THE STARBURST GOVERNMENT INCOME FUND
(A Portfolio of The Starburst Funds)
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SUPPLEMENT TO THE PROSPECTUS DATED DECEMBER 31, 1994
1. Please delete the "Summary of Fund Expenses" table on page 1 of the
prospectus and replace it with the following:
SUMMARY OF FUND EXPENSES
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<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................................... 2.50%
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price).......................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, if applicable).................. None
Redemption Fee (as a percentage of amount redeemed,
if applicable)......................................................... None
Exchange Fee............................................................. None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee (after waiver) (1)........................................ 0.44%
12b-1 Fee (after waiver) (2)............................................. 0.09%
Total Other Expenses..................................................... 0.49%
Total Fund Operating Expenses.................................. 1.02%
</TABLE>
(1) The Management Fee has been reduced to reflect the voluntary
waiver of the Management Fee. The Management Fee reflects the
projected average amount of fees to be collected through October
31, 1995. Beginning May 19, 1995, the adviser will collect a
Management Fee of 0.50%. The adviser can terminate this
voluntary waiver at any time at its sole discretion. The maximum
Management Fee is 0.75%.
(2) Under the Fund's Rule 12b-1 Distribution Plan, the Fund can pay
up to 0.25% as a 12b-1 fee. The 12b-1 fee has been reduced to
reflect the voluntary waiver of compensation by the distributor.
The 12b-1 fee reflects the average amount which will have been
paid through May 19, 1995. After May 19, 1995, the Fund will not
pay or accrue 12b-1 fees until a separate class of shares has
been created for certain institutional investors. The
distributor can terminate this waiver at any time at its sole
discretion.
The Total Fund Operating Expenses were 1.20% for the fiscal year
ended October 31, 1994. The Total Fund Operating Expenses in the
table above are based on expenses expected to be incurred during the
fiscal year ending October 31, 1995. Total Fund
Operating Expenses are estimated to be 1.49% absent the voluntary
waiver by the adviser and distributor.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN
UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF
THE FUND WILL BEAR EITHER DIRECTLY OR INDIRECTLY. FOR A MORE COMPLETE
DESCRIPTION OF THE VARIOUS COSTS AND EXPENSES, SEE "THE STARBURST
FUNDS INFORMATION" AND "INVESTING IN THE FUND." WIRE-TRANSFERRED
REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE
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You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time period.
The Fund charges no redemption fees.
1 Year................................................................................ $ 35
3 Years............................................................................... $ 57
5 Years............................................................................... $ 80
10 Years.............................................................................. $147
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN.
2. Please delete the first sentence of the first paragraph in the section
entitled "Exchange Privilege," which begins on page 14 of the
prospectus and replace it with the following:
"Shareholders may exchange shares of the Fund for shares in The
Starburst Municipal Income Fund, The Starburst Government Money Market
Fund, The Starburst Money Market Fund, and any other portfolio of The
Starburst Funds."
May 17, 1995
Logo
FEDERATED SECURITIES CORP.
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Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
855245809
G00948-01 (5/95)
