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M.S.D.& T. FUNDS, INC.
Prime Money Market Fund, Government Money Market Fund,
Limited Maturity Bond Fund and Total Return Bond Fund
Supplement dated February 4, 1999 to Prospectus
Dated September 30, 1998
The paragraph under the heading "Investment Objectives, Policies and Risks--
Other Investment Policies and Related Risks--Other Investment Companies" on
page 13 of the Prospectus is deleted and replaced by the following paragraph:
. Other Investment Companies. In connection with the management of its daily
cash position, each Fund may invest in securities issued by other investment
companies which invest in eligible quality, short-term debt securities, whether
taxable or tax-exempt, and which seek to maintain a $1.00 net asset value per
share, i.e., "money market" funds. In addition, the Limited Maturity Bond Fund
and Total Return Bond Fund may invest in securities issued by other non-money
market investment companies that invest in the types of securities in which the
Fund itself is permitted to invest. Investments in securities issued by other
investment companies will be subject to the requirements of applicable
securities laws. When a Fund invests in another investment company, it pays a
pro rata portion of the advisory and other expenses of that company as one of
its shareholders. These expenses are in addition to the Fund's own expenses.
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M.S.D.& T. FUNDS, INC.
TAX-EXEMPT MONEY MARKET FUND, MARYLAND TAX-EXEMPT BOND FUND,
INTERMEDIATE TAX-EXEMPT BOND FUND AND NATIONAL TAX-EXEMPT BOND FUND
SUPPLEMENT DATED FEBRUARY 4, 1999 TO PROSPECTUS
DATED SEPTEMBER 30, 1998
The paragraph under the heading "Investment Objectives, Policies and Risks--
Other Investment Policies and Related Risks--Other Investment Companies" on
page 12 of the Prospectus is deleted and replaced by the following paragraph:
. Other Investment Companies. In connection with the management of its daily
cash position, each Fund may invest in securities issued by other investment
companies which invest in eligible quality, short-term debt securities, whether
taxable or tax-exempt, and which seek to maintain a $1.00 net asset value per
share, i.e., "money market" funds. In addition, each Fund except the Tax-Exempt
Money Market Fund may invest in securities of other non-money market investment
companies that invest in the types of securities in which the Fund itself is
permitted to invest. Investments in securities by other investment companies
will be subject to the requirements of applicable securities laws. When a Fund
invests in another investment company, it pays a pro rata portion of the
advisory and other expenses of that company as one of its shareholders. These
expenses are in addition to the Fund's own expenses.
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M.S.D.& T. FUNDS, INC.
GROWTH & INCOME FUND, EQUITY INCOME FUND, EQUITY GROWTH FUND,
INTERNATIONAL EQUITY FUND AND DIVERSIFIED REAL ESTATE FUND
SUPPLEMENT DATED FEBRUARY 4, 1999 TO PROSPECTUS
DATED SEPTEMBER 30, 1998
The paragraph under the heading "Investment Objectives, Policies and Risks--
Other Investment Policies and Related Risks--Other Investment Companies" on
page 12 of the Prospectus is deleted and replaced by the following paragraph:
. Other Investment Companies. In connection with the management of its daily
cash position, each Fund may invest in securities issued by other investment
companies which invest in eligible quality, short-term debt securities, whether
taxable or tax-exempt, and which seek to maintain a $1.00 net asset value per
share, i.e., "money market" funds. In addition, each Fund may invest in
securities issued by other non-money market investment companies that invest in
the types of securities in which the Fund itself is permitted to invest.
Investments in securities issued by other investment companies will be subject
to the requirements of applicable securities laws. When a Fund invests in
another investment company, it pays a pro rata portion of the advisory and
other expenses of that company as one of its shareholders. These expenses are
in addition to the Fund's own expenses.
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M.S.D. & T. FUNDS, INC.
GROWTH & INCOME FUND, EQUITY INCOME FUND, EQUITY GROWTH FUND,
INTERNATIONAL EQUITY FUND, DIVERSIFIED REAL ESTATE FUND,
TAX-EXEMPT MONEY MARKET FUND, MARYLAND TAX-EXEMPT BOND FUND,
INTERMEDIATE TAX-EXEMPT BOND FUND, NATIONAL TAX EXEMPT BOND FUND,
PRIME MONEY MARKET FUND, GOVERNMENT MONEY MARKET FUND,
LIMITED MATURITY BOND FUND AND TOTAL RETURN BOND FUND
SUPPLEMENT DATED FEBRUARY 4, 1999 TO STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 30, 1998
The paragraph under the heading "Investment Objectives and Policies -
Additional Information on Investment Policies - Other Investment Companies" on
page 16 of the Statement of Additional Information is deleted and replaced by
the following paragraph:
Other Investment Companies
In accordance with their respective investment objectives and
policies, each Fund may invest in securities issued by other investment
companies within the limits prescribed by the 1940 Act. Each Fund currently
intends to limit its investments so that, as determined immediately after a
securities purchase is made: (a) not more than 5% of the value of its total
assets will be invested in the securities of any one investment company; (b) not
more than 10% of the value of its total assets will be invested in the aggregate
in securities of investment companies as a group; and (c) not more than 3% of
the outstanding voting stock of any one investment company will be owned by the
Fund or by the Company as a whole. As a shareholder of another investment
company, a Fund would bear, along with other shareholders, its pro rata portion
of the other investment company's expenses, including advisory fees. These
expenses would be in addition to the advisory and other expenses that a Fund
bears in connection with its own operations.
