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M.S.D. & T. FUNDS, INC.
(THE "COMPANY")
INSTITUTIONAL SHARES
VALUE EQUITY FUND, INTERNATIONAL
EQUITY FUND, INTERMEDIATE FIXED
INCOME FUND AND MARYLAND
TAX-EXEMPT BOND FUND
SUPPLEMENT DATED FEBRUARY 23, 1996
TO THE PROSPECTUS DATED
SEPTEMBER 29, 1995
On February 16, 1996, Dunedin Fund Managers, Ltd ("Dunedin"), the current
sub-adviser to the Company's International Equity Fund (the "Fund"), announced
that it was being acquired by Edinburgh Fund Managers Group plc. The
acquisition, which is expected to be completed on or about March 19, 1996,
will result in the automatic termination of Dunedin's sub-advisory agreement
with Mercantile Safe-Deposit & Trust Company ("Mercantile"), the Fund's
adviser, with respect to the Fund. Mercantile has informed the Company that it
is developing a recommendation for a successor sub-adviser to the Fund and
expects to be able to present its recommendation to the Board of Directors
before March 19, 1996. The appointment of a successor sub-adviser will be
subject to approval by the shareholders of record of the Fund at a meeting to
be held as soon as practicable thereafter.
The Company has been advised that Douglas Thomson, the Fund's current
portfolio manager and the person primarily responsible for its day-to-day
operations, will continue to manage the Fund until a successor sub-adviser has
been appointed. Mr. Thomson, a Director of Dunedin's Investment Management
Group, has been associated with Dunedin for over nine years.
