, printing, and distributing prospectuses and sales literature to
prospective shareholders, brokers, or administrators; and
o implementing and operating the Plan.

The distributor may pay fees to brokers and others for such services. As of
April 1, 1999, Edgewood Services, Inc., Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, became the distributor for the Fund. From October 1,
1998 to March 31, 1999, B.C. Ziegler and Company, 215 North Main Street, West
Bend, Wisconsin 53095, served as the Fund's distributor. Prior to that,
Federated Securities Corporation, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, provided distribution services to the Fund.

In compensation for the services provided pursuant to this Plan, Edgewood
Services, Inc. will be paid a monthly fee computed at the annual rate of up to
0.25% of the average aggregate net asset value of shares of the Fund held during
the month. The Plan provides that the only shares of the Fund subject to the
accrual and payment of Rule 12b1 fees are the Fund in which there is Y class of
shares. Although Class Y shares are not subject to Rule 12b1 fees, Classes A, B
or C shares within the particular fund are subject to the fees. Class C of the
Treasury Fund is paying Rule 12b1 fees because a Y class of shares exists in the
fund.

The Trust's Board of Trustees, including all of the independent Trustees as
defined in the 1940 Act, has approved the Plan. The Board of Trustees has
determined that a consistent cash flow resulting from the sale of new shares is
necessary and appropriate to meet redemptions and to take advantage of buying
opportunities without having to make unwarranted liquidations of portfolio
securities. The Board of Trustees believes, therefore, that it will benefit the
Fund to have monies available for the direct distribution activities of the
distributor in promoting the sale of the Fund's shares. Furthermore, having
money available will avoid any uncertainties as to whether other payments by the
Fund constitute distribution expenses on behalf of the Fund. The Plan must be
renewed annually by the Board of Trustees, including a majority of the
independent Trustees who have no direct or indirect financial interest in the
operation of the Plan, cast in person at a meeting called for that purpose. It
is also required that the independent Trustees select and nominate other
independent Trustees.

The Plan and any related agreement may not be amended to materially increase the
amounts to be spent for distribution expenses without approval by a majority of
the Fund's outstanding shares. All material amendments to the Plan or any
related agreements must be approved by a vote of the independent Trustees, cast
in person at a meeting called for the purpose of voting on any such amendment.

With the exception of Firstar Bank, in its capacity as the Fund's investment
adviser, and Edgewood Services Inc., in its capacity as distributor of the
Fund's shares, no "interested person" of the Fund, as defined in the 1940 Act,
and no trustee of the Fund who is not an "interested person" has or had a direct
or indirect financial interest in the Plan or any related argument.

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

The net asset value generally changes each day. The days on which the net asset
value is calculated by the Fund are described in the prospectus. Dividend
income is recorded on the ex-dividend date, except that certain dividends from
foreign securities where the ex-dividend date may have passed, are recorded as
soon as the Fund are informed of the ex-dividend date.

DETERMINING MARKET VALUE OF SECURITIES
- --------------------------------------------------------------------------------

Market or fair values of the Fund's portfolio securities are determined as
follows:

1.For equity securities: according to the last sale price on a national
securities exchange, if applicable.

2.In the absence of recorded sales for listed equity securities: according to
the mean between the last closing bid and asked prices.

3.For unlisted equity securities: latest bid prices.

4.For bonds and other fixed-income securities: as determined by an independent
pricing service.

5.For short-term obligations: according to the mean between bid and asked
prices as furnished by an independent pricing service.

6.For short-term obligations with remaining maturities of 60 days or less at
the time of purchase: at amortized cost.

7.For all other securities: at fair value as determined in good faith by the
Trustees.

TRADING IN FOREIGN SECURITIES
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. In computing the net asset value, the
Fund value foreign securities at the latest closing price on the exchange on
which they are traded immediately prior to the closing of the New York Stock
Exchange. Certain foreign currency exchange rates may also be determined at the
latest rate prior to the closing of the New York Stock Exchange. Foreign
securities quoted in foreign currencies are translated into U.S. dollars at
current rates. Occasionally, events that affect these values and exchange rates
may occur between the times at which they are determined and the closing of the
New York Stock Exchange. If such events materially affect the value of
portfolio securities, these securities may be valued at their fair value as
determined in good faith by the underlying fund's board of directors, although
the actual calculation may be done by others.

PURCHASE, EXCHANGE AND PRICING OF SHARES
- --------------------------------------------------------------------------------

Except in initial circumstances as described in the prospectus, shares of the
Fund are sold at their net asset value plus a sales charge, on days 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.
CLASS C AND CLASS Y SHARES

Class C and Class Y shares are sold at their net asset value and do not have
sales charges or contingent deferred sales charges. See the prospectus for more
information.

EXCHANGE PRIVILEGE

Shareholders may exchange shares by telephone or in writing as follows:

Telephone In Writing
- --------- ----------
You may exchange shares by telephone You may send your exchange request in
only if the shareholders registered writing. Please provide the fund name
on your account are the same and account number for each of the Fund
shareholders registered on the account involved in the exchange and make sure
into which you are exchanging. Exchange the letter of instruction is signed by
requests must be received before all shareholders on the account.
3:30 p.m. (Eastern time) to be
processed that day.

Each class of shares may be exchanged as follows:

o Holders of Class C or Y shares of any of the Firstar Stellar Funds may
exchange such shares for Class C or Y shares of any other Firstar Stellar
Funds at net asset value.

o Holders of Class B shares of any Firstar Stellar Fund may exchange such
shares for Class B or C shares of any other Firstar Stellar Fund at net
asset value.

o Holders of Class A shares of any Firstar Stellar Fund may exchange such
shares for Class A or C shares of any other Firstar Stellar Fund at net
asset value plus the difference (if any) between the sales charge already
paid on the shares of the fund which are being exchanged out of, and any
sales charge imposed by the fund which is being exchanged into. In all
cases, shareholders will be required to pay a sales charge only once.

Shares are exchanged at their net asset values. However, additional fees may
apply to class A and B shares as noted in the table below.

- --------------------------------------------------------------------------------
A to A Exchange
- --------------------------------------------------------------------------------
When you exchange Class A shares of a fund for Class A shares of another fund,
you will have to pay the difference between the fund's sales charge you already
paid and the sales charge of the fund into which you are entering.

- --------------------------------------------------------------------------------
A to C Exchange
- --------------------------------------------------------------------------------
When you exchange Class A shares of a fund for Class C shares of another fund,
the Class A shares retain their charge to be exercised in further exchanges.
If you later re-exchange the C shares that you obtained from the AC exchange,
you would exchange at the NAV plus the difference between the sales charge
initially paid and the sales charge of the fund into which you are entering.

- --------------------------------------------------------------------------------
B to B Exchange / B to C Exchange
- --------------------------------------------------------------------------------
When you exchange Class B shares of a fund for Class B or C shares of another
fund, no sales charges are assessed at the time of the exchange. However, if
you redeem shares within 5 years of the original purchase, a CDSC will be
imposed according to the original purchase date.

EXCHANGING SECURITIES FOR FUND SHARES

The Fund may accept securities in exchange for shares. The Fund will allow such
exchanges only upon the prior approval of the particular fund and a
determination by the fund and the Adviser that the securities to be exchanged
are acceptable.

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 fund, along with
the securities.

SHAREHOLDER SERVICES PLAN

Shareholder service organizations are nonaffiliated banks and broker/dealers
that provide certain support and distribution services to their customers who
are the beneficial owners of the Fund's shares. Generally, the services
provided include assisting customers in processing purchase, exchange and
redemption requests, although the services vary according to the specific
agreement. Shareholder service organizations are record owners of the shares of
the Fund and are responsible for promptly transmitting orders. The
organizations may charge their customers for services relating to their
investment in the Fund. If you are a customer of a shareholder service
organization, carefully read your account agreement together with the Fund's
prospectus with regard to services provided, fees charged and any restrictions
imposed.

o establish and maintain shareholder accounts and records;

o process purchase and redemption transactions and automatic investments of
client account cash balances;

o answer routine client inquiries; and

o assist clients in changing dividend options, account designations and
addresses.

CONVERSION TO FEDERAL FUND

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 fund or be converted into federal fund. Firstar Bank acts as the
shareholder's agent in depositing checks and converting them to federal fund.

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

REDEMPTION IN KIND

Although the Trust 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 respective Fund's portfolio. To satisfy
registration requirements in a particular state, redemption in kind will be made
in readily marketable securities to the extent that such securities are
available. If the state's policy changes, the Fund 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 18f1 under the 1940 Act 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 class' net asset value during any 90-day
period.

REDEMPTION IN WRITING

To redeem shares, shareholders may send a written request to:

Firstar Stellar Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

The written letter of instructions must include:

o the shareholder(s)' name,

o the fund name,

o the account number,

o the share or dollar amount to be redeemed, and

o signatures by all shareholders on the account.

The proceeds will be wired to the bank account of record or sent to the address
of record within seven calendar days.

o a trust company or commercial bank whose deposits are insured by the BIF,
which is administered by the FDIC;

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

o a savings bank or savings association whose deposits are insured by the
SAIF, which is administered by the FDIC; or

o 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.

TAX STATUS
- --------------------------------------------------------------------------------

THE TRUST'S TAX STATUS

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

o invest in securities within certain statutory limits; and

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

In the event the Trust fails to qualify as a "regulated investment company," it
will be treated as a regular corporation for federal income tax purposes.
Accordingly, the Trust would be subject to federal income taxes and any
distributions made by the Fund would be taxable and non-deductible by the Trust.
This would increase the cost of investing in the Fund for shareholders and would
make it more economical for shareholders to invest directly in securities held
by the Fund instead of investing indirectly in such securities through the Fund.

CAPITAL GAINS

Shareholders will pay federal tax at long-term capital gain rates on long-term
capital gains distributed to them regardless of how long they have held fund
shares.

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

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.

UNDERWRITERS
- --------------------------------------------------------------------------------

DISTRIBUTION OF SECURITIES

The Fund paid the following amounts under the Rule 12b1 Plan to Federated
Securities Corporation during the last three fiscal years. As of October 1,
1998, B.C. Ziegler and Company served as the principal distributor for the Fund
from October 1, 1998 to March 31, 1999. The amounts paid by the Fund to B.C.
Ziegler and Company and retained during the fiscal year ended November 30, 1998
are shown on the next table.

<TABLE>
- --------------------------------------------------------------------------------------------------
Fiscal Year 1996 Fiscal Year 1997 12/1/97 - 9/30/98
Fees Paid to Federated Total Amount Total Amount Total Amount
commission retained commission retained commission retained
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Treasury Fund 0 0 $202,834 0 $539,210 0
- --------------------------------------------------------------------------------------------------
</TABLE>

- ----------------------------------------------------------
10/1/98 - 11/30/98
Fees Paid to B.C. Ziegler Total Amount
commissions retained
- ----------------------------------------------------------
Treasury Fund $125,705 0
- ----------------------------------------------------------

CALCULATION OF PERFORMANCE DATA
- --------------------------------------------------------------------------------

The Fund's performance or return may be shown in the form of various performance
figures. The Fund's performance figures are based upon historical results and
are not necessarily representative of future performance. Factors affecting the
Fund's performance include general market conditions, generating expenses, the
imposition of sales charges and investment management.

YIELD -- MONEY MARKET FUND

Yields for the money market fund are calculated daily based upon the seven days
ending on the day of the calculation, called the "base period." This yield is
computed by:

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 the fund,
the performance will be reduced for those shareholders paying those fees. The
yields for the 7-day period ended November 30, 1998 were as follows:

- --------------------------------------------------------------------------------
YIELDS FOR 7-DAY PERIOD ENDING 11/30/98 C SHARES Y SHARES
- --------------------------------------------------------------------------------
Treasury Fund 3.93% 4.08%
- --------------------------------------------------------------------------------

EFFECTIVE YIELD -- MONEY MARKET FUND

The effective yield for the money market fund 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.

The effective yields for the 7-day period ended November 30, 1998 were as
follows:

- --------------------------------------------------------------------------------
EFFECTIVE YIELDS FOR 7-DAY PERIOD ENDING 11/30/98 C SHARES Y SHARES
- --------------------------------------------------------------------------------
Treasury Fund 4.01% 4.17%
- --------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURNS

n
P(1+T) = ERV

Where P = a hypothetical initial payment of $1,000.

T = average annual total return.

n = number of years.

ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the stated periods at the end of the stated periods.

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS SINCE INCEPTION
ENDED 11/30/98 1 YEAR 5 YEARS 10 YEARS (INCEPTION DATE)
- --------------------------------------------------------------------------------
Treasury Fund C Shares 4.69% 4.57% N/A 4.94%
Y Shares 4.84% N/A N/A 4.88%
- --------------------------------------------------------------------------------

PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------

The performance of the Fund's shares 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 performance of the Fund's shares 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 the fund, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices that the Fund use in advertising may include:

o LIPPER ANALYTICAL SERVICES, INC., ranks the fund 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, the appropriate fund will quote its Lipper ranking
in the "growth" category in advertising and sale 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 fund of all types, according to their risk-adjusted returns.
The maximum rating is five stars, and ratings are effective for two weeks.

o MONEY, a monthly magazine, regularly ranks money market fund in various
categories based on the latest available seven-day compound (effective)
yield. From time to time, the appropriate fund will quote its Money ranking
in advertising and sales literature. This magazine could be used to compare
the performances of the TREASURY FUND.

o SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days. This index could be used to compare the performance of
the TREASURY FUND.

o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market fund
weekly. Donoghue's Money Market Insight publication reports monthly and 12
month-to-date investment results for the same money fund. This report could
be used to compare the performances of the TREASURY FUND.

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

Advertisements may quote performance information that does not reflect the
effect of the contingent deferred sales charge.

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. In addition, share classes can
compare their performance, or performance for the types of securities in which
they 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's 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.

INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------

Arthur Andersen LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin, 53202,
serves as the independent public accountants for the Fund. Their services
include examination of the Fund's financial statements and the performance of
other related audit and tax services.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The Fund's audited financial statements are incorporated by reference to the
Fund's Annual Reports for the fiscal year ended November 30, 1998 as filed with
the SEC.

APPENDIX
- --------------------------------------------------------------------------------