<PAGE>
Supplement dated October 17, 1995 to the Prospectus dated March 31, 1995 of
Quest Cash Reserves, Inc. offered through Unified Management Corporation.
The following change is made to the section "Additional Information - Minimums".
The minimum account balance of $500 applies to all accounts whether maintained
directly with the Fund or through a brokerage firm or other financial
institution. The Fund may close accounts that fall below the $500 minimum upon
60 days notice to the shareholder.
<PAGE>
QUEST CASH RESERVES.....................
-----------------------
[LOGO] with investment objectives of
SAFETY - LIQUIDITY - INCOME
Quest Cash Reserves (the "Fund") is a money market fund with five distinct
Portfolios--the Primary Portfolio, the Government Portfolio, the General
Municipal Portfolio, the California Municipal Portfolio and the New York
Municipal Portfolio (the "Portfolios"). This prospectus pertains to the first
three Portfolios; prospectuses pertaining to each of the California and New York
Municipal Portfolios can be obtained by contacting Unified Management
Corporation.
Safety of principal is sought by investing in securities which are selected
for their high quality, liquidity and stability of principal. A security at the
time of purchase cannot have a maturity exceeding thirteen months, and the
average weighted maturity of all securities in the Portfolio cannot exceed 90
days. Such a short average maturity enhances the ability of each Portfolio to
provide both liquidity and stability of value to you and your fellow
shareholders. WHILE EACH PORTFOLIO SEEKS TO MAINTAIN (AND HAS MAINTAINED) ITS
SHARE PRICE AT $1.00, INVESTMENTS IN THE PORTFOLIOS ARE NOT GUARANTEED OR
INSURED BY THE U.S. GOVERNMENT AND THERE IS NO ASSURANCE THAT A PORTFOLIO WILL
MAINTAIN A CONSTANT PRICE OF $1.00 PER SHARE.
IS QUEST CASH RESERVES FOR YOU?
The Fund is designed for individuals, institutions, advisors, custodians,
charities, fiduciaries and corporations who can benefit from a fund seeking
maximum current income--and who place value on an investment having safety of
principal, liquidity, stability, simplicity, and convenience. The availability
of five separate Portfolios provides you with the advantage of selecting a
combination of investment characteristics particularly suitable to your needs.
The three Portfolios described in this Prospectus compare to one another as
follows:
<TABLE>
<S> <C> <C>
Primary Portfolio -- highest money market income; conservative investments
Government Portfolio -- high money market income; very conservative investments
General Municipal -- highest money market tax-exempt income; conservative investments
Portfolio
</TABLE>
<TABLE>
<S> <C>
MAJOR FEATURES AND SERVICES OF QUEST CASH RESERVES
No withdrawal fees or penalties Same day funds for withdrawals
Daily dividends Withdrawals by check, telephone and mail
Low investment minimums Free checkwriting ($250 minimum per check)
($1,000 initial, $100 subsequent)
</TABLE>
<PAGE>
EXPENSE INFORMATION
The expense summary format below was developed for use by all mutual funds
to help investors understand the various direct costs and expenses related to a
fund investment.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES (FOR EACH PORTFOLIO)
<S> <C>
Sales Load Imposed on Purchases.............................. None
Sales Load Imposed on Reinvested Dividends................... None
Redemption Fees.............................................. None
</TABLE>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF EACH PORTFOLIO'S AVERAGE NET ASSETS)
<S> <C> <C> <C>
GENERAL
PRIMARY GOVERNMENT MUNICIPAL
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------- ------------
Management fees............................ .41% .49% .49%
12b-1 (Distribution Plan) expenses......... .25% .25% .25%
Other Expenses............................. .25% .23% .26%
--
--- ---
Total Operating Expenses................... .91% .97% 1.00%
</TABLE>
During the fiscal year ended November 30, 1994 the Advisor voluntarily
waived part of its advisory fee with respect to the Government Portfolio and the
General Municipal Portfolio in order to maintain a competitive yield. After
giving effect to such waivers, the management fees for the Government Portfolio
and the General Municipal Portfolio were .47% and .38% respectively and the
total operating expenses were .95% and .90%, respectively. Such advisory fee
waivers are voluntary and may be discontinued at any time, except that the
Advisor has agreed to assume expenses of any Portfolio in excess of 1.00% in any
fiscal year. Accordingly, the expenses listed for the General Municipal
Portfolio have been restated to reflect the Advisor's agreement to assume
expenses in excess of 1.00%. In addition, the expense information has been
restated to reflect the reduction in the 12b-1 expenses for each Portfolio from
.30% of average net assets to .25% of average net assets, effective March 31,
1995, and an increase in administrative expenses.
The following table illustrates the expenses that an investor would pay on a
hypothetical $1,000 investment in each of the Portfolios assuming a 5% annual
return (cumulatively through the end of each time period). Neither the 5% return
nor the estimated expenses should be considered an indication of actual or
expected performance or expenses, both of which may vary.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Primary Portfolio..................................... $ 9.29 $29.02 $50.39 $111.96
Government Portfolio.................................. 9.90 30.90 53.63 118.97
General Municipal Portfolio........................... 10.20 31.84 55.24 122.46
</TABLE>
2
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The financial information presented below has been audited by Price
Waterhouse LLP, independent accountants, whose unqualified report thereon
appears in the Statement of Additional Information ("SAI"). Investors should
understand that all the following information should be read in conjunction with
the financial statements and related notes thereto appearing in the SAI.
<TABLE>
<CAPTION>
DIVIDENDS AND
INCOME FROM DISTRIBUTIONS
INVESTMENT OPERATIONS -----------------------------------------------
------------------------------------------ DIVIDENDS TO DISTRIBUTIONS DISTRIBUTIONS
NET ASSET NET REALIZED SHAREHOLDERS TO TO
VALUE, NET GAIN (LOSS) TOTAL FROM FROM NET SHAREHOLDERS SHAREHOLDERS
BEGINNING INVESTMENT ON SECURITY INVESTMENT INVESTMENT FROM OTHER FROM NET
OF PERIOD INCOME TRANSACTIONS OPERATIONS OPERATIONS SOURCES REALIZED GAINS
<S> <C> <C> <C> <C> <C> <C> <C>
PRIMARY PORTFOLIO
Year ended November 30,
1994.................. $ 1.00 $ 0.032 $ 0.000 (1) $ 0.032 (0.032) $ (0.000)(1) $ (0.000)(1)
1993.................. 1.00 0.024 0.000 (1) 0.024 (0.024) (0.000)(1) (0.000)(1)
1992.................. 1.00 0.033 0.000 (1) 0.033 (0.033) -- (0.000)(1)
1991.................. 1.00 0.057 (0.000)(1) 0.057 (0.057) -- --
December 13, 1989 (3)
to November 30,
1990.................. 1.00 0.073(4) 0.000 (1) 0.073 (0.073) -- (0.000)(1)
<CAPTION>
RATIO TO AVERAGE
NET ASSETS
NET ASSETS, ------------------------------------
NET ASSET END OF NET NET
VALUE, END PERIOD OPERATING INVESTMENT
OF PERIOD TOTAL RETURN* (MILLIONS) EXPENSES INCOME
<S> <C> <C> <C> <C> <C>
PRIMARY PORTFOLIO
Year ended November 30
1994.................. $ 1.00 3.26% $1,453.8 0.91%(2) 3.21%(2)
1993.................. 1.00 2.44% 1,413.9 0.90% 2.41%
1992.................. 1.00 3.38% 1,168.3 0.88% 3.34%
1991.................. 1.00 5.89% 1,249.0 0.86% 5.74%
December 13, 1989 (3)
to November 30,
1990.................. 1.00 7.80%(5) 1,244.2 0.87%(4,5) 7.47%(4,5)
</TABLE>
(1) Less than $.0005 per share.
(2) Average net assets for the year ended November 30, 1994 were $1,485,963,121.
(3) Commencement of operations.
(4) Reflects a voluntary waiver of $.00004 per share in advisory fees. Had such
waiver not occurred, the net operating expense and net investment income
ratios would have been 0.88% and 7.46%, respectively.
(5) Annualized.
GOVERNMENT PORTFOLIO
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended November 30,
1994............... $1.00 $0.031(1) $0.000(2) $0.031 $(0.031) $(0.000)(2) -- $1.00
1993............... 1.00 0.022 -- 0.022 (0.022) (0.000)(2) -- 1.00
1992............... 1.00 0.032(1) 0.000(2) 0.032 (0.032) -- $(0.000)(2) 1.00
1991............... 1.00 0.055(1) -- 0.055 (0.055) -- -- 1.00
February 14, 1990 (4)
to November 30, 1990.. 1.00 0.059(1) 0.000(2) 0.059 (0.059) -- (0.000)(2) 1.00
Year ended November
1994............... 3.12% $113.2 0.95%(1,3) 3.08%(1,3)
1993............... 2.26% 127.9 1.00% 2.24%
1992............... 3.24% 131.7 0.93%(1) 3.23%(1)
1991............... 5.69% 142.2 0.84% 5.62%(1)
February 14, 1990 (4)
(to November 30,
1990............... 7.67%(5) 150.1 0.67%(1,5) 7.34%(1,5)
</TABLE>
(1) Reflects a voluntary waiver of $.0002, $.0002 and $.001 per share,
respectively, in advisory fees and $.004 per share in advisory fees and
reimbursement of other operating expenses, respectively, in effect during
each period. Had such waivers and reimbursements not occurred, the ratio of
net operating expenses would have been 0.97%, 0.94%, 0.92% and 1.19%,
respectively and the ratio of net investment income would have been 3.06%,
3.22%, 5.54% and 6.82%, respectively.
(2) Less than $.0005 per share.
(3) Average net assets for the year ended November 30, 1994 were $128,148,811.
(4) Commencement of operations.
(5) Annualized.
GENERAL MUNICIPAL PORTFOLIO
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended November 30,
1994............... $1.00 $0.020(1) $0.000 (2) $0.020 $(0.020) -- -- $1.00
1993............... 1.00 0.017(1) (0.000)(2) 0.017 (0.017) -- -- 1.00
1992............... 1.00 0.026(1) (0.000)(2) 0.026 (0.026) -- -- 1.00
1991............... 1.00 0.042(1) 0.000 (2) 0.042 (0.042) -- -- 1.00
February 14, 1990 (4)
to November 30,
1990............... 1.00 0.042(1) (0.000)(2) 0.042 (0.042) -- -- 1.00
Year ended November
1994............... 2.04% $108.7 0.90%(1,3) 2.01%(1,3)
1993............... 1.74% 109.7 0.98%(1) 1.73%(1)
1992............... 2.66% 112.9 0.90%(1) 2.62%(1)
1991............... 4.24% 100.1 0.88%(1) 4.20%(1)
February 14, 1990 (4)
(to November 30,
1990............... 5.45%(5) 107.9 0.71%(1,5) 5.32%(1,5)
</TABLE>
(1) Reflects a voluntary waiver of $.001, $.0003, $.001, $.001 and $.002 per
share, respectively, in advisory fees in effect during each period. Had such
waivers not occurred. the ratio of net operating expenses would have been
1.01%, 1.01%, 1.00%, 0.98% and 1.00%, respectively and the ratio of net
investment income would have been 1.90%, 1.70%, 2.52%, 4.10% and 5.03%,
respectively.
(2) Less than $.0005 per share.
(3) Average net assets for the year ended November 30, 1994 were $116,312,932.
(4) Commencement of operations.
(5) Annualized.
* Assumes reinvestment of all dividends and distributions.
3
<PAGE>
QUEST CASH RESERVES--PRIMARY PORTFOLIO
INVESTMENT OBJECTIVES AND POLICIES
The Primary Portfolio's investment objectives are--in the following order of
priority--safety of principal, liquidity, and maximum current income from money
market securities to the extent consistent with the first two objectives. As a
matter of fundamental policy, the Primary Portfolio pursues its objectives by
maintaining a diversified portfolio of high quality money market securities of
the types described in the succeeding section, all of which at the time of
investment have remaining maturities of thirteen months or less. While the
Portfolio may not change this policy or the other "fundamental investment
policies" described below without shareholder approval, it may, upon notice to
shareholders but without such approval, change its other investment policies. As
is true with all investment companies, there can be no assurance that the
Primary Portfolio's objectives will be achieved.
MONEY MARKET SECURITIES
The money market securities in which the Primary Portfolio invests are (1)
marketable obligations of, or guaranteed by, the United States Government, its
agencies or instrumentalities (collectively "U.S. Government Securities"); (2)
U.S. dollar-denominated certificates of deposit and bankers' acceptances of
prime quality issued or guaranteed by, and interest-bearing time deposits
maintained at, (a) U.S. banks or savings and loan associations having total
assets of more than $1 billion and which are insured under the administration of
the Federal Deposit Insurance Corporation ("FDIC"), (b) foreign branches of such
U.S. institutions, and (c) U.S. or foreign branches of foreign banks having
total assets of at least $1 billion; (3) domestic or foreign commercial paper of
prime quality and participation interests in loans of equivalent quality
extended by banks to such companies; and (4) repurchase agreements that are
collateralized in full each day by U.S. Government Securities. For the purposes
of this prospectus, prime quality shall mean the security (or the issuer for a
comparable security) is rated in one of the two highest rating categories for
short term debt obligations by any two of Standard & Poor's Corporation ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), Fitch Investors Service, Inc.
("Fitch"), Duff & Phelps, Inc. ("Duff") or Thomson BankWatch, Inc., or
by one of such rating agencies if only one rating agency has issued a
rating with respect to the security, or, if not rated, judged by Quest
for Value Advisors (the "Advisor") pursuant to criteria adopted by the
Fund's Board of Directors to be of comparable quality.
In further regard to items (2) and (3) above, investments by the Primary
Portfolio which do not satisfy one of the following requirements are limited in
the aggregate to 5% of the Portfolio's total assets in regard to issues and to
1% of total assets (or $1 million if greater) in regard to any one issuer of
such issues: (i) issues rated in the highest category (or the issuer is so rated
for a comparable security) by at least two of the above-listed rating agencies;
or (ii) if rated only by one agency, rated in the highest category; or (iii) if
unrated, determined by the Board of Directors to be of quality comparable to
issues which qualify under (i) or (ii).
Certificates of deposit represent the obligation of a bank to repay funds
deposited with it for a specified period of time. Bankers' acceptances are
short-term collateralized credit instruments drawn on and evidencing the
obligation of a bank to pay the value at maturity. Commercial paper consists of
unsecured promissory notes issued by corporations to finance short-term credit
needs. Participation interests are undivided beneficial interests in loans
giving the purchaser the right to receive a pro rata share of a loan's cash
flow. Repurchase agreements are contracts under which the buyer acquires a
security subject to the obligation of the seller to repurchase at a fixed price,
usually within one week. The Fund enters into such agreements only with
4
<PAGE>
"primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. Government Securities and with the Fund's Custodian. The Fund could
experience a loss in the event of its failure to realize full value upon
collateral liquidation required by a dealer's default. Though investments in
obligations of foreign issuers may be higher yielding than those of domestic
issuers, they may involve certain different risks such as exchange control
regulations; limited availability of information about the issuer; differences
in accounting, auditing and financial reporting standards and government
regulation; the possibility of expropriation, nationalization or confiscatory
taxation; political or social instability or diplomatic developments; and the
differences between the economies of the United States and the applicable
foreign country, even though the Fund's investments are limited to those in
"developed countries." Each of these factors is carefully considered when
investments are made, but the Fund does not limit the amount of its assets which
can be invested in any particular type of eligible obligation or in any
developed foreign country.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, the
Primary Portfolio may not (1) invest more than 25% of its total assets in the
securities of issuers conducting their principal business activities in any one
industry, except that under normal circumstances at least 25% of its total
assets will be invested in bank obligations; (2) invest more than 5% of its
total assets in the securities of any issuer (loan participations are considered
obligations of both the lender and the borrower); (3) invest more than 10% of
its total assets in repurchase agreements not terminable within seven days
(whether or not illiquid) or other illiquid investments including participation
interests and other instruments described above for which no secondary markets
exist: (4) borrow money except from banks for extraordinary or emergency
purposes in aggregate amounts not exceeding 15% of its total assets (and, when
such borrowings exceed 5% of its total assets, make any further investments);
and (5) mortgage, pledge or hypothecate its assets except to secure such
borrowings. Limitations (1) and (2) do not apply to U.S. Government Securities.
QUEST CASH RESERVES--GOVERNMENT PORTFOLIO
INVESTMENT OBJECTIVES AND PROCEDURES
The Government Portfolio's investment objectives are--in the following order
of priority-- safety of principal, liquidity, and maximum current income from
money market securities to the extent consistent with the first two objectives.
As a matter of fundamental policy, the Government Portfolio pursues its
objectives by maintaining a diversified portfolio of high quality money market
securities of the types described in the succeeding paragraph, all of which at
the time of investment have remaining maturities of thirteen months or less.
While the Portfolio may not change this policy or the "other fundamental
investment policies" described below without shareholder approval, it may, upon
notice to shareholders but without such approval, change its other investment
policies. As is true with all investment companies, there can be no assurance
that the Government Portfolio's objectives will be achieved.
MONEY MARKET SECURITIES
The money market securities in which the Government Portfolio invests are
(1) marketable obligations of, or guaranteed by, the United States Government,
its agencies or instrumentalities (collectively "U.S. Government Securities"),
including direct obligations of the United States Treasury such as Bills, Notes
and Bonds, and issues of agencies and instrumentalities established under the
authority of an act of Congress such as the Federal Home Loan Banks, which have
the right to borrow from the U.S. Treasury, and the Federal National Mortgage
Association, the securities of which are
5
<PAGE>
solely dependent on the issuing instrumentality for repayment; and (2)
repurchase agreements that are collateralized in full each day by the types of
U.S. Government Securities listed above. These agreements are entered into with
"primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. Government Securities and with the Fund's Custodian.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain portfolio diversification and reduce investment risk, the
Government Portfolio may not (1) invest more than 5% of its total assets in
repurchase agreements with any one vendor, although with respect to 25% of its
total assets it may invest without regard to such limitation; (2) invest more
than 10% of its total assets in repurchase agreements not terminable within
seven days (whether or not illiquid) or other illiquid investments; (3) borrow
money except from banks for extraordinary or emergency purposes in aggregate
amounts not exceeding 15% of its total assets (and, when such borrowings exceed
5% of its total assets, make any further investments); and (4) mortgage, pledge
or hypothecate its assets except to secure such borrowings.
QUEST CASH RESERVES--GENERAL MUNICIPAL PORTFOLIO
INVESTMENT OBJECTIVES AND POLICIES
The General Municipal Portfolio's investment objectives are--in the
following order of priority-- safety of principal, liquidity, and, to the extent
consistent with these objectives, maximum current income from money market
securities that is exempt from Federal income taxes. As a matter of fundamental
policy, the General Municipal Portfolio pursues its objectives by maintaining a
diversified portfolio of high-grade municipal securities of the types described
in the succeeding section, all of which at the time of investment have remaining
maturities of thirteen months or less and generate, in the opinion of bond
counsel to the issuer, interest that is exempt from Federal income taxes. At
least 80% of the Portfolio's total assets will be invested in such securities
unless the Advisor has determined that it is in the best interest of the
Portfolio to assume a temporary defensive position involving a greater
commitment of assets to obligations generating taxable income. Normally,
substantially all of the Portfolio's income will be exempt from Federal taxes,
although it may be subject to state or local income taxes. While the Portfolio
may not change this policy or the "other fundamental investment policies"
described below without shareholder approval, it may, upon notice to
shareholders but without such approval, change its other investment policies. As
is true with all investment companies, there can be no assurance that the
General Municipal Portfolio's objectives will be achieved.
Under the current Internal Revenue Code (1) interest on tax-exempt municipal
securities issued after August 7, 1986 and used to finance "private activities"
(e.g., industrial development bonds) shall be treated as an item of tax
preference for purposes of alternative minimum tax ("AMT") imposed on
individuals and corporations, though for regular Federal income tax purposes
such interest remains fully tax-exempt, and (2) interest on all tax-exempt
obligations shall be included in "adjusted net book income" of corporations for
AMT purposes. The General Municipal Portfolio may purchase "private activity"
municipal securities without limitation, and therefore a substantial portion
(and potentially all) of any distribution from the Portfolio may be treated as a
tax preference item (with resulting tax) for those taxpayers subject to AMT.
Investors who are already subject to AMT should consider whether an investment
in the Portfolio is suitable for them. Investors are urged to consult their own
tax advisors with respect to their own tax situations.
MUNICIPAL SECURITIES
The municipal securities in which the General Municipal Portfolio invests
are municipal notes, short-term municipal bonds, short-term discount
6
<PAGE>
notes, and participation interests in any of the foregoing. Municipal notes are
generally used to provide for short-term capital needs and generally have
maturities of thirteen months or less. Examples include tax anticipation and
revenue anticipation notes which are generally issued in anticipation of various
seasonal revenues, bond anticipation notes, and tax-exempt commercial paper.
Short-term municipal bonds may include general obligation bonds, which are
secured by the issuer's pledge of its faith, credit and taxing power for payment
of principal and interest, and revenue bonds, which are generally paid from the
revenues of a particular facility or a specific excise or other source. Included
within the revenue bonds category are participations in lease obligations or
installment purchase contracts (hereinafter collectively called "lease
obligations") of municipalities. States and local agencies or authorities issue
lease obligations to acquire equipment and facilities.
All of the General Municipal Portfolio's municipal securities at the time of
purchase must be of prime quality, as previously defined. Securities must also
meet credit standards applied by the Advisor.
The General Municipal Portfolio may invest in variable rate obligations
whose interest rates are adjusted either at predesignated periodic intervals or
whenever there is a change in the market rate to which the security's interest
rate is tied. Such adjustments minimize changes in the market value of the
obligation and, accordingly, enhance the ability of the Portfolio to maintain a
stable net asset value. Variable rate securities purchased may include
participation interests in industrial development bonds backed by letters of
credit of domestic or foreign banks having total assets of more than $1 billion;
the letters of credit of any single bank in respect of all variable rate
obligations will not cover more than 10% of the Portfolio's total assets.
The General Municipal Portfolio also may purchase tender option bonds. A
tender option bond is a municipal security (generally held pursuant to a
custodial arrangement) having a relatively long maturity and bearing interest at
a fixed rate substantially higher than prevailing short-term tax-exempt rates,
that has been coupled with the agreement of a third party, such as a bank,
broker-dealer, or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face value thereof.
As consideration for providing the option, the financial institution receives
periodic fees equal to the difference between the municipal security's fixed
coupon rate and the rate, as determined by a remarketing or similar agent at or
near the commencement of such period, that would cause the securities coupled
with the tender option to trade at par on the date of such determination. Thus,
after payment of the fee, the security holder effectively holds a demand
obligation that bears interest at the prevailing short-term tax-exempt rate. The
Advisor, on behalf of the General Municipal Portfolio, will consider on an
ongoing basis the creditworthiness of the issuer of the underlying municipal
security, of any custodian, and of the third party provider of the tender
option. In certain instances and for certain tender option bonds, the option may
be terminable in the event of a default in payment of principal or interest on
the underlying municipal securities, and for other reasons. The Fund will
consider as illiquid securities tender option bonds as to which it cannot
exercise the tender feature on not more than seven days' notice if there is no
secondary market available for these obligations.
Lease obligations may have risks not normally associated with general
obligation or other revenue bonds. Lease obligations and conditional sale
contracts (which may provide for title to the leased asset to pass eventually to
the issuer), have developed as a means for government issuers to acquire
property and equipment without the necessity of complying with the
constitutional and statutory requirements generally applicable for the issuance
of debt. Certain lease obligations contain "non-appropriation" clauses that
provide that the governmental issuer has no obligation to make future payments
under the lease or contract unless money
7
<PAGE>
is appropriated for such purposes by the appropriate legislative body on an
annual or other periodic basis. Consequently, continued lease payments on those
lease obligations containing "non-appropriation" clauses are dependent on future
legislative actions. If such legislative actions do not occur, the holders of
the lease obligation may experience difficulty in exercising their rights,
including disposition of the property.
In addition, lease obligations may not have the depth of marketability
associated with other municipal obligations, and as a result, certain of such
lease obligations may be considered illiquid securities. To determine whether or
not the General Municipal Portfolio will consider such securities to be illiquid
(the Portfolio may not invest more than 10% of its net assets in illiquid
securities), the following guidelines have been established to determine the
liquidity of a lease obligation. The factors to be considered in making the
determination include: (1) the frequency of trades and quoted prices for the
obligation; (2) the number of dealers willing to purchase or sell the security
and the number of other potential purchasers; (3) the willingness of dealers to
undertake to make a market in the security; and (4) the nature of the
marketplace trades, including the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of the transfer.
The General Municipal Portfolio also may invest in forward commitments,
which obligate the Portfolio to purchase securities, and stand-by commitments,
which give the Portfolio the right to resell securities, from or to a dealer at
a specified price. Such commitments, which may involve certain expenses and
risks, are not expected to comprise a significant portion of the Portfolio's
investments. The Portfolio may commit up to 15% of its net assets to the
purchase of when-issued securities. The underlying securities are subject to
market fluctuations and no interest accrues prior to delivery of such
securities.
TAXABLE INVESTMENTS
The taxable investments in which the General Municipal Portfolio may invest
include obligations of the U.S. Government and its agencies or
instrumentalities; prime quality certificates of deposit and bankers'
acceptances; prime quality commercial paper; and repurchase agreements
collateralized at all times by such instruments.
OTHER FUNDAMENTAL INVESTMENT POLICIES
To maintain Portfolio diversification and reduce investment risk, the
General Municipal Portfolio may not (1) invest more than 25% of its total assets
in municipal securities whose issuers are located in the same state or more than
25% of its total assets in municipal securities whose interest is paid from
revenues of similar-type projects; (2) invest more than 5% of its total assets
in the securities of any one issuer (except the U.S. Government) although with
respect to 25% of its total assets it may invest without regard to such
limitation; (3) invest more than 10% of its total assets in repurchase
agreements not terminable within seven days (whether or not illiquid) or other
illiquid investments; (4) borrow money except from banks for extraordinary or
emergency purposes and in aggregate amounts not exceeding 15% of its total
assets (and, when such borrowings exceed 5% of its total assets, make any
further investments); and (5) mortgage, pledge or hypothecate its assets except
to secure such borrowings.
ADDITIONAL INFORMATION
ARRANGEMENTS FOR TELEPHONE REDEMPTIONS. If you wish to use the telephone
redemption procedure, indicate this on your New Account Application and
designate a bank and account number to receive the proceeds of your withdrawals.
You also may choose to have the proceeds mailed to you in the form of check to
the address of record on your account. If you decide later that you wish to use
this
8
<PAGE>
procedure, or to change instructions already given, send a written notice to
Unified with your signature guaranteed by an eligible guarantor, and designate a
bank and account number to receive redemption proceeds. Eligible guarantors
include member firms of a national securities exchange, banks, savings
associations, and credit unions, as defined by the Federal Deposit Insurance
Act. For joint accounts, all owners must sign and have their signatures
guaranteed.
INVESTMENTS MADE BY CHECK. Money transmitted by a check drawn on a member
of the Federal Reserve System is converted to Federal Funds in one business day
following receipt and is then invested in the Fund. Checks drawn on banks which
are not members of the Federal Reserve System may take longer to be converted
and invested. All payments must be in United States dollars.
FORWARDING OF PROCEEDS FROM ANY REDEMPTION OF FUND SHARES PURCHASED BY CHECK
MAY BE DELAYED ONLY UNTIL THE CHECK HAS CLEARED WHICH MAY NORMALLY TAKE UP TO
FIFTEEN DAYS FOLLOWING THE PURCHASE DATE.
AUTOMATED CLEARING HOUSE TRANSFERS. Fund shares can be purchased and
redeemed by ACH electronic funds transfer between Unified and a bank. There are
no charges to you for ACH transactions, either by the Fund or Unified. ACH
transfers are completed approximately two business days following the placement
of transfer orders.
For your Fund account to be eligible for ACH transfers to and from your
bank, you must complete Unified's ACH Authorization Form which can be obtained
from our service representative by telephoning the number below. Direct deposits
into your Fund account by ACH transfer can be used for part or all of recurring
payments made to you by your employer (corporate, Federal, military, or other
type) or by the Social Security Administration. Instructions to the sending
parties are simple; call toll-free 800-UMC-FUND (800-862-3863) to obtain
complete information from our service representative.
TIMING OF INVESTMENTS AND REDEMPTIONS. The Fund has two transaction times
each day, at 12:00 noon and 4:00 p.m. (New York time). New investments
represented by Federal Funds or bank wire monies received by the Custodian prior
to 12:00 noon are paid the full dividend for that day; such investments received
after 12:00 noon do not begin to receive daily dividends until the next day.
Redemption orders received prior to 12:00 noon are effected at 12:00 noon; the
shares redeemed do not earn that day's dividend but the redemption proceeds are
available that day. Redemption orders received after 12:00 noon are effected at
4:00 p.m.; the shares redeemed earn the daily dividend for that day and the
redemption proceeds are remitted the next business day.
MINIMUMS. The Fund has minimums of $1,000 for initial investments, $100 for
subsequent investments, and $500 for account balances. These minimums do not
apply to shareholder accounts maintained through brokerage firms or other
financial institutions, as such financial intermediaries may maintain their own
minimums for their customer's investments in the Fund. The Fund may impose
service charges upon financial intermediaries to reflect the relatively higher
costs of small accounts and small transactions; these intermediaries may in turn
pass on such charges to affected accounts.
A shareholder subject to the minimum account balance requirement must
increase his or her account balance to at least $500 within sixty days after
notice of a deficient balance has been mailed by the Fund, or the Fund may close
the account and mail a check for the proceeds to the shareholder. The Fund
intends at least once each six months to review its shareholder balances in
regard to the $500 minimum and to send appropriate notices to shareholders with
deficient accounts. The Fund imposes no minimums for redemptions by mail or for
redemptions made on an account's behalf by brokerage firms or other financial
institutions. However, such firms may have internal procedures that include
minimums.
SHARE PRICE. Shares are sold and redeemed on a continuing basis without
sales or redemption charges at their net asset value which is expected to
9
<PAGE>
be constant at $1.00, although this share price is not guaranteed. The net asset
value is determined each business day at 4:00 p.m. (New York time). The net
asset value per share is calculated by taking the sum of the value of
investments (amortized cost value is used for this purpose) and any cash or
other assets, subtracting liabilities, and dividing by the total number of
shares outstanding. All expenses, including the fees payable to the Advisor, are
accrued daily.
DAILY DIVIDENDS, OTHER DISTRIBUTIONS, TAXES. All net income of each
Portfolio is determined each business day and is declared payable pro rata to
shareholders of record as of 12:00 noon. Declared dividends are accrued and are
automatically paid into shareholders' accounts on a monthly basis. As such
additional reinvested shares earn subsequent dividends, a compounding growth of
income occurs.
Net income of the Portfolios consists of all accrued interest income on
portfolio assets less the expenses applicable to that dividend period. All
realized gains and losses are reflected in the net asset value and are not
included in net investment income.
Distributions to your account of tax-exempt interest income are not subject
to Federal income tax (other than the alternative minimum tax described above),
but may be subject to state or local income taxes. Distributions of taxable
interest income, other investment income, and net short-term capital gains are
taxed to you as ordinary income; state and local taxation of such distributions,
if any, may be reduced in proportion to the percentage of income that derives
from U.S. Government obligations. Distributions of net long-term capital gains
would be taxable as long-term capital gains irrespective of the length of time
you may have held your shares. Distributions of net short-term and long-term
capital gains, if any, would be made annually. Each January, each Portfolio will
send you tax information for the calendar year just ended stating the amounts
and types of all its distributions, including the percentage of income derived
from U.S. Government obligations, for the calendar year just ended.
PERIODIC WITHDRAWALS. Without affecting your right to use any of the
methods of redemption described on pages 8 and 9, by checking the appropriate
boxes on the Application Form you may elect to participate additionally in the
following plans without any separate charges. Under the INCOME DISTRIBUTION PLAN
you receive monthly payments of all the income earned in your Fund account.
Under the SYSTEMATIC WITHDRAWAL PLAN, you may request checks in any specified
amount of $50 or more each month or in any intermittent pattern of months. If
desired, you can order, via a signature-guaranteed letter to the Fund, such
periodic payments to be sent to another person.
THE ADVISOR. The Fund retains Quest for Value Advisors (the "Advisor"), One
World Financial Center, New York, New York, 10281, under an Advisory Agreement
to provide investment advice and, in general, to supervise the Fund's business
affairs and investment program, subject to the general control of the Directors
of the Fund. The Advisor is a subsidiary of Oppenheimer Capital, one of the
nation's largest independent investment managers, presently having in excess of
$30 billion in assets under its supervision. The management fee rate for each
Portfolio is at an annual rate of .50% on the first $100 million of average
daily net assets, .45% on the next $200 million of average daily net assets, and
.40% of average daily net assets in excess of $300 million, payable monthly.
DISTRIBUTION PLAN. Under a Distribution Assistance and Administrative
Services Plan (the "Plan") adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, each Portfolio pays the Advisor monthly at an
annual rate of .25 of 1% of the Portfolio's average daily net assets.
Substantially all such monies are paid by the Advisor to broker-dealers, banks
and other depository institutions, and other financial intermediaries for
distribution assistance and administrative services provided to the Portfolio,
with
10
<PAGE>
any remaining amounts being used to partially defray other expenses incurred by
the Advisor in distributing shares. The Plan has been approved by the Board of
Directors and by the Fund's shareholders. The Statement of Additional
Information contains additional information about the Advisory Agreement and the
Plan.
EXPENSES--EXPENSE LIMITATION. Principal operating expenses of the Fund
consist of the Advisor's fee, costs of the Plan, legal and accounting expenses,
custodian fees, and transfer agent and other shareholder servicing costs.
Shareholders pay no direct charges or fees for investment services. Each
Portfolio's expenses are paid out of its gross investment income. The Advisor
reimburses each Portfolio to the extent that the combined aggregate operating
expenses of the Portfolio exceed 1% of its average daily net assets for any
fiscal year.
FUND ORGANIZATION. The Fund, which is an open-end investment company
registered under the Investment Company Act of 1940, was organized as a Maryland
corporation in series form in April 1989. The Fund's activities are supervised
by its Board of Directors. Each share of a Portfolio is entitled to one vote;
shares vote as a single series on matters that affect all Portfolios in
substantially the same manner. The Fund does not intend to hold regular annual
shareholder meetings. Directors are required to call a special meeting of a
Portfolio's shareholders if owners of at least 10% of the Portfolio's
outstanding shares so request in writing. The Fund may establish additional
Portfolios which may have different investment objectives from those stated in
this prospectus. The Fund issues shares only for full monetary consideration,
and it does not issue share certificates.
REPORTS. You will receive semi-annual and annual reports of the Portfolio
in which you are invested as well as a summary statement of your account each
month (each quarter if the account is inactive). To reduce expenses, only one
copy of financial reports will be mailed to your household, even if you have
more than one account. If you wish to receive additional copies of financial
reports, please call 1-800-232-FUND. You can arrange for a copy of each of your
account statements to be sent to other parties.
YIELD DEFINITIONS. From time to time we may advertise yield, effective
yield, and tax equivalent yield. Yield refers to income generated by an
investment in a Portfolio over a seven day or other stated period, expressed as
an annual percentage rate. EFFECTIVE YIELD of a Portfolio results from the
compounding of periodically reinvested dividends. TAX-EQUIVALENT YIELD
represents the amount of income subject to a particular tax rate which would
have to be earned to give an investor an amount of income equal to tax-exempt
income. In addition, reference in advertisements may be made to ratings and
ratings among similar funds by independent evaluators, such as Lipper's
Analytical Services, Inc. The performance of the Portfolios may be compared to
recognized indices of market performance.
CUSTODIAN AND TRANSFER AGENT. The custodian of the assets, transfer agent
and shareholder servicing agent for the Fund is State Street Bank and Trust
Company. Cash balances of the Fund with the Custodian in excess of $100,000 are
unprotected by Federal deposit insurance. Such uninsured balances may at times
be substantial.
SHAREHOLDER SERVICING AGENT FOR CERTAIN SHAREHOLDERS. Unified Management
Corporation (800-UMC-FUND(862-3863)) is the shareholder servicing agent for
former shareholders of the AMA Family of Funds and clients of AMA Investment
Advisers, Inc. who acquire shares of any Quest Fund, and for former shareholders
of the Unified Funds and Liquid Green Trusts, accounts which participated or
participate in a retirement plan for which Unified Investment Advisers, Inc. or
an affiliate acts as custodian or trustee, accounts which have a Money Manager
brokerage account, and other accounts for which Unified Management Corporation
is the dealer of record.
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<PAGE>
PURCHASE AND REDEMPTION OF SHARES
OPENING ACCOUNTS--NEW INVESTMENTS
A. WHEN FUNDS ARE SENT BY WIRE (the wire method permits immediate credit)
1) Telephone Unified toll-free at 800-UMC-
FUND (800-862-3863). A service representative will ask you for (a) the
name of the account as you wish it to be registered, (b) the address of
the account, (c) your taxpayer identification number (social security
number for an individual) and (d) the name of the Portfolio in which you
wish to invest. You will then be provided with a control number.
2) Instruct your bank to wire Federal Funds
(see minimums below) exactly as follows and precisely in the order
presented:
RECEIVING BANK INFORMATION:
Fifth Third Bank (Cincinnati, OH)
ABA#042000314
BENEFICIARY INFORMATION:
BNF=Quest Cash Reserves
(SPECIFY PRIMARY, GOVERNMENT OR GENERAL MUNICIPAL PORTFOLIO)
AC-71575485
Other Beneficiary Information:
OBI=Quest Cash Reserves
<TABLE>
<S> <C> <C>
Your account name as registered
Your account number with the Fund
</TABLE>
There is a $1,000 minimum to open a new account, except that there is no
minimum for opening Individual Retirement Accounts or other retirement plans.
3)Mail a completed Application Form to:
Unified Management Corp.
P.O. Box 6110
Indianapolis, IN 46206-6110
FOR OTHER THAN U.S. POSTAL SERVICE MAIL:
Unified Management Corp.
429 North Pennsylvania Street
Indianapolis, IN 46204
B. WHEN FUNDS ARE SENT BY CHECK
1) Complete the New Account Application
2) Mail the completed Application along with
your check, money order or Federal Reserve bank draft (see minimums under
A(2) above) payable to the Quest Cash Reserves Portfolio you have
selected, to the address in A(3) above.
C. BY EXCHANGE
1) BY MAIL--Send a written request to the address in A(3) above. Sign the
request exactly as your name appears on the account registration. (For joint
accounts, all owners must sign.) Be certain your request meets the minimum for
a new account and that the amount remaining in the Fund from which you are
exchanging also exceeds its minimum.
2) BY TELEPHONE--Call Unified at 800-UMC-FUND (800-862-3863).
SUBSEQUENT INVESTMENTS (Purchases)
A. INVESTMENTS BY WIRE (to obtain immediate credit)
Instruct your bank to wire Federal Funds (minimum $1000) as in A(2) above.
B. INVESTMENTS BY CHECK
Mail your check, money order or Federal Reserve bank draft (minimum $100),
payable to the appropriate Quest Portfolio, to the address in A(3) above, along
with the remittance portion of your
12
<PAGE>
last account statement or letter of instruction. Include your account name,
account number and Portfolio name on the front of your check, money order or
draft.
C. BY EXCHANGE
Follow instructions under C, above. There is no minimum for systematic
exchanges established for dollar cost averaging purposes.
WITHDRAWALS (Redemptions)
A. WITHDRAWALS BY TELEPHONE
(requires pre-arrangement; call 800-UMC-FUND (800-862-3863) for information)
Telephone Unified toll-free at 800-UMC-FUND (800-862-3863) or at
317-634-3300 (not toll-free) and place your redemption request with the service
representative. You may request that your redemption proceeds be sent via wire
or ACH to your previously-designated bank account or that a check be mailed to
you. Wires will be sent to your bank and checks will be mailed to you on the
next Indiana business day following receipt of your request. Unified may charge
a fee for wire redemptions. Monies sent via ACH take approximately two business
days to reach your bank. You may be required to have your signature guaranteed.
(See page 9.)
B. WITHDRAWALS BY CHECKWRITING
Under the Fund's Regular Checkwriting Service, you may write checks made
payable to any payee in any amount of $250 or more. Under the Fund's Flexible
Checkwriting Service checks may be made payable in any amount but there will be
a charge of $15.00 for each book of 50 checks for an individual account or
$50.00 for each book of 300 checks for a corporate account. Either checkwriting
service enables you to receive the daily dividends declared on the shares to be
redeemed until the day that your check is presented for payment. If your
check-writing is associated with a brokerage account there is no change in the
services made available to you.
To establish the checkwriting service you must sign the Signature Card which
accompanies the New Account Application. You will be sent a book of checks upon
Unified's receipt of your completed Signature Card.
Please do not use the checkwriting service to close out your Quest account,
as the balance of your account will continue to increase via daily dividends
until the check is presented for payment. Unified reserves the right to impose a
charge for checks returned unpaid for insufficient funds or for checks on which
you have placed a stop order.
C. WITHDRAWALS BY MAIL
Submit a written request for any amount to Unified at the address in A(3)
above. Include your account name as registered and your account number. Sign the
request exactly as your name appears on the registration. (For joint accounts,
all owners must sign.) You may be required to have your signature guaranteed.
(See page 9.)
<TABLE>
<S> <C>
OBTAINING AN APPLICATION FORM--ASSISTANCE If your account with the Fund is to be
If you wish to obtain an Application Form, maintained through a brokerage firm or
or if you have any questions about the other institution, do not fill out the
Form, purchasing shares, or other Fund Application Form or the Signature Card.
procedures, please telephone the Fund Instead, contact your account representative
toll-free at 800-UMC-FUND (800-862-3863). at such institution. Institutions may
charge a fee for providing such assistance.
</TABLE>
13
<PAGE>
[LOGO]
<PAGE>
YIELDS
Call the Fund toll-free at 800-232-FUND (800-232-3863). If you call from a
touch-tone telephone, press 1 for Quest Call and then press the following
sequence of keys:
<TABLE>
<S> <C> <C> <C> <C> <C>
Primary Portfolio 1 # 5 5 #
Government Portfolio 1 # 5 6 #
General Municipal Portfolio 1 # 5 7 #
California Municipal
Portfolio 1 # 2 3 #
New York Municipal Portfolio 1 # 2 4 #
</TABLE>
From non-touch-tone telephone, ask our shareholder service representative for
yield information.
Quest Cash Reserves (the "Fund") is an open-end money market fund investment
company with five separate Portfolios. Though the Portfolios have the same
investment objectives of safety of principal, liquidity and maximum current
income, they may in the pursuit of these objectives invest in different types of
money market securities or in different proportions of the same types of
securities. This prospectus sets forth information about the Fund and its
Primary, Government and General Municipal Portfolios that a prospective investor
should know before investing. Please retain this prospectus for future
reference.
A Statement of Additional Information dated March 31, 1995 provides further
discussion of certain areas in this prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. A free copy may be obtained
by writing the Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
CONTENTS PAGE
Introduction.................................................................. 1
Expense Information........................................................... 2
Financial Highlights.......................................................... 3
Primary Portfolio............................................................. 4
Government Portfolio.......................................................... 5
General Municipal Portfolio................................................... 6
Additional Information........................................................ 8
Purchase and Redemption of Shares.............................................12
<PAGE>
QUEST CASH RESERVES
- PRIMARY PORTFOLIO
- GOVERNMENT PORTFOLIO
- GENERAL MUNICIPAL PORTFOLIO
MARCH 31, 1995
PROSPECTUS
OFFERED THROUGH
UNIFIED MANAGEMENT CORPORATION
429 N. PENNSYLVANIA STREET
INDIANAPOLIS, IN 46204
