STARBURST FUNDS, 485APOS, 1997-03-26

STARBURST FUNDS
485APOS, 1997-03-26

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The Statements of Additional Information for The Starburst Government Income
Fund, The Starburst Money Market Fund Trust Shares and The Starburst Money
Market Fund Investment Shares included as part of Post-Effective Amendment No.
24 to the Registrant's Registration Statement on Form N-1A (File No. 33-30950)
filed with the Securities and Exchange Commission on December 27, 1996, is
hereby incorporated by reference as if set forth in full herein.

1 of 2

1933 Act File No. 33-30950
1940 Act File No. 811-5900

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ............
Post-Effective Amendment No. 25 ............ X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 22 ..................... X

THE STARBURST FUNDS

(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
- -----
on December 31, 1996 pursuant to paragraph (b)
- -----
60 days after filing pursuant to paragraph (a) (i)
- -----
on pursuant to paragraph (a) (i).
- ----- -------

X 75 days after filing pursuant to paragraph (a)(ii)
- -----
on pursuant to paragraph (a)(ii) of Rule 485.
- ----- ---------

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
- ----- previously filed post-effective amendment.

Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:

2 of 2

X filed the Notice required by that Rule on December 16, 1996; or
- -----
intends to file the Notice required by that Rule on or about ; or
- ----- --------
during the most recent fiscal year did not sell any securities
- ----- pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.

Copies to:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037

CROSS REFERENCE SHEET

This Amendment to the Registration Statement of THE STARBURST FUNDS, which
is comprised of 3 portfolios, (1) The Starburst Money Market Fund (a)
Institutional Shares and (b) Institutional Services Shares, (2) The Starburst
Equity Fund (a) Institutional Shares and (b) Investment Shares, and (3) The
Starburst Bond Fund (a) Institutional Shares and (b) Investment Shares, and is
comprised of the following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.
<TABLE>
<CAPTION>

Prospectus Heading
(Rule 404(c) Cross Reference)

<C> <C> <S>
Item 1. Cover Page (1-3) Cover Page.
Item 2. Synopsis (1-3) Summary of Fund Expenses.
Item 3. Condensed Financial Information (1-3) Financial Highlights; (1-3) Performance Information.
Item 4. General Description of Registrant (1-3) General Information; (1-3) Investment Information;
(1-3) Investment Objective; (1-3) Investment Policies;
(1-3) Investment Limitations; (2) Investment Risks;
(1,2) Other Classes of Shares.
Item 5. Management of the Fund (1-3) Fund Information; (1-3) Management of the Fund;
(1-3) Distribution of Fund Shares; (1-3) Administration
of the Fund.
Item 6. Capital Stock and Other Securities (1-3) Dividends; (1-3) Capital Gains; (1-3) Shareholder
Information; (1-3) Voting Rights; (1-3) Effect of Banking
Laws; (1-3) Tax Information; (1-3) Federal Income Tax;
(1-3) State and Local Taxes.
Item 7. Purchase of Securities Being Offered (1-3) Net Asset Value; (1-3) Investing in (Investment Shares,
Institutional or Institutional Service Shares or the Fund);
(1-3) Share Purchases; (2b, 3b) Minimum Investment Required;
(1-3) What Shares Cost; (2b,3b) Systematic Investment Program;
(1a,2a,3a) Shareholder Accounts; (1b,2b,3b) Reducing the
Sales Charge; (1-3) Retirement Plans.
Item 8. Redemption or Repurchase (1-3) Exchange Privilege; (1-3) Redeeming (Investment,
Institutional or Institutional Service) Shares; (1b,2b,3b)
Systematic Withdrawal Program; (1b,2b,3b) Accounts with
Low Balances.
Item 9. Pending Legal Proceedings None.
</TABLE>

PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
<TABLE>
<C> <C> <S>
Item 10. Cover Page (1-3) Cover Page.
Item 11. Table of Contents (1-3) Table of Contents.
Item 12. General Information and History (1-3) General Information About the Fund.
Item 13. Investment Objectives and Policies (1-3) Investment Objective and Policies; (1-3)
Investment Limitations.
Item 14. Management of the Fund (1-3) The Starburst Funds Management; (1-3)
Trustees Compensation.
Item 15. Control Persons and Principal Holders
of Securities (1-3) Fund Ownership.
Item 16. Investment Advisory and Other Services (1-3) Investment Advisory Services; (1-3)
Other Services.
Item 17. Brokerage Allocation (1-3) Brokerage Transactions.
Item 18. Capital Stock and Other Securities Not Applicable.
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered (1-3) Purchasing (Investment, Institutional, or
Institutional Service) Shares; (1-3) Determining
Net Asset Value; (3) Exchange Privilege;
(1-3) Redeeming (Investment, Institutional or
Institutional Service) Shares; (1-3) Massachusetts
Partnership Law.
Item 20. Tax Status (1-3) Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance Data (1-3) Yield; (1,2) Effective Yield; (1-3) Total Return;
(1-3) Performance Comparisons.
Item 23. Financial Statements
</TABLE>

SUBJECT TO COMPLETION , 1997

THE STARBURST EQUITY FUND
(A PORTFOLIO OF THE STARBURST FUNDS)

INSTITUTIONAL SHARES

PROSPECTUS

The Institutional Shares ("Shares") offered by this prospectus represent
interests in a diversified portfolio known as The Starburst Equity Fund (the
"Fund"). The Fund is one of a series of investment portfolios in The Starburst
Funds (the "Trust"), an open-end, management investment company (a mutual
fund).

The investment objective of the Fund is to provide growth of capital, with a
secondary objective of income. The Fund pursues this investment objective by
investing in a professionally managed, diversified portfolio limited primarily
to common stocks issued by mid- and large- capitalization companies.

Shareholders can invest in or redeem shares at any time without charge or
penalty imposed by the Fund.

Compass Bank professionally manages the Fund's portfolio.

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
COMPASS BANK, COMPASS BANCSHARES, INC. OR ANY OF ITS AFFILIATES, OR OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY COMPASS BANK, COMPASS BANCSHARES, INC.
OR ANY OF ITS AFFILIATES, OR BY ANY BANK, AND ARE NOT OBLIGATIONS OF,
GUARANTEED BY OR INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC"), THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.

This prospectus contains the information you should read and know before you
invest in shares of the Fund. Keep this prospectus for future reference.

The Fund has also filed a Statement of Additional Information dated ,
1997, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have received
your prospectus electronically, free of charge by calling [ ]. To
obtain other information or make inquiries about the Fund, contact the Fund at
the address listed in the back of this prospectus. The Statement of Additional
Information, material incorporated by reference into this document, and other
information regarding the Fund is maintained electronically with the SEC at
Internet Web site (http://www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

Prospectus dated , 1997
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO, AMONG OTHER THINGS, THIS PROSPECTUS HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SECURITIES OF THE
PORTFOLIO REFERENCED IN THIS PROSPECTUS MAY NOT BE SOLD NOR MAY OFFERS TO BUY
SUCH SECURITIES BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF SECURITIES
REFERENCED HEREIN IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO SUCH REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

SUMMARY OF FUND EXPENSES 1
- -------------------------------------

PERFORMANCE INFORMATION FOR
PREDECESSOR COMMON TRUST FUNDS 2

- -------------------------------------
GENERAL INFORMATION 2
- -------------------------------------

INVESTMENT INFORMATION 3
- -------------------------------------

Investment Objective 3

Investment Policies 3

Investment Limitations 5

FUND INFORMATION 5
- -------------------------------------

Management of the Fund 5

Distribution of Fund Shares 6

Administration of the Fund 6
NET ASSET VALUE 6
- -------------------------------------

INVESTING IN INSTITUTIONAL SHARES 7

- -------------------------------------

Share Purchases 7

What Shares Cost 7

Shareholder Accounts 8

Dividends 8

Capital Gains 8

Retirement Plans 8

EXCHANGE PRIVILEGE 8
- -------------------------------------

REDEEMING SHARES 9
- -------------------------------------

SHAREHOLDER INFORMATION 10
- -------------------------------------

Voting Rights 10

EFFECT OF BANKING LAWs 11
- -------------------------------------

TAX INFORMATION 11
- -------------------------------------

Federal Income Tax 11

PERFORMANCE INFORMATION 12
- -------------------------------------

OTHER CLASSES OF SHARES 12
- -------------------------------------

ADDRESSES 13
- -------------------------------------

SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES SHAREHOLDER
TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)......................................................... None
Maximum Sales Charge 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

*Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C>
Management Fee (1)...................................................... .75%
Total Other Expenses (2)................................................ .35%
Total Fund Operating Expenses (1)................................... 1.10%
</TABLE>

(1) The Adviser has agreed, on a voluntary basis, to waive its adviser fee for
the Starburst Equity Fund to the extent necessary to keep the "Total
Operating Expenses" for the current fiscal year from exceeding 1.25%. The
Adviser reserves the right in its sole discretion, to terminate these
waivers at any time.

(2) "Total Other Expenses" is based on estimated amounts for the current
fiscal year. The Fund, either directly or through its transfer agent, may
enter into arrangements with recordkeepers and others who provide services
to shareholders, and may compensate such entities for their services. Any
such arrangements, if entered into, may increase the Fund's "Total Other
Expenses".

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SHARES OF THE
FUND WILL BEAR EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS
OF THE VARIOUS COSTS AND EXPENSES, SEE "FUND INFORMATION" AND "INVESTING IN
THE FUND."
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years
- ------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming
(1) 5% annual return; (2) payment of the maximum sales charge;
and (3) redemption at the end of each time period............... $11 $35
</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.

PERFORMANCE INFORMATION FOR PREDECESSOR COMMON TRUST FUNDS
- -------------------------------------------------------------------------------

The Starburst Equity Fund is the successor to a common trust fund previously
managed by Compass Bank. A substantial portion of the assets of that common
trust fund was transferred to the Fund in connection with the Fund's
commencement of operations. Set forth below is certain performance data for
the precedessor common trust fund, which is deemed relevant because the common
trust fund was managed using virtually the same investment objectives,
policies and restrictions as those used by the Fund. The performance data,
however, is not necessarily indicative of the future performance of the Fund.
Further, the precedessor common trust fund was not subject to certain
investment limitations imposed on mutual funds which, if they had been
imposed, may have adversely affected a common trust fund's performance.

The predecessor common trust fund did not incur expenses that correspond to
the advisory, administrative, and other fees to which the Fund is subject.
Accordingly, the following performance information has been adjusted by
applying the total expense ratios for the Fund, as disclosed in the Prospectus
at the time the Fund commenced operations, which reduced the actual
performance of the common trust fund.

The average annual total returns (adjusted to reflect current Fund expenses,
net of voluntary waivers and reimbursements) for the following periods:
<TABLE>
<CAPTION>
FIVE
YEARS SINCE
ONE THREE ENDED INCEPTION
YEAR YEARS 12/31/96 12/31/96
---- ----- -------- ---------
<S> <C> <C> <C> <C>
River Oaks Equity
Model Trust
Fund % % % %
</TABLE>

GENERAL INFORMATION
- -------------------------------------------------------------------------------

The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated August 7, 1989. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes. As of the date of this
prospectus, the Board of Trustees (the "Trustees") has established two classes
of shares of the Fund, Investment Shares and Institutional Shares. This
prospectus relates only to Institutional Shares of the Fund.

Institutional Shares of the Fund are primarily designed customers of the Asset
Management Group of Compass Bank or of any affiliate or any division of any
affiliate or any correspondent of Compass Bank or any affiliate providing
fiduciary, trust, agency, private banking or similar services who desire a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio primarily investing in common stocks issued by mid- and
large-capitalization companies.

Fund shares are currently sold at net asset value and redeemed at net asset
value.

INVESTMENT INFORMATION
- -------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The investment objective of the Fund is to provide growth of capital, with a
secondary objective of income. The investment objective cannot be changed
without approval of shareholders. While there is no assurance that the Fund
will achieve its investment objective, it endeavors to do so by following the
investment policies described in this prospectus.

INVESTMENT POLICIES

The investment policies described below may be changed by the Board of
Trustees (the "Trustees") without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.

ACCEPTABLE INVESTMENTS. The Fund invests primarily in common stocks issued by
mid- and large- capitalization companies. The Fund may invest any remaining
assets in warrants and rights to purchase common stocks, preferred stocks
convertible into common stock, non-convertible preferred stocks, U.S. dollar
denominated equity securities of foreign issuers listed on national securities
exchanges or actively traded in the over-the-counter market, and American
Depositary Receipts ("ADRs"). The Fund also may purchase and sell ("write")
put and call options (including options on indices) and may purchase financial
futures contracts and options thereon. The Fund also may purchase bonds
convertible into common stock and Standard & Poor's Depositary Receipts
("SPDRs").

TEMPORARY INVESTMENTS. The Fund may invest some or all of its assets in cash,
shares of money market mutual funds and repurchase agreements for liquidity
reasons or for defensive purposes during times of unusual market conditions.

EQUITY SECURITIES. Equity securities consist primarily of common stocks and
instruments exchangeable or convertible into common stocks, as well as
warrants and other instruments the value of which is derived from common
stocks. Common stock represents units of ownership in a corporation or other
company. Investments in equity securities are subject to market risks which
may cause their prices to fluctuate over time. Changes in the value of these
securities will not necessarily affect cash income derived from these
securities but will affect the Fund's net asset value.

RESTRICTED SECURITIES. The Fund may invest in restricted securities.
Restricted securities are securities in which the Fund may otherwise invest
pursuant to its investment objective and policies but which are subject to
restrictions on resale under federal securities laws. Restricted securities
may be illiquid.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Fund purchases

securities with payment and delivery scheduled for a future time. The seller's
failure to complete these transactions may cause the Fund to miss a price or
yield considered to be 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.

PUT AND CALL OPTIONS. The Fund may purchase put and call options on its
portfolio securities as a hedge to attempt to protect securities which the
Fund holds, or will be purchasing, against decreases or increases in value.
The Fund may also write (sell) put and call options on all or any portion of
its portfolio to generate income for the Fund. The Fund will write call
options on securities either held in its portfolio or which it has the right
to obtain without payment of further consideration or for which it has
segregated cash in the amount of any additional consideration. In the case of
put options written by the Fund, the Fund will segregate liquid obligations
with a value equal to or greater than the exercise price of the underlying
securities. The Fund can purchase or write options that are either traded
over-the-counter or on an exchange. The Fund will purchase and write over-the-
counter options only with investment dealers and other financial institutions
(such as commercial banks or savings associations) deemed creditworthy by the
Fund's adviser.

FINANCIAL FUTURES AND OPTIONS ON FUTURES. The Fund may purchase and sell
financial futures contracts. Financial futures contracts call for the delivery
of particular instruments at a certain time in the future for a specified
price. When the 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 ear-marked to collateralize the
position.
RISKS ASSOCIATED WITH FUTURES AND OPTIONS ON FUTURES. When the Fund uses
futures and options on futures, there is a risk that the prices of the
securities subject to the futures contracts may not correlate with the
prices of the securities in the Fund's portfolio. This may cause the
futures contract and any related options to react differently than the
portfolio securities to market changes. In addition, the Fund's adviser
could be incorrect in its expectations about the direction or extent of
market factors. Although the adviser will consider liquidity before
entering into options transactions, there is no assurance that a liquid
secondary market will exist for any particular futures contract or option
at any particular time. The Fund's ability to establish and close out
futures and options positions depends on this secondary market.

FOREIGN SECURITIES RISK. Investments in securities issued by foreign companies
present special risks. Examples of these risks include international, economic
and political developments, foreign governmental restrictions that may
adversely affect the payment of principal or interest, foreign withholding or
other taxes on interest income, difficulties in obtaining or enforcing a
judgment against

the issuing bank, and the possible impact of interruptions in the flow of
international currency transactions. Different risks may also exist for
Canadian Time Deposits, ECDs, ETDs and Yankee CDs because the banks issuing
these instruments, or their domestic or foreign branches, are not necessarily
subject to the same regulatory requirements that apply to domestic banks, such
as reserve requirements, loan limitations, examinations, accounting, auditing,
recordkeeping and the public availability of information. These factors will
be carefully considered by the Fund's adviser in selecting investments for the
Fund.
INVESTMENT LIMITATIONS

The Fund will not:

. borrow money or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its net assets and
pledge up to [10]% of the value of its total assets to secure such
borrowings; or
. with respect to securities comprising 75% of its assets, invest more
than 5% of its total assets in securities of one issuer (except
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities).

The above investment limitations cannot be changed without shareholder
approval. The following limitation, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any
material change in this limitation becomes effective.

The Fund will not:

. invest more than 15% of its total assets in securities which are not
readily marketable or which are otherwise considered illiquid, including
over-the-counter options and repurchase agreements providing for
settlement in more than seven days after notice.

FUND INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES. The Board of Trustees is responsible for managing the
business affairs of the Trust and for exercising all of the powers of the
Trust except those reserved for the shareholders.

INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust
and subject to direction by the Trustees, investment decisions for the Fund
are made by Compass Bank (the "Adviser"). The Adviser continually conducts
investment research and supervision for the Fund and is responsible for the
purchase or sale of portfolio instruments, for which it receives an annual fee
from the Fund.

ADVISORY FEES. The Adviser is entitled to receive an annual investment
advisory fee equal to .75% of the Fund's average daily net assets. The
Adviser may choose to voluntarily waive a portion of its fee and reimburse
certain expenses of the Fund. The Adviser reserves the right, in its sole
discretion, to terminate these voluntary waivers at any time.

ADVISER'S BACKGROUND. Compass Bank, an Alabama state member bank, is a
wholly-owned subsidiary of Compass Bancshares, Inc. ("Bancshares"), a bank
holding company organized under the laws of Delaware. Through its
subsidiaries and affiliates, Bancshares, the 54th largest bank holding
company in the United States in terms of total assets as of September 30,
1996, offers a full range of financial services to the public including
commercial lending, depository services, cash management, brokerage
services, retail banking, credit card services, investment advisory
services, and trust services.

As of September 30, 1996, Compass Bank offered a broad range of commercial
banking services. The Adviser has managed mutual funds since February 5,
1990 and as of September 30, 1996, the Asset Management Group of Compass
Bank had approximately $5.6 billion under administration of which it had
investment discretion over approximately $1.7 billion. The Asset
Management Group of Compass Bank provides investment advisory and
management services for the assets of individuals, pension and profit
sharing plans, endowments and foundations.

The Fund is managed by members of the Starburst Portfolio Management Team.

DISTRIBUTION OF FUND SHARES

[ ] (the "Distributor") is the principal distributor for shares of
the Fund. It is a wholly-owned subsidiary of (" "), and is the
principal distributor for a number of investment companies.

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES. SEI Fund Resources (the "Administrator"), provides
the Fund with certain administrative personnel and services necessary to
operate the Fund. Such services include shareholder servicing and certain
legal and accounting services. For these services, the Administrator is
entitled to a fee which is calculated daily and paid monthly at an annual rate
of % of the Fund's average daily net assets. The Administrator may choose
to voluntarily waive a portion of its fee. The Administrator reserves the
right, in its sole discretion, to terminate these voluntary waivers at any
time.

CUSTODIAN. Compass Bank, Birmingham, Alabama, is custodian for the securities
and cash of the Fund for which it receives an annual fee of .02% of the Fund's
daily net assets and is reimbursed for its out-of-pocket expenses.

NET ASSET VALUE
- -------------------------------------------------------------------------------

The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets, less
liabilities, by the number of shares outstanding.

INVESTING IN INSTITUTIONAL SHARES
- -------------------------------------------------------------------------------

SHARE PURCHASES

Institutional Shares may be purchased through the Asset Management Group of
Compass Bank, or through other affiliates of Bancshares or division of any
affiliate of Bancshares providing fiduciary, trust, private banking, agency
and similar services. Investors may purchase Institutional Shares of the Fund
on all business days except on days which the New York Stock Exchange ("NYSE")
is closed and federal or state holidays restricting wire transfers. In
connection with the sale of Institutional Shares, the Distributor may, from
time to time, offer certain items of nominal value to any shareholder or
investor. The Fund reserves the right to reject any purchase request.

To purchase Shares, a customer may contact their local Compass Asset
Management Group administrator or contact a Compass Asset Management Group
representative by telephoning Compass Bank. Payment may be made either by
check or wire transfer of federal funds or by debiting a customer's account at
Compass.

To purchase by check, the check must be included with the order and made
payable to "The Starburst Equity Fund--Institutional Shares." Orders are
considered received after payment by check is converted into federal funds.
Third party checks, [credit cards, credit card checks and cash] will not be
accepted. When purchases are made by check, redemptions will not be allowed
until the investment being redeemed has been in the account for 15 business
days.

When payment is made through wire transfer of federal funds, the order is
considered received immediately upon receipt of the wire by Compass. Payment
by wire must be received at Compass before [3:00 p.m. (Central time)] on the
same day as the order to earn dividends for that day. Prior to purchasing by
wire, investors should call their Compass representative prior to [3:00 p.m.
(Central time)]. Federal funds should be wired as follows: Compass Bank; ABA
Number [06001186]; Credit: Deposit Account--A/C Number ;
Further credit to: The Starburst Equity Fund--Institutional Shares; Re:
(Shareholder name and account number).

Under limited circumstances, arrangements may be made with Compass for same
day receipt of purchase orders, to earn dividends that day. Investors
interested in establishing such arrangements are requested to call their
Compass representative, and are reminded that the Fund does reserve the right
to refuse any purchase request.

Shares cannot be purchased on days on which the NYSE is closed and on federal
or state holidays restricting wire transfers.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund on sales of
Institutional Shares.

The net asset value is determined as of the close of trading (normally 3:00
p.m., Central time) [on the NYSE] Monday through Friday, except on New Year's
Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

SHAREHOLDER ACCOUNTS

As transfer agent for the Fund, Boston Financial Data Services, Inc. ("Boston
Financial") maintains a Share account for each shareholder of record. Share
certificates are not issued unless requested by contacting the Fund in
writing. Institutional Shares sold to Compass acting in a fiduciary, advisory,
custodial, agency, or similar capacity on behalf of customers may be held of
record by Compass. Beneficial ownership of the Institutional Shares will be
recorded by Compass and reflected in the account statements provided by
Compass to customers, and reports of purchases and redemptions of
Institutional Shares held by Compass in a fiduciary, advisory, custodial,
agency or similar capacity on behalf of customers will be provided
periodically by Compass to such customers.

DIVIDENDS

Dividends are declared daily and paid monthly. Dividends will be reinvested
automatically in additional shares on payment dates without a sales charge
unless cash payments are requested by writing to the Fund or Compass as
appropriate.

CAPITAL GAINS

Capital net gains realized by the Fund, if any, will be distributed at least
once every twelve months.

RETIREMENT PLANS

Shares of the Fund can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact the Fund and consult a tax
adviser.

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

Shareholders may exchange shares of the Fund for shares in The Starburst Bond
Fund, The Starburst Money Market Fund, and any other portfolio of the Trust.
Neither the Trust nor any of the Funds imposes any additional fees on
exchanges. Exchange requests cannot be executed on days on which the NYSE is
closed or on applicable banking holidays for affiliates of Bancshares.

Upon receipt by the Distributor of proper instructions and all necessary
supporting documents, shares submitted for exchange will be redeemed at the
next-determined net asset value. If the exchanging shareholder does not have
an account in the participating fund whose shares are being acquired, a new
account will be established with the same registration, dividend and capital
gain options as the account from which shares are exchanged, unless otherwise
specified by the shareholder. In the case where the new account registration
is not identical to that of the existing account, a signature guarantee is
required. (See "Redeeming Shares--By Mail.") Exercise of this privilege is
treated as a redemption and new purchase for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may
be realized. The Fund reserves the right to modify or terminate the exchange
privilege at any time. Shareholders would be notified prior to any
modification or termination. Shareholders may obtain further information on
the exchange privilege by calling their Compass representative or an
authorized broker.

EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by calling [ ]. In addition, investors may
exchange shares by calling their authorized representative directly.

An authorization form permitting the Fund to accept telephone exchange
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial application. If not completed at
the time of initial application, authorization forms and information on this
service can be obtained through a Compass representative or authorized broker.

Shares may be exchanged by telephone only between fund accounts having
identical shareholder registrations. Exchange instructions given by telephone
may be electronically recorded. If reasonable procedures are not followed by
the Fund, it may be liable for losses due to unauthorized or fraudulent
telephone instructions.

Telephone exchange instructions must be received by Compass or an authorized
broker and transmitted to Boston Financial before 3:00 p.m. (Central time) for
shares to be exchanged the same day.

WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: Boston Financial . In addition, an investor
may exchange shares by sending a written request to their authorized broker
directly.

Shareholders of the Fund may have difficulty in making exchanges by telephone
through banks, brokers and other financial institutions during times of
drastic economic or market changes. If shareholders cannot contact their
Compass representative or authorized broker by telephone, it is recommended
that an exchange request be made in writing and sent by mail for next day
delivery.

Send mail requests to: Boston Financial .

Any shares held in certificate form cannot be exchanged by telephone but must
be forwarded to Boston Financial, the transfer agent, by a Compass
representative or authorized broker and deposited to the shareholder's account
before being exchanged.

REDEEMING SHARES
- -------------------------------------------------------------------------------

The Fund redeems shares at their net asset value next determined after Boston
Financial receives the redemption request. Redemption requests cannot be
executed on days on which the NYSE is closed and federal or state holidays
restricting wire transfers. Redemptions will be made on days on which the Fund
computes its net asset value. Telephone or written requests for redemptions
must be received in proper form and can be made through a Compass
representative or authorized broker.

BY TELEPHONE. Shareholders may redeem shares of the Fund by telephoning Boston
Financial. For calls received by Boston Financial before 3:00 p.m. (Central
time), proceeds will normally be deposited into the shareholder's account, if
any, at Compass or a check will be mailed to the address of record on the next
business day. In no event will it take more than seven days for proceeds to be
wired or a check to be mailed after a proper request for redemption has been
received. If, at any time, the Fund shall determine it necessary to terminate
or modify this method of redemption, shareholders would be promptly notified.

An authorization form permitting the Fund to accept telephone redemption
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial

application. If not completed at the time of initial application,
authorization forms and information on this service can be obtained through
Boston Financial. Telephone redemption instructions may be recorded. If
reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.

In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should occur,
another method of redemption, such as "By Mail," should be considered.

BY MAIL. Shareholders may redeem shares of the Fund by sending a written
request to the Fund through Boston Financial. The written request should
include the shareholder's name, the Fund name, the account number, and the
share or dollar amount requested. Investors redeeming through Boston Financial
should mail written requests to: .

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

. a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the FDIC;
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
. a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by the
FDIC; or
. 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.

The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.

SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------

VOTING RIGHTS

Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each portfolio
in the Trust have equal voting rights, except that in matters affecting only a
particular Fund, only shares of that Fund are entitled to vote.

As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust or the Fund's operation and for the election of Trustees
under certain circumstances.

Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders shall be called by the Trustees
upon the written request of shareholders owning at least 10% of the Trust's
outstanding shares.

EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------

Compass Bank, Bancshares and certain of Bancshares' affiliates are subject to
such banking laws and regulations. They believe, based on the advice of their
counsel, that they may perform those services for the Fund contemplated by any
existing agreement entered into with the Trust without violating those laws or
regulations. Changes in either federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of present or future statutes and regulations, could prevent
these entities from continuing to perform all or a part of the above services.
If this happens, the Trustees would consider alternative means of continuing
available services. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.

TAX INFORMATION
- -------------------------------------------------------------------------------

FEDERAL INCOME TAX

The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.

Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions. This applies whether dividends and
distributions are received in cash or as additional shares.

STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.

PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

From time to time, the Fund advertises its total return and yield.

Total return represents the change, over a specified period of time, in the
value of an investment in the Fund after reinvesting all income and capital
gains distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.

The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the
Fund over a thirty-day period by the maximum offering price per share of the
Fund on the last day of the period. This number is then annualized using semi-
annual compounding. The yield does not necessarily reflect income actually
earned by the Fund and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

Total return and yield will be calculated separately for Investment Shares and
Institutional Shares. Because Investment Shares are subject to sales charges
and differing expense levels, the total return and yield for Institutional
Shares, for the same period, ordinarily will exceed that of Investment Shares.

From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.

OTHER CLASSES OF SHARES
- -------------------------------------------------------------------------------

The Fund also offers another class of shares called Investment Shares.
Investment Shares are sold primarily to retail customers of Compass Bank.
Investments in Investment Shares are subject to a minimum initial investment
of $ .

Investment Shares are distributed pursuant to a 12b-1 Plan. Financial
institutions and brokers providing sales and/or administrative services may
receive different compensation from one class of shares of the Fund than from
another class of shares.

The stated advisory fee is the same for both classes of shares.

To obtain more information and a prospectus for Investment Shares, investors
may call [800-239-1930].

ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Starburst Equity Fund
- ----------------------------------------------------------------------------------------------------------------------------
Distributor
- ----------------------------------------------------------------------------------------------------------------------------
Investment Adviser and Custodian
Compass Bank 701 S. 32nd Street
Birmingham, Alabama 35233
- ----------------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
- ----------------------------------------------------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, Pennsylvania 15222-5401
- ----------------------------------------------------------------------------------------------------------------------------
[Counsel
Morgan, Lewis & Bockius LLP 1800 M Street, N.W.
Washington, D.C. 20036]
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE STARBURST
EQUITY FUND

INSTITUTIONAL SHARES
PROSPECTUS

[LOGO OF THE STARBURST FUNDS]
A PORTFOLIO OF THE STARBURST FUNDS,
AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY
, 1997
----------
------------------------
Distributor

COMPASS BANK
------------------------
Investment Adviser

SUBJECT TO COMPLETION , 1997

THE STARBURST EQUITY FUND
(A PORTFOLIO OF THE STARBURST FUNDS)

INVESTMENT SHARES

PROSPECTUS

The Investment Shares ("Shares") offered by this prospectus represent interests
in a diversified portfolio known as The Starburst Equity Fund (the "Fund"). The
Fund is one of a series of investment portfolios in The Starburst Funds (the
"Trust"), an open-end, management investment company (a mutual fund).

Compass Bank professionally manages the Fund's portfolio.

This prospectus contains the information you should read and know before you
invest in shares of the Fund. Keep this prospectus for future reference.

The Fund has also filed a Statement of Additional Information dated ,
1997, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have received
your prospectus electronically, free of charge by calling [ .] To
obtain other information or make inquiries about the Fund, contact the Fund at
the address listed in the back of this prospectus. The Statement of Additional
Information, material incorporated by reference into this document, and other
information regarding the Fund is maintained electronically with the SEC at
Internet Web site (http://www.sec.gov).

THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO, AMONG OTHER THINGS, THIS PROSPECTUS HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SECURITIES OF THE
PORTFOLIO REFERENCED IN THIS PROSPECTUS MAY NOT BE SOLD NOR MAY OFFERS TO BUY
SUCH SECURITIES BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF SECURITIES
REFERENCED HEREIN IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO SUCH REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.

Prospectus dated , 1997

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

SUMMARY OF FUND EXPENSES 1
- -------------------------------------

PERFORMANCE INFORMATION FOR
PREDECESSOR COMMON TRUST FUNDS 2

- -------------------------------------

GENERAL INFORMATION 2

- -------------------------------------

INVESTMENT INFORMATION 3

- -------------------------------------

Investment Objective 3

Investment Policies 3

Investment Limitations 5

FUND INFORMATION 5

- -------------------------------------

Management of the Fund 5

Distribution of Fund Shares 6

Administration of the Fund 7

NET ASSET VALUE 7

- -------------------------------------

INVESTING IN INVESTMENT SHARES 7

- -------------------------------------

Share Purchases 7

Minimum Investment Required 8

What Shares Cost 8

Reducing the Sales Charge 8

Systematic Investment Program 9

Dividends 9

Capital Gains 10

Retirement Plans 10

EXCHANGE PRIVILEGE 10

- -------------------------------------
REDEEMING SHARES 11
- -------------------------------------

Systematic Withdrawal Program 12

Accounts With Low Balances 13

SHAREHOLDER INFORMATION 13

- -------------------------------------

Voting Rights 13

EFFECT OF BANKING LAWs 13
- -------------------------------------

TAX INFORMATION 14

- -------------------------------------

Federal Income Tax 14

PERFORMANCE INFORMATION 14
- -------------------------------------

OTHER CLASSES OF SHARES 15

- -------------------------------------

ADDRESSES 16

- -------------------------------------

SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)......................................................... 2.50%
Maximum Sales Charge 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
</TABLE>

*Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C>
Management Fee [(after waiver)][(1)]..................................... 0.75%
12b-1 Fee................................................................ 0.25%
Total Other Expenses [(2)]............................................... 0.35%
Total Fund Operating Expenses........................................ 1.35%
</TABLE>

(1) The Adviser has agreed, on a voluntary basis, to waive its advisory fee
for the Starburst Equity Fund to the extent necessary to keep the "Total
Operating Expenses" for the current fiscal year from exceeding 1.50%. The
Adviser reserves the right, in its sole discretion, to terminate these
waivers at any time.

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INVESTMENT SHARES OF THE FUND
WILL BEAR EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "FUND INFORMATION" AND "INVESTING IN THE
FUND."
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years
- ------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming
(1) 5% annual return; (2) payment of the maximum sales charge;
and (3) redemption at the end of each time period............... $14 $43
</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.

PERFORMANCE INFORMATION FOR PREDECESSOR COMMON TRUST FUNDS
- -------------------------------------------------------------------------------

The Starburst Equity Fund is the successor to a common trust fund previously
managed by Compass Bank. A substantial portion of the assets of that common
trust fund was transferred to the Fund in connection with the Fund's
commencement of operations. Set forth below is certain performance data for
the predecessor common trust fund, which is deemed relevant because the
collective investment fund was managed using virtually the same investment
objectives, policies and restrictions as those used by the Fund. The
performance data, however, is not necessarily indicative of the future
performance of the Fund. Further, the predecessor common trust was not subject
to certain investment limitations imposed on mutual funds which, if they had
been imposed, may have adversely affected a collective fund's performance.

The predecessor common trust fund did not incur expenses that correspond to
the advisory, administrative, and other fees to which the Fund is subject.
Accordingly, the following performance information has been adjusted by
applying the total expense ratios for the corresponding Fund, as disclosed in
the Prospectus at the time the Fund commenced operations, which reduced the
actual performance of the common trust fund.

The average annual total returns (adjusted to reflect current Fund expenses
net of voluntary waivers and reimbursements) for the following periods:
<TABLE>
<CAPTION>
FIVE
YEARS
ONE THREE ENDED SINCE
YEAR YEARS 12/31/96 INCEPTION
---- ----- -------- ---------
<S> <C> <C> <C> <C>
River Oaks Equity Model Trust Fund % % % %

</TABLE>

GENERAL INFORMATION
- -------------------------------------------------------------------------------

The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated August 7, 1989. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes. As of the date of this
prospectus, the Board of Trustees (the "Trustees") has established two classes
of shares, Investment Shares and Institutional Shares. This prospectus relates
only to Investment Shares of the Fund.

Investment Shares of the Fund are primarily designed for customers of Compass
Bank and its correspondents or affiliates who desire a convenient means of
accumulating an interest in a professionally managed, diversified portfolio
primarily investing in common stocks issued by mid- and large-capitalization
companies. Except as noted herein, a minimum initial investment of $1,000 is
required. Subsequent investments must be in amounts of at least $100.

Fund shares are currently sold at net asset value plus an applicable sales
charge and redeemed at net asset value.

INVESTMENT INFORMATION
- -------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

INVESTMENT POLICIES

EQUITY SECURITIES. Equity securities consist primarily of common stocks and
instruments exchangeable or convertible into common stocks. Common stock
represents units of ownership in a corporation or other company. Investments
in equity securities are subject to market risks which may cause their prices
to fluctuate over time. Changes in the value of these securities will not
necessarily affect cash income derived from these securities but will affect
the Fund's net asset value.

REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at the time of
sale to repurchase them at a mutually agreed upon time and price. To the extent
that the original seller does not repurchase the securities from the Fund, the
Fund could receive less than the repurchase price on any sale of such
securities. RESTRICTED SECURITIES. The Fund may invest in restricted
securities. Restricted securities are securities in which the Fund may
otherwise invest pursuant to its investment objective and policies but which
are subject to restrictions on resale under federal securities laws. Restricted
securities may be illiquid. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS.
The Fund may purchase securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Fund to miss a price or yield
considered to be 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.

LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend portfolio securities on a short-term basis to broker/ dealers,
banks, or other institutional borrowers of securities. The Fund will receive
collateral in the form of cash or U.S. government securities equal to at least
100% of the value of the securities loaned. There is the risk that when
lending portfolio securities, the securities may not be available to the Fund
on a timely basis, and the Fund may, therefore, lose the opportunity to sell
the securities at a desirable price. In addition, in the event that a borrower
of securities filed for bankruptcy or became insolvent, disposition of the
securities may be delayed.
PUT AND CALL OPTIONS. The Fund may purchase put and call options on its
portfolio securities as a hedge to attempt to protect securities which the
Fund holds, or will be purchasing, against decreases or increases in value.
The Fund may also write (sell) put and call options on all or any portion of
its portfolio to generate income for the Fund. The Fund will write call
options on securities either held in its portfolio or which it has the right
to obtain without payment of further consideration or for which it has
segregated cash in the amount of any additional consideration. In the case of
put options written by the Fund, the Fund will segregate liquid obligations
with a value equal to or greater than the exercise price of the underlying
securities. The Fund can purchase or write options that are either traded
over-the-counter or on an exchange. The Fund will purchase and write over-the-
counter options only with investment dealers and other financial institutions
(such as commercial banks or savings associations) deemed creditworthy by the
Fund's adviser.

RISKS ASSOCIATED WITH FUTURES AND OPTIONS ON FUTURES. When the Fund uses
futures and options on futures, there is a risk that the prices of the
securities subject to the futures contracts may not correlate with the prices
of the securities in the Fund's portfolio. This may cause the futures contract
and any related options to react differently than the portfolio securities to
market changes. In addition, the Fund's adviser could be incorrect in its
expectations about the direction or extent of market factors. Although the
adviser will consider liquidity before entering into options transactions,
there is no assurance that a liquid secondary market will exist for any
particular futures contract or option at any particular time. The Fund's
ability to establish and close out futures and options positions depends on
this secondary market. FOREIGN SECURITIES RISK. Investments in securities
issued by foreign companies present special risks. Examples of these risks
include international, economic and political developments, foreign
governmental restrictions that may adversely affect the payment of principal or
interest, foreign withholding or other taxes on interest income, difficulties
in obtaining or enforcing a judgment against the issuing bank, and the possible
impact of interruptions in the flow of international currency transactions.
Different risks may also exist for Canadian Time Deposits, ECDs, ETDs and
Yankee CDS because the banks issuing these instruments, or their domestic or
foreign branches, are not necessarily subject to the same regulatory
requirements that apply to domestic banks, such as reserve requirements, loan
limitations, examinations, accounting, auditing, recordkeeping and the public
availability of information. These factors will be carefully considered by the
Fund's adviser in selecting investments for the Fund.

INVESTMENT LIMITATIONS

The Fund will not:

FUND INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES. The Board of Trustees is responsible for managing the
business affairs of the Trust and for exercising all of the powers of the
Trust except those reserved for the shareholders.

ADVISER'S BACKGROUND. Compass Bank (formerly known as Central Bank of the
South), an Alabama state member bank, is a wholly-owned subsidiary of
Compass Bancshares, Inc. ("Bancshares"), formerly known as Central
Bancshares of the South, Inc., a bank holding

company organized under the laws of Delaware. Through its subsidiaries and
affiliates, Bancshares, the 54th largest bank holding company in the
United States in terms of total assets as of September 30, 1996, offers a
full range of financial services to the public including commercial
lending, depository services, cash management, brokerage services, retail
banking, credit card services, investment advisory services, and trust
services.

The Fund is managed by members of the Starburst Portfolio Management Team.

DISTRIBUTION OF FUND SHARES

[ ] (the "Distributor") is the principal distributor for shares of
the Fund. It is a wholly-owned subsidiary of SEI Investments Company ("SEI"),
and is the principal distributor for a number of investment companies.

DISTRIBUTION PLAN. Pursuant to the provisions of a distribution plan adopted in
accordance with the Investment Company Act Rule 12b-1 (the "Plan"), the Fund
may pay to [ ] an amount computed at an annual rate of
.25% of the average daily net asset value of the Investment shares to finance
any activity which is principally intended to result in the sale of shares
subject to the Plan.

[ ] may, from time to time and for such periods as it
deems appropriate, voluntarily reduce or completely waive compensation payable
under the Plan.

The Distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers, including
Compass Bank and various other affiliates of Bancshares, to provide sales
and/or administrative services as agents for their clients or customers who
beneficially own shares of the Fund. Administrative services may include, but
are not limited to, the following functions: providing office space, equipment,
telephone facilities, and various personnel including clerical, supervisory,
and computer as necessary or beneficial to establish and maintain shareholder
accounts and records; processing purchase and redemption transactions and
automatic investments of client account cash balances; answering routine client
inquiries regarding the Fund; assisting clients in changing dividend options,
account designations, and addresses; and providing such other services as the
Fund reasonably requests. The Fund's Plan is a compensation type plan. As such,
the Fund makes no payments to the Distributor except as described above.
Therefore, the Fund does not pay for unreimbursed expenses of the Distributor,
including amounts expended by the Distributor in excess of amounts received by
it from the Fund, interest, carrying or other financing charges in connection
with excess amounts expended, or the distributor's overhead expenses.

SHAREHOLDER SERVICING AGREEMENTS. In addition to the fees paid by the
Distributor to financial institutions under the Plan as described above, the
Distributor may also pay financial institutions,

including Compass Bank and various other affiliates of Bancshares, a fee with
respect to the average

daily net asset value of shares held by their customers for providing
administrative services. This fee is in addition to the amounts paid under the
Plan.

Compass Bank, Compass Brokerage, Inc. and the other affiliates of Bancshares
which provide shareholder and administrative services to the Fund sometimes are
referred to herein as "Compass."

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES. SEI Fund Resources (the "Administrator") provides the
Fund with certain administrative personnel and services necessary to operate
the Fund. Such services include shareholder servicing and certain legal and
accounting services. For these services, the Administrator is entitled to a fee
which is calculated daily and paid monthly at an annual rate of % of the
Fund's average daily net assets. The Administrator may choose to voluntarily
waive a portion of its fee. The Administrator reserves the right, in its sole
discretion, to terminate these voluntary waivers at any time.

NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets, less
liabilities, by the number of shares outstanding.

INVESTING IN INVESTMENT SHARES
- --------------------------------------------------------------------------------

SHARE PURCHASES

Investment Shares may be purchased through Boston Financial Data Services, Inc.
("Boston Financial"). Investors may purchase shares of the Fund on all business
days except on days which the New York Stock Exchange ("NYSE") is closed and
federal or state holidays restricting wire transfers. The Fund reserves the
right to reject any purchase request.

TO PLACE AN ORDER. Investors may call Boston Financial at [1-800-239-1930.]
Payment may be made either by check, wire-transfer of federal funds or direct
debit from a Compass Bank account.

To purchase by check, the check must be included with the order and made
payable to "The Starburst Equity Fund--Investment Shares." Orders are
considered received after payment by check is converted into federal funds.
Third party checks[, credit cards, credit card checks and cash] will not be
accepted. When purchases are made by check, redemptions will not be allowed
until the investment being redeemed has been in the account for 15 business
days.

To purchase by wire, investors should call Boston Financial for wiring
instructions at [1-800-239-1930.] Payment for all orders must be received
within three days of placing the order. Shares cannot be purchased on days on
which the NYSE is closed and on federal or state holidays restricting wire
transfers.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in the Fund is $1,000, except for an IRA
account, which requires a minimum initial investment of $500. Subsequent
investments must be in amounts of at least $100.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received, plus a sales charge as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A SALES CHARGE AS A
PERCENTAGE OF PUBLIC PERCENTAGE OF NET
AMOUNT OF TRANSACTION OFFERING PRICE AMOUNT INVESTED
--------------------- -------------------- -----------------
<S> <C> <C>
[Less than $500,000 [2.50% [2.56%
$500,000 but less than $750,000 2.00% 2.04%
$750,000 but less than $1
million 1.00% 1.01%
$1 million but less than $2
million 0.25% 0.25%
$2 million or more] 0.00%] 0.00%]
</TABLE>

The net asset value is determined as of the close of trading (normally 3:00
p.m., Central time) on the NYSE, Monday through Friday, except on: (i) days on
which there are not sufficient changes in the value of the Fund's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no shares are tendered for redemption and no orders to purchase
shares are received; and (iii) the following holidays: New Year's Day, Martin
Luther King Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day.

[PURCHASES AT NET ASSET VALUE. Investment Class Shares of the Fund may be
purchased at net asset value, without a sales charge, by directors and
employees of the Fund, Bancshares or its affiliates, or or any bank
or investment dealer who has a sales agreement with the Distributor with
regard to the Fund, [and their spouses and children under 21].

SALES CHARGE REALLOWANCE. For sales of shares of the Fund, Compass Brokerage,
Inc. or any authorized dealer will normally receive up to 85% of the
applicable sales charge. Any portion of the sales charge which is not paid to
Compass Brokerage, Inc. or registered broker/dealers will be retained by the
Distributor. [However, the Distributor will periodically, uniformly offer to
pay to dealers additional amounts in the form of cash or promotional
incentives, such as reimbursement of certain expenses of qualified employees
and their spouses to attend informational meetings about the Fund or other
special events at recreational-type facilities, or items of material value.
Such payments, all or a portion of which may be paid from the sales charge the
Distributor normally retains or any other source available to it, will be
predicated upon the amount of the shares of the Fund that are sold by the
dealer.]

REDUCING THE SALES CHARGE
The sales charge can be reduced on the purchase of Fund shares through:

. quantity discounts and accumulated purchases;
. signing a 13-month letter of intent; or
. using the reinvestment privilege.

QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the table above,
larger purchases reduce the sales charge paid. The Fund will combine purchases
made on the same day by the investor, his spouse, and his children under age 21
when it calculates the sales charge.

If an additional purchase of Fund shares is made, the Fund will consider the
previous purchases still invested in the Fund. For example, if a shareholder
already owns shares having a current value at the public offering price of
$490,000 and purchases $10,000 more at the public offering price, the sales
charge on the additional purchase according to the schedule now in effect would
be 2.00%, not 2.50%.

To receive the sales charge reduction, Compass Brokerage, Inc. or the
Distributor must be notified by the shareholder in writing at the time the
purchase is made that Fund shares are already owned or that purchases are being
combined. The Fund will reduce the sales charge after it confirms the
purchases.

LETTER OF INTENT. If a shareholder intends to purchase at least $500,000 of
Fund shares over the next 13 months, the sales charge may be reduced by signing
a letter of intent to that effect. This letter of intent includes a provision
for a sales charge adjustment depending on the amount actually purchased within
the 13-month period and a provision for the Fund's custodian to hold 2.50% of
the total amount intended to be purchased in escrow (in shares of the Fund)
until such purchase is completed.

The amount held in escrow will be applied to the shareholder's account at the
end of the 13-month period unless the amount specified in the letter of intent
is not purchased. In this event, an appropriate number of escrowed shares may
be redeemed in order to realize the difference in the sales charge.

This letter of intent will not obligate the shareholder to purchase shares, but
if the shareholder does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. This letter may
be dated as of a prior date to include any purchases made within the past 90
days.

REINVESTMENT PRIVILEGE. If shares in the Fund have been redeemed, the
shareholder has a one-time right, within 30 days, to reinvest the redemption
proceeds at the next-determined net asset value without any sales charge.
Boston Financial must be notified by the shareholder in writing or by his
financial institution of the reinvestment, in order to eliminate a sales
charge. If the shareholder redeems his shares in the Fund, there may be tax
consequences.

SYSTEMATIC INVESTMENT PROGRAM

Once a Fund account has been opened, shareholders may add to their investment
on a regular basis in a minimum amount of $100. Under this program, funds may
be automatically withdrawn periodically from the shareholder's checking account
and invested in Fund shares at the net asset value next determined after an
order is received by Boston Financial, plus the applicable sales charge. A
shareholder may apply for participation in this program by calling Boston
Financial.

DIVIDENDS

CAPITAL GAINS

Capital net gains realized by the Fund, if any, will be distributed at least
once every twelve months.

RETIREMENT PLANS

Shares of the Fund can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact the Fund and consult a tax
adviser.

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

Shareholders may exchange shares of the Fund for shares in The Starburst Bond
Fund, The Starburst Money Market Fund, and any other portfolio of the Trust.
Shares of funds sold with a sales charge may be exchanged at net asset value
for shares of other funds with an equal sales charge or no sales charge.
Shares of funds with no sales charge acquired by direct purchase or
reinvestment of dividends on such shares may be exchanged for shares of funds
sold with a sales charge at net asset value, plus the applicable sales charge
imposed by the fund whose shares are being purchased. Neither the Trust nor
any of the Funds imposes any additional fees on exchanges. Exchange requests
cannot be executed on days on which the NYSE is closed or on applicable
banking holidays for affiliates of Bancshares.

When an exchange is made from a fund with a sales charge to a fund with no
sales charge, the shares exchanged and additional shares which have been
purchased by reinvesting dividends on such shares retain the character of the
exchanged shares for purposes of exercising further exchange privileges; thus,
an exchange of such shares for shares of a fund with a sales charge would be
at net asset value.

Shareholders who exercise this exchange privilege must exchange shares having
a net asset value of at least $1,000. Prior to any exchange, the shareholder
must receive a copy of the current prospectus of the participating fund into
which an exchange is to be made.

Upon receipt by of proper instructions and all necessary supporting documents,
shares submitted for exchange will be redeemed at the next-determined net
asset value. If the exchanging shareholder does not have an account in the
participating fund whose shares are being acquired, a new account will be
established with the same registration, dividend and capital gain options as
the account from which shares are exchanged, unless otherwise specified by the
shareholder. In the case where the new account registration is not identical
to that of the existing account, a signature guarantee is required. (See
"Redeeming Shares--By Mail.") Exercise of this privilege is treated as a
redemption and new purchase for federal income tax purposes and, depending on
the circumstances, a short or long-term capital gain or loss may be realized.
The Fund reserves the right to modify or terminate the exchange privilege at
any time. Shareholders would be notified prior to any modification or
termination. Shareholders may obtain further information on the exchange
privilege by calling Boston Financial or an authorized broker.

EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by calling [1-800-239-1930.] In addition,
investors may exchange shares by calling Boston Financial.

An authorization form permitting the Fund to accept telephone exchange
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial

application. If not completed at the time of initial application,
authorization forms and information on this service can be obtained through
Boston Financial or an authorized broker.

Telephone exchange instructions must be received by Compass or an authorized
broker and transmitted to Boston Financial before 3:00 p.m. (Central time) for
shares to be exchanged the same day.

WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: [ ].

In addition, an investor may exchange shares by sending a written request to
their authorized broker directly.

Shareholders of the Fund may have difficulty in making exchanges by telephone
through banks, brokers and other financial institutions during times of
drastic economic or market changes. If shareholders cannot contact Boston
Financial or an authorized broker by telephone, it is recommended that an
exchange request be made in writing and sent by mail for next day delivery.

Send mail requests to: [ ].

Any shares held in certificate form cannot be exchanged by telephone but must
be forwarded to the transfer agent, by Boston Financial or an authorized
broker and deposited to the shareholder's account before being exchanged.

REDEEMING SHARES
- -------------------------------------------------------------------------------

BY TELEPHONE. Shareholders may redeem shares of the Fund by telephoning Boston
Financial at [1-800-239-1930.] For calls received by Boston Financial before
3:00 p.m. (Central time), proceeds will normally be deposited into the
shareholder's account, if any, at Compass or a check will be sent to the
address of record on the next business day. In no event will it take more than
seven days for proceeds to be wired or a check to be sent after a proper
request for redemption has been received. If, at any time, the Fund shall
determine it necessary to terminate or modify this method of redemption,
shareholders would be promptly notified.
An authorization form permitting the Fund to accept telephone redemption
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

SIGNATURES. Shareholders requesting a redemption of any amount to be sent to
an address other than that on record with the Fund or a redemption payable
other than to the shareholder of record must have their signatures guaranteed
by:
. a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the FDIC;
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
. a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by the
FDIC; or
. 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.

The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. Redemptions of $ or greater for a Fund must
be in writing and a signature guarantee must accompany the written request.
The Fund and its transfer agent reserve the right to amend these standards at
any time without notice.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.

SYSTEMATIC WITHDRAWAL PROGRAM

shareholder's investment in the Fund. For this reason, payments under this
program should not be considered as yield or income on the shareholder's
investment in the Fund. To be eligible to participate in this program, a
shareholder must have invested at least $10,000 in the Fund (at current
offering price).

A shareholder may apply for participation in this program through Boston
Financial. Due to the fact that shares are sold with a sales charge, it is not
advisable for shareholders to be purchasing shares while participating in this
program.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $1,000. Before
shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement. This requirement does not apply, however, if the balance falls
below $1,000 because of changes in the Fund's net asset value.

SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------

VOTING RIGHTS

EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------

Compass Bank, Bancshares and certain of Bancshares' affiliates are subject to
such banking laws and regulations. They believe, based on the advice of their
counsel, that they may perform those services
for the Fund contemplated by any existing agreement entered into with the
Trust without violating those laws or regulations. Changes in either federal
or state statutes and regulations relating to the permissible activities of
banks and their subsidiaries or affiliates, as well as further judicial or
administrative decisions or interpretations of present or future statutes and
regulations, could prevent these entities from continuing to perform all or a
part of the above services. If this happens, the Trustees would consider
alternative means of continuing available services. It is not expected that
shareholders would suffer any adverse financial consequences as a result of
any of these occurrences.

TAX INFORMATION
- -------------------------------------------------------------------------------

FEDERAL INCOME TAX

STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.

PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

From time to time, the Fund advertises its total return and yield.
Total return represents the change, over a specified period of time, in the
value of an investment in the Fund after reinvesting all income and capital
gains distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.

Total return and yield will be calculated separately for Investment Shares and
Institutional Shares. Because Investment Shares are subject to sales charges
and differing expense level, the total return and yield for Institutional
Shares, for the same period, ordinarily will exceed that of Investment Shares.

From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.

OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------

The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold to accounts where Compass Bank or bank affiliates
of Bancshares have a trust or agency relationship. Institutional Shares are
sold at net asset value.

Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of
shares of the Fund are sold. Expense differences between Investment Shares and
Institutional Shares may affect the performance of each class.

The stated advisory fee is the same for both classes of shares.

To obtain more information and a prospectus for Institutional Shares, investors
may call [ .]

ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Starburst Equity Fund
Oaks, Pennsylvania 19456
- -----------------------------------------------------------------------------------------------------------------------------
Distributor
SEI Financial Services Company
Oaks, Pennsylvania 19456
- -----------------------------------------------------------------------------------------------------------------------------
Investment Adviser and Custodian
Compass Bank 701 S. 32nd Street
Birmingham, Alabama 35233
- -----------------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
- -----------------------------------------------------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP [2500 One PPG Place
Pittsburgh, Pennsylvania 15222-5401]
- -----------------------------------------------------------------------------------------------------------------------------
[Counsel
Morgan, Lewis & Bockius LLP 1800 M Street, N.W.
Washington, D.C. 20036]
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE STARBURST
EQUITY FUND

INVESTMENT

SHARES
PROSPECTUS

[LOGO OF STARBURST FUNDS]
A PORTFOLIO OF THE STARBURST FUNDS,
AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY
, 1997
----------

[ ]
------------------------
Distributor

COMPASS BANK
------------------------
Investment Adviser

THE STARBURST BOND FUND

(A PORTFOLIO OF THE STARBURST FUNDS) INVESTMENT SHARES

PROSPECTUS

The shares offered by this prospectus represent interests in a diversified
portfolio known as The Starburst Bond Fund (formerly The Starburst Government
Income Fund) (the "Fund"). The Fund is one of a series of investment
portfolios in The Starburst Funds (the "Trust"), an open-end, management
investment company (a mutual fund).

The investment objective of the Fund is to provide current income. The Fund
pursues this investment objective by investing in a professionally managed,
diversified portfolio consisting primarily of bonds, as well as other fixed
income securities.

Compass Bank professionally manages the Fund's portfolio.

This prospectus contains the information you should read and know before you
invest in shares of the Fund. Keep this prospectus for future reference.

The Fund has also filed a Statement of Additional Information dated ,
1997, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have
received your prospectus electronically, free of charge by calling 1-800-239-
1930. To obtain other information or make inquiries about the Fund, contact
the Fund at the address listed in the back of this prospectus. The Statement
of Additional Information, material incorporated by reference into this
document, and other information regarding the Fund is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).

Prospectus dated , 1997

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

SUMMARY OF FUND EXPENSES 1
- -------------------------------------

GENERAL INFORMATION 2
- -------------------------------------

INVESTMENT INFORMATION 2
- -------------------------------------

Investment Objective 2

Investment Policies 2

Investment Limitations 8

FUND INFORMATION 9
- -------------------------------------

Management of the Fund 9

Distribution of Fund Shares 10

Administration of the Fund 10

NET ASSET VALUE 10
- -------------------------------------

INVESTING IN INVESTMENT SHARES 11

- -------------------------------------

Share Purchases 11

Minimum Investment Required 11

What Shares Cost 11

Reducing the Sales Charge 12

Systematic Investment Program 13

Dividends 13

Capital Gains 13

Retirement Plans 13

EXCHANGE PRIVILEGE 13
- -------------------------------------

REDEEMING SHARES 15
- -------------------------------------

Systematic Withdrawal Program 16

Accounts with Low Balances 16

SHAREHOLDER INFORMATION 17
- -------------------------------------

Voting Rights 17

EFFECT OF BANKING LAWs 17
- -------------------------------------

TAX INFORMATION 17
- -------------------------------------

Federal Income Tax 17

PERFORMANCE INFORMATION 18
- -------------------------------------

OTHER CLASSES OF SHARES 18
- -------------------------------------

ADDRESSES 19
- -------------------------------------

SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INVESTMENT SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price)....... 2.50%
Maximum Sales Charge 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

*Wire-transferred redemptions of less than $5,000 may be subject to additional fees.

<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C>
Management Fee (after waiver) (1)................................................... 0.75%
12b-1 Fee (after waiver) (2)........................................................ 0.00%
Total Other Expenses................................................................ 0.33%
Total Fund Operating Expenses (3)............................................... 1.08%
</TABLE>

(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time
at its sole discretion. The maximum management fee is 0.75%. The Adviser
has agreed, on a voluntary basis, to waive its advisory fee for the
Starburst Bond Fund to the extent necessary to keep the "Total Operating
Epenses" for the current fiscal year from exceeding 1.10%. The Adviser
reserves the right, in its sole discretion, to terminate these waivers at
any time.

(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 Distributor can terminate
this waiver at any time at its sole discretion.

(3) Total Fund Operating Expenses would have been 1.33% absent the voluntary
waivers by the Adviser and Distributor.

<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
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
contingent deferred sales charge............... $11 $34 $60 $133
</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.

GENERAL INFORMATION
- -------------------------------------------------------------------------------

The Fund is primarily designed for customers of Compass Bank and its
correspondents or affiliates who desire a convenient means of accumulating an
interest in a professionally managed, diversified portfolio primarily
investing in bonds and other fixed income securities. Except as noted herein,
a minimum initial investment of $1,000 is required. Subsequent investments
must be in amounts of at least $100.

Fund shares are currently sold at net asset value plus an applicable sales
charge and redeemed at net asset value.

INVESTMENT INFORMATION
- -------------------------------------------------------------------------------

INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income. The
investment objective cannot be changed without approval of shareholders. While
there is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus.

INVESTMENT POLICIES

ACCEPTABLE INVESTMENTS. The Fund invests primarily in bonds as well as other
fixed income securities. Under normal circumstances, the Fund will invest at
least 65% of the value of its total assets in bonds. The Fund may invest any
remaining assets in a variety of fixed income securities, as further described
below.

BONDS. The Fund may acquire bonds, which include debentures and notes, issued
by U.S. and foreign companies as well as by bonds U.S. and foreign governments
and supranational entities. All such instruments must be denominated in U.S.
dollars and must be rated "A" or better by one or more nationally recognized
statistical rating organization ("NRSRO") at the time of purchase.

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in U.S. Government
securities. U.S. government securities in which the Fund invests include:

.direct obligations of the U.S. Treasury, including STRIPs and zero coupon
securities; and

. obligations of U.S. government agencies or instrumentalities, which may
include but are not limited to Federal Home Loan Banks, Government
National Mortgage Association, and the Federal Home Loan Mortgage
Corporation.

Obligations of U.S. government agencies or instrumentalities are backed in a
variety of ways by the U.S. government, or its agencies or instrumentalities.
Some of these obligations, such as Government National Mortgage Association
mortgage-backed securities, are backed by the full faith and credit of the
U.S. Treasury. Obligations of Federal Home Loan Banks are backed by the
discretionary authority of the U.S. government to purchase certain obligations
of agencies or instrumentalities. Obligations of the Federal Home Loan
Mortgage Corporation are backed by the credit of the agency issuing the
obligations.

MORTGAGE-RELATED SECURITIES. The Fund may invest in mortgage-related
securities which are issued by private entities. The mortgage-related
securities in which the Fund may invest may be: (i) privately issued
securities which are 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; (ii) privately issued securities which
are collateralized by pools of mortgages in which payment of principal and
interest are guaranteed by the issuer and such guarantee is collateralized by
U.S. government securities; or (iii) other privately issued securities in
which the proceeds of the issuance are invested in mortgage-backed securities
and payment of the principal and interest are supported by the credit of any
agency or instrumentality of the U.S. government. The underlying mortgage
pools may consist of both fixed and adjustable rate mortgages. Other mortgage-
related securities that may be purchased by the Fund include collateralized
mortgage obligations ("CMOs") and REMICs (discussed below).

ASSET-BACKED SECURITIES (NON-MORTGAGE). Asset-backed securities consist of
securities secured by company receivables, truck and auto loans, leases and
credit card receivables. Such securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in the
underlying pools of assets. Such securities also may be debt instruments,
which are also known as collateralized obligations and are generally issued as
the debt of a special purpose entity, such as a trust, organized solely for
purposes of owning such assets and issuing such debt. A Fund may invest in
other asset-backed securities that may be created in the future if the Advisor
determines they are suitable.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"). SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive
all of the interest payments and is thus termed an interest-only class ("IO"),
while the other class may receive all of the principal payments and is thus
termed the principal-only class ("PO"). The value of IOs tends to increase as
rates rise and decrease as rates fall; the opposite is true of POs. SMBs are
extremely sensitive to changes in interest rates because of the impact thereon
of prepayment of principal on the underlying mortgage securities.

par and pay interest periodically. Zero coupon obligations may include
interest only and principal only components of fixed income securities, as
well as interests in trusts that issue interests in fixed income securities,
such as "CATs" and "TIGRs."

LOAN PARTICIPATIONS. Loan participations are interests in loans to U.S.
corporations which are administered by the lending bank or agent for a
syndicate of lending banks, and sold by the lending bank or syndicate member
("intermediary bank"). In a loan participation, the borrower corporation will
be deemed to be the issuer of the participation interest except to the extent
the Fund derives its rights from the intermediary bank. Because the
intermediary bank does not guarantee a loan participation in any way, a loan
participation is subject to the credit risks generally associated with the
underlying corporate borrower. In the event of the bankruptcy or insolvency of
the corporate borrower, a loan participation may be subject to certain
defenses that can be asserted by such borrower as a result of improper conduct
by the intermediary bank. In addition, in the event the underlying corporate
borrower fails to pay principal and interest when due, the Fund may be subject
to delays, expenses and risks that are greater than those that would have been
involved if the Fund had purchased a direct obligation of such borrower. Under
the terms of a loan participation, the Fund may be regarded as a creditor of
the intermediary bank (rather than of the underlying corporate borrower), so
that the Fund may also be subject to the risk that the intermediary bank may
become insolvent.

CMOS/REMICS. These are mortgaged-backed securities issued by a non-
governmental entity, such as a trust or corporation. These securities include
collateralized mortgage obligations ("CMOs") and real estate mortgage
investment conduits ("REMICs"). While they are generally structured with one
or more types of credit enhancement, private pass-through securities typically
lack a guarantee by an entity having the credit status of a governmental
agency or instrumentality.

In a CMO, series of bonds or certificates are usually issued in multiple
classes. Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier than their stated maturity or final distribution
dates, resulting in a loss of all or part of any premium paid. A REMIC is a
CMO that qualifies for special tax treatment under the Internal Revenue Code
and invests in certain mortgages principally secured by interests in real
property.

CONVERTIBLE SECURITIES. Convertible securities are corporate securities that
are exchangeable for a set number of shares of another security at a prestated
price. Convertible securities have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of convertible securities tends to move together with the market value
of the underlying stock. The value of convertible securities is also affected
by prevailing interest rates, the credit quality of the issuer, and any call
provisions.

[DOLLAR ROLLS. Dollar roll transactions consist of the sale of mortgage-backed
securities to a bank or broker-dealer, together with a commitment to purchase
similar, but not necessarily identical, securities at a future date. Any
difference between the sale price and the purchase price is netted against the
interest income foregone on the securities to arrive at an implied borrowing
(reverse repurchase) rate. Alternatively, the sale and purchase transactions
which constitute the dollar roll can be executed at the same price, with the
Fund being paid a fee as consideration for entering into the commitment to
purchase. Dollar rolls may be renewed after cash settlement and initially may
involve only a firm

commitment agreement by the Fund to buy a security. If the broker-dealer to
whom the Fund sells the security becomes insolvent, the Fund's right to
purchase or repurchase the security may be restricted. Also, the value of the
security may change adversely over the term of the dollar roll, such that the
security that the Fund is required to repurchase may be worth less than the
security that the Fund originally held.]

GUARANTEED INVESTMENT CONTRACTS ("GICS"). GICs are contracts issued by U.S.
insurance companies. Pursuant to such contracts, the Fund makes cash
contributions to a deposit fund of the insurance company's general account.
The insurance company then credits to the Fund on a monthly basis guaranteed
interest at either a fixed, variable or floating rate. Generally, GICs are not
assignable or transferable without the permission of the issuing insurance
companies.

BANK INVESTMENT CONTRACTS ("BICS"). BICs are contracts issued by U.S. banks
and savings and loan institutions. Pursuant to such contracts, a Fund makes
cash contributions to a deposit fund of the general account of the bank or
savings and loan institution. The bank or savings and loan institution then
credits to the Fund on a monthly basis guaranteed interest at either a fixed,
variable or floating rate. Generally, BICs are not assignable or transferable
without the permission of the issuing bank or savings and loan institution.

SWAPS, CAPS, FLOORS AND COLLARS. Interest rate swaps, mortgage swaps, currency
swaps and other types of swap agreements such as caps, floors and collars are
designed to permit the purchaser to preserve a return or spread on a
particular investment or portion of its portfolio, and to protect against any
increase in the price of securities the Fund anticipates purchasing at a later
date. In a typical interest rate swap, one party agrees to make regular
payments equal to a floating interest rate times a "notional principal
amount," in return for payments equal to a fixed rate times the same amount,
for a specific period of time. Swaps may also depend on other prices or rates,
such as the value of an index or mortgage prepayment rates. In a typical cap
or floor agreement, one party agrees to make payments only under specified
circumstances, usually in return for payment of a fee by the other party.

INVESTMENT RISKS. The value of the Fund's shares will fluctuate. The amount of
this fluctuation is dependent upon the quality and maturity of the securities
in the Fund's portfolio, as well as on market conditions. Prices of securities
eligible for purchase by the Fund 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.

Mortgage-related securities may 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-related 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-related 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.

Securities of foreign issuers are subject to certain risks not typically
associated with domestic securities, including, among other risks, changes in
currency rates and in exchange control regulations, costs in connection with
conversions between various currencies, limited publicly available information
regarding foreign issuers, lack of uniformity in accounting, auditing and
financial statements and requirements, greater securities market volatility,
less liquidity of securities, less government supervision and regulations of
securities markets, withholding taxes and changes in taxes on income on
securities, and possible seizure, nationalization or expropriation of the
foreign issuer or foreign deposits.

TEMPORARY INVESTMENTS. The Fund may invest in cash and short-term obligations
during times of unusual market conditions for defensive purposes. Short-term
obligations include:

.obligations of the U.S. government or its agencies or instrumentalities;
and
.high quality commercial paper;

.short-term obligations issued by domestic banks and U.S. branches of
foreign banks; and
.repurchase agreements.

REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which
financial institutions sell U.S. government securities or other securities to
the Fund and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. To the extent that the original seller does not
repurchase the securities from the Fund, the Fund could receive less than the
repurchase price on any sale of such securities. The Fund will only enter into
repurchase agreements with banks and other recognized financial institutions
deemed by the adviser to be creditworthy pursuant to guidelines established by
the Trustees.

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. In a reverse repurchase agreement the 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, assets of the Fund in a dollar amount sufficient to make payment
for the obligations to be purchased, are earmarked or otherwise segregated
until the transaction is settled.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest in
the securities of other investment companies. The Fund will invest in other
investment companies primarily for the purpose of investing short-term cash
which has not yet been invested in other portfolio instruments.

RESTRICTED SECURITIES. The Fund may invest in restricted securities.
Restricted securities are any securities in which the Fund may otherwise
invest pursuant to its investment objective and policies but which are subject
to restrictions on resale under federal securities laws. Restricted securities
may be illiquid.

VARIABLE AND FLOATING RATE INSTRUMENTS. Certain obligations may carry variable
or floating rates of interest, and may involve conditional or unconditional
demand features. Such instruments bear interest at rates which are not fixed,
but which vary with changes in specified market rates or indices.

The interest rates on these securities may be reset daily, weekly, quarterly
or some other reset period, and may have a floor or ceiling on interest rate
changes. There is a risk that the current interest rate on such obligations
may not accurately reflect existing market interest rates.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Fund purchases securities with payment and delivery
scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
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.

LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities on a
short-term basis to broker/ dealers, banks, or other institutional borrowers
of securities. The Fund will only enter into loan arrangements with
broker/dealers, banks, or other institutions which the investment adviser has
determined are creditworthy under guidelines established by the Fund's
Trustees and will receive collateral in the form of cash or U.S. government
securities equal to at least 100% of the value of the securities loaned.

There is the risk that when lending portfolio securities, the securities may
not be available to the Fund on a timely basis, and the Fund may, therefore,
lose the opportunity to sell the securities at a desirable price. In addition,
in the event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.

PUT AND CALL OPTIONS. The Fund may purchase put and call options on its
portfolio securities. The Fund may also write (sell) put and call options on
all or any portion of its portfolio to generate income for the Fund. The Fund
only will write call options on securities either held in its portfolio or
which it has the right to obtain without payment of further consideration or
for which it has segregated cash in the amount of any additional
consideration. In the case of put options, the Fund will segregate cash or
U.S. Treasury obligations with a value equal to or greater than the exercise
price of the underlying securities.

The Fund can purchase or write options that are either traded over-the-counter
or on an exchange. The Fund will generally purchase and write over-the-counter
options on portfolio securities in negotiated transactions with the buyers or
writers of the options since options on the portfolio securities held by the
Fund are not traded on an exchange. Over-the-counter options are two party
contracts with price and terms negotiated between buyer and seller. The Fund
purchases and writes options only with investment dealers and other financial
institutions (such as commercial banks or savings associations) deemed
creditworthy by the Fund's adviser.

FINANCIAL FUTURES AND OPTIONS ON FUTURES. The Fund may purchase and sell
financial futures contracts. Financial futures contracts call for the delivery
of particular debt instruments at a certain time in the future. The seller of
the contract agrees to make delivery of the type of instrument called for in
the contract and the buyer agrees to take delivery of the instrument at the
specified future time.

The Fund also may write put and call options and purchase put and call options
on financial futures contracts. When the Fund writes a call option on a
futures contract, it is undertaking the obligation of selling the futures
contract at a fixed price at any time during a specified period if the option
is

exercised. Conversely, as purchaser of a put option on a futures contract, the
Fund is entitled (but not obligated) to sell a futures contract at the fixed
price during the life of the option. When the 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.
As a purchaser of a call option on a futures contract, the Fund is entitled
(but not obligated) to purchase a futures contract at a fixed price at any
time during the life of the option. When the 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
earmarked or otherwise segregated to collateralize the position.

The 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 non-hedging futures positions and premiums paid for related options
would exceed 5% of the market value of the Fund's total assets.

SPECIAL RISKS ASSOCIATED WITH FINANCIAL FUTURES AND OPTIONS ON FINANCIAL
FUTURES. When the Fund uses financial futures and options on financial
futures there is a risk that the prices of the securities subject to the
futures contracts may not correlate with the prices of the securities in
the Fund's portfolio. This may cause the futures contract and any related
options to react differently than the portfolio securities to market
changes. In addition, the Fund's investment adviser could be incorrect in
its expectations about the direction or extent of market factors such as
interest rate movements. In these events, the 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 investment adviser will consider liquidity before entering
into options transactions, there is no assurance that a liquid secondary
market on an exchange will exist for any particular futures contract or
option at any particular time. The Fund's ability to establish and close
out futures and options positions depends on this secondary market.

INVESTMENT LIMITATIONS

The Fund will not:

. borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a portfolio instrument for a
percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Fund
may borrow up to one-third of the value of its net assets and pledge up
to 10% of the value of its total assets to secure such borrowings; or
. with respect to securities comprising 75% of its assets, invest more
than 5% of its total assets in securities of one issuer (except cash and
cash items, and securities issued or guaranteed by the U.S. government
or its agencies or instrumentalities).

The Fund will not:

FUND INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES. The Board of Trustees is responsible for managing the
business affairs of the Trust and for exercising all of the powers of the
Trust except those reserved for the shareholders.

INVESTMENT ADVISER. Pursuant to an investment advisory contract with the
Trust, investment decisions for the Fund are made by Compass Bank as the
Fund's investment adviser (the "Adviser") subject to direction by the
Trustees. The Adviser continually conducts investment research and supervision
for the Fund and is responsible for the purchase or sale of portfolio
instruments, for which it receives an annual fee from the assets of the Fund.

ADVISORY FEES. The Adviser is entitled to receive an annual investment
advisory fee equal to .75% of the Fund's average daily net assets. The
Adviser may choose to voluntarily waived a portion of its fee. The Adviser
reserves the right, in its sole discretion, to terminate these voluntary
waivers at any time.

As part of its regular banking operations, Compass Bank may make loans to
public companies. Thus, it may be possible, from time to time, for the
Fund to hold or acquire the securities of issuers which are also lending
clients of Compass Bank. The lending relationship will not be a factor in
the selection of securities.

The Fund is managed by members of the Starburst Portfolio Management Team.

DISTRIBUTION OF FUND SHARES

[ ] (the "Distributor") is the principal distributor for shares of the
Fund. [ ] is a subsidiary of [ ].

DISTRIBUTION PLAN. Pursuant to the provisions of a distribution plan adopted
in accordance with the Investment Company Act Rule 12b-1 (the "Plan"), the
Fund may pay to [ ] an amount computed at an annual rate of .25% of
the average daily net asset value of the Investment Shares to finance any
activity which is principally intended to result in the sale of shares subject
to the Plan. [ ] may, from time to time and for such periods as it
deems appropriate, voluntarily reduce or completely waive compensation payable
under the Plan.

SHAREHOLDER SERVICING ARRANGEMENTS. In addition to the fees paid by the
Distributor to financial institutions under the Plan as described above, may
also pay financial institutions, including Compass Bank and various other
affiliates of Bancshares, a fee with respect to the average daily net asset
value of shares held by their customers for providing administrative services.
This fee is in addition to the amounts paid under the Plan.

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES. [SEI Fund Resources (the "Administrator")], provides
the Fund with certain administrative personnel and services necessary to
operate the Fund. Such services include shareholder servicing and certain
legal and accounting services. For these services the Administrator is
entitled to a fee which is calculated daily and paid monthly at an annual rate
of . % of the Fund's average daily net assets. The Administrator may choose
to voluntarily waived a portion of its fee. The Administrator reserves the
right, in its sole discretion, to terminate these voluntary waivers at any
time.

NET ASSET VALUE
- -------------------------------------------------------------------------------

The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets, less
liabilities, by the number of shares outstanding.

INVESTING IN INVESTMENT SHARES
- -------------------------------------------------------------------------------

SHARE PURCHASES

Shares of the Fund may be purchased through Boston Financial Data Services,
Inc. ("Boston Financial"). Investors may purchase shares of the Fund on all
business days except on days which the New York Stock Exchange ("NYSE") is
closed and federal or state holidays restricting wire transfers. The Fund
reserves the right to reject any purchase request.

TO PLACE AN ORDER. An investor (including Compass customers) may call at
Boston Financial at . Payment may be made either by check, wire-
transfer of federal funds or direct debit from a Compass Bank account.

To purchase by check, the check must be included with the order and made
payable to "The Starburst Bond Fund." Orders are considered received after
payment by check is converted into federal funds. Third party checks [, credit
cards, credit card checks and cash] will not be accepted. When purchases are
made by check, redemptions will not be allowed until the investment being
redeemed has been in the account for 15 business days.

To purchase by wire, investors should call Boston Financial for wiring
instructions at . Payment for all orders must be received within
three days of placing the order. Shares cannot be purchased on days on which
the NYSE is closed and on federal or state holidays restricting wire
transfers.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in the Fund is $1,000, except for an IRA
account, which requires a minimum initial investment of $500. Subsequent
investments must be in amounts of at least $100.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received, plus a sales charge as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A SALES CHARGE AS A
PERCENTAGE OF PERCENTAGE OF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
- --------------------- --------------------- -------------------
<S> <C> <C>
Less than $500,000 2.50% 2.56%
$500,000 but less than $750,000 2.00% 2.04%
$750,000 but less than $1 million 1.00% 1.01%
$1 million but less than $2 million 0.25% 0.25%
$2 million or more 0.00% 0.00%
</TABLE>

The net asset value is determined as of the close of trading (normally 3:00
p.m., Central time) on the NYSE, Monday through Friday, except on: (i) days on
which there are not sufficient changes in the value of the Fund's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no shares are tendered for redemption and no orders to purchase
shares are received;
and (iii) the following holidays: New Year's Day, Martin Luther King Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

PURCHASES AT NET ASSET VALUE. Directors and employees of the Fund, Bancshares
or its affiliates, or [ ] or their affiliates, or any bank or
investment dealer who has a sales agreement with [ ] with regard
to the Fund, [and their spouses and children under 21.]

SALES CHARGE REALLOWANCE. For sales of shares of the Fund, Compass Brokerage,
Inc. or any authorized dealer will normally receive up to 85% of the
applicable sales charge. Any portion of the sales charge which is not paid to
Compass Brokerage, Inc. or registered broker/dealers will be retained by the
Distributor. However, the Distributor will periodically, uniformly offer to
pay to dealers additional amounts in the form of cash or promotional
incentives, such as reimbursement of certain expenses of qualified employees
and their spouses to attend informational meetings about the Fund or other
special events at recreational-type facilities, or items of material value.
Such payments, all or a portion of which may be paid from the sales charge the
Distributor normally retains or any other source available to it, will be
predicated upon the amount of the shares of the Fund that are sold by the
dealer.

The sales charge for shares sold other than through Compass Brokerage, Inc. or
registered broker/dealers will be retained by the Distributor. The Distributor
may pay fees to banks out of the sales charge in exchange for sales and/or
administrative services performed on behalf of the bank's customers in
connection with the initiation of customer accounts and purchases of shares of
the Fund.

REDUCING THE SALES CHARGE

The sales charge can be reduced on the purchase of Fund shares through:

.quantity discounts and accumulated purchases;
.signing a 13-month letter of intent; or
.using the reinvestment privilege.

To receive the sales charge reduction, Compass Brokerage, Inc. or the
Distributor must be notified by the shareholder in writing at the time the
purchase is made that Fund shares are already owned or that purchases are
being combined. The Fund will reduce the sales charge after it confirms the
purchases.

LETTER OF INTENT. If a shareholder intends to purchase at least $500,000 of
Fund shares over the next 13 months, the sales charge may be reduced by
signing a letter of intent to that effect. This letter of
intent includes a provision for a sales charge adjustment depending on the
amount actually purchased within the 13-month period and a provision for the
Fund's custodian to hold 2.50% of the total amount intended to be purchased in
escrow (in shares of the Fund) until such purchase is completed.

This letter of intent will not obligate the shareholder to purchase shares,
but if the shareholder does, each purchase during the period will be at the
sales charge applicable to the total amount intended to be purchased. This
letter may be dated as of a prior date to include any purchases made within
the past 90 days.

SYSTEMATIC INVESTMENT PROGRAM

Once a Fund account has been opened, shareholders may add to their investment
on a regular basis in a minimum amount of $100. Under this program, funds may
be automatically withdrawn periodically from the shareholder's checking
account and invested in Fund shares at the net asset value next determined
after an order is received by Boston Financial, plus the applicable sales
charge. A shareholder may apply for participation in this program by calling
Boston Financial.

DIVIDENDS

CAPITAL GAINS

Capital net gains realized by the Fund, if any, will be distributed at least
once every twelve months.

RETIREMENT PLANS

Shares of the Fund can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact the Fund and consult a tax
adviser.

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

Shareholders may exchange shares of the Fund for shares in The Starburst
Equity Fund, The Starburst Money Market Fund, and any other portfolio of the
Trust. Shares of funds with a sales charge may be exchanged at net asset value
for shares of other funds with an equal sales charge or no sales charge.
Shares of funds with no sales charge acquired by direct purchase or
reinvestment of dividends on such

shares may be exchanged for shares of funds sold with a sales charge at net
asset value, plus the applicable sales charge imposed by the fund whose shares
being purchased. Neither the Trust nor any of the Funds imposes any additional
fees on exchanges. Exchange requests cannot be executed on days on which the
NYSE is closed or on applicable banking holidays for affiliates of Bancshares.

Upon receipt by [Boston Financial] of proper instructions and all necessary
supporting documents, shares submitted for exchange will be redeemed at the
next-determined net asset value. If the exchanging shareholder does not have
an account in the participating fund whose shares are being acquired, a new
account will be established with the same registration, dividend and capital
gain options as the account from which shares are exchanged, unless otherwise
specified by the shareholder. In the case where the new account registration
is not identical to that of the existing account, a signature guarantee is
required. (See "Redeeming Shares--By Mail.") Exercise of this privilege is
treated as a redemption and new purchase for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may
be realized. The Fund reserves the right to modify or terminate the exchange
privilege at any time. Shareholders would be notified prior to any
modification or termination. Shareholders may obtain further information on
the exchange privilege by calling Boston Financial or an authorized broker.

EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by calling [ ]. In addition, investors
may exchange shares by calling their authorized representative directly.

Telephone exchange instructions must be received by Compass or an authorized
broker and transmitted to Boston Financial before 3:00 p.m. (Central time) for
shares to be exchanged the same day.

WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: . In addition, an investor may
exchange shares by sending a written request to their authorized broker
directly.

Shareholders of the Fund may have difficulty in making exchanges by telephone
through banks, brokers and other financial institutions during times of
drastic economic or market changes. If shareholders cannot contact Boston
Financial or an authorized broker by telephone, it is recommended that an
exchange request be made in writing and sent by mail for next day delivery.

Send mail requests to: .

Any shares held in certificate form cannot be exchanged by telephone but must
be forwarded to the transfer agent, by Boston Financial or authorized broker
and deposited to the shareholder's account before being exchanged.

REDEEMING SHARES
- -------------------------------------------------------------------------------

BY TELEPHONE. Shareholders may redeem shares of the Fund by telephoning Boston
Financial at . For calls received by Boston Financial before 3:00
p.m. (Central time), proceeds will normally be deposited into the
shareholder's account, if any, at Compass or a check will be sent to the
address of record on the next business day. In no event will it take more than
seven days for proceeds to be wired or a check to be sent after a proper
request for redemption has been received. If, at any time, the Fund shall
determine it necessary to terminate or modify this method of redemption,
shareholders would be promptly notified.

An authorization form permitting the Fund to accept telephone redemption
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial application. If not completed at
the time of initial application, authorization forms and information on this
service can be obtained through Boston Financial. Telephone redemption
instructions may be recorded. If reasonable procedures are not followed by the
Fund, it may be liable for losses due to unauthorized or fraudulent telephone
instructions.

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

. a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the FDIC;
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
. a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by
the FDIC; or
. 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.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.

SYSTEMATIC WITHDRAWAL PROGRAM

Shareholders who desire to receive monthly or quarterly payments of a
predetermined amount may take advantage of the Systematic Withdrawal Program.
Under this program, Fund shares are redeemed to provide for periodic
withdrawal payments in an amount directed by the shareholder. Depending upon
the amount of the withdrawal payments, the amount of dividends paid and
capital gains distributions with respect to Fund shares, and the fluctuation
of the net asset value of Fund shares redeemed under this program, redemptions
may reduce, and eventually deplete, the shareholder's investment in the Fund.
For this reason, payments under this program should not be considered as yield
or income on the shareholder's investment in the Fund. To be eligible to
participate in this program, a shareholder must have invested at least $10,000
in the Fund (at current offering price).

ACCOUNTS WITH LOW BALANCES

SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------

VOTING RIGHTS

EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------

TAX INFORMATION
- -------------------------------------------------------------------------------

FEDERAL INCOME TAX

STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.

PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

From time to time, the Fund advertises its total return and yield.

Total return and yield will calculated separately for Investment Shares and
Institutional Shares. Because Investment Shares are subject to sales charges
and differing expense levels, the total return and yield for Institutional
Shares, for the same period, ordinarily will exceed that of Investment Shares.

From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.

OTHER CLASSES OF SHARES
- -------------------------------------------------------------------------------

The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold to accounts where Compass Bank or bank
affiliates of Bancshares have a trust or agency relationship. Institutional
Shares are sold at net asset value.

The stated advisory fee is the same for both classes of shares.

To obtain more information and a prospectus for Institutional Shares,
investors may call .

ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Starburst Bond Fund [ ]
[ ]
- ----------------------------------------------------------------------------------------------------------------------------
Distributor
[ ] [ ]
[ ]
- ----------------------------------------------------------------------------------------------------------------------------
Investment Adviser and Custodian
Compass Bank 701 S. 32nd Street
Birmingham, Alabama 35233
- ----------------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
[ ] [ ]
[ ]
- ----------------------------------------------------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, Pennsylvania 15222-5401
- ----------------------------------------------------------------------------------------------------------------------------
Counsel
Morgan, Lewis & Bockius LLP 1800 M Street, N.W.
Washington, D.C. 20036
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE STARBURST

BOND FUND

INVESTMENT SHARES
PROSPECTUS

[LOGO OF THE STARBURST FUNDS]
A PORTFOLIO OF THE STARBURST FUNDS,
AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY

, 1997
----------

[ ]
------------------------
Distributor

COMPASS BANK
------------------------
Investment Adviser

Cusip #855245809

2040607A (00/97)
93/33-2400

THE STARBURST BOND FUND
(A PORTFOLIO OF THE STARBURST FUNDS)

INSTITUTIONAL SHARES

PROSPECTUS

Shareholders can invest in or redeem Shares at any time without charge or
penalty imposed by the Fund.

Compass Bank professionally manages the Fund's portfolio.

This prospectus contains the information you should read and know before you
invest in shares of the Fund. Keep this prospectus for future reference.

The Fund has also filed a Statement of Additional Information dated ,
1997, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have
received your prospectus electronically, free of charge by calling .
To obtain other information or make inquiries about the Fund, contact the Fund
at the address listed in the back of this prospectus. The Statement of
Additional Information, material incorporated by reference into this document,
and other information regarding the Fund is maintained electronically with the
SEC at Internet Web site (http://www.sec.gov).

Prospectus dated , 1997

<PAGE>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

SUMMARY OF FUND EXPENSES 1
- -------------------------------------

FINANCIAL HIGHLIGHTS 2
- -------------------------------------

GENERAL INFORMATION 3
- -------------------------------------

INVESTMENT INFORMATION 3
- -------------------------------------

Investment Objective 3

Investment Policies 3

Investment Limitations 9

FUND INFORMATION 10
- -------------------------------------

Management of the Fund 10

Distribution of Fund Shares 11

Administration of the Fund 11

NET ASSET VALUE 11
- -------------------------------------

INVESTING IN INSTITUTIONAL SHARES 11

- -------------------------------------

Share Purchases 11

What Shares Cost 12

Shareholder Accounts 12

Dividends 12

Capital Gains 12

Retirement Plans 12

EXCHANGE PRIVILEGE 13
- -------------------------------------

REDEEMING SHARES 14
- -------------------------------------

Systematic Withdrawal Program 15

SHAREHOLDER INFORMATION 15
- -------------------------------------

Voting Rights 15

EFFECT OF BANKING LAWs 16
- -------------------------------------

TAX INFORMATION 16
- -------------------------------------

Federal Income Tax 16

PERFORMANCE INFORMATION 16
- -------------------------------------

OTHER CLASSES OF SHARES 17
- -------------------------------------

ADDRESSES 18
- -------------------------------------

<PAGE>

SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price).. None
Maximum Sales Charge 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

*Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C>
Management Fee (after waiver) (1).............................................. 0.75%
12b-1 Fee (after waiver)....................................................... 0.00%
Total Other Expenses........................................................... 0.33%
Total Fund Operating Expenses (1).......................................... 1.08%
</TABLE>

(1) The Adviser has agreed, on a voluntary basis, to waive its advisory fee
for the Starburst Bond Fund to the extent necessary to keep the "Total
Operating Expenses" for the current fiscal year from exceeding 1.10%. The
Adviser reserves the right, in its sole discretion, to terminate these
waivers at any time.

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 MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS
AND EXPENSES, SEE "FUND INFORMATION" AND "INVESTING IN THE FUND."
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
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............................... $11 $34 $60 $133
</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.

<PAGE>

THE STARBURST BOND FUND*

FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------------------
1996 1995 1994 1993 1992(A)
- ------------------------ ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 9.92 $ 9.54 $10.40 $10.25 $10.00
- ------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ------------------------
Net investment income 0.58 0.63 0.54 0.63 0.36
- ------------------------
Net realized and
unrealized gain (loss)
on investments (0.15) 0.38 (0.86) 0.21 0.25
------ ------ ------ ------ ------
- ------------------------
Total from investment
operations 0.43 1.01 (0.32) 0.84 0.61
------ ------ ------ ------ ------
- ------------------------
LESS DISTRIBUTIONS
- ------------------------
Distributions from net
investment income (0.58) (0.63) (0.54) (0.63) (0.36)
------ ------ ------ ------ ------
- ------------------------
Distributions from net
realized gain on
investments -- -- -- (0.06) --
------- ------- ------ ------ -------
- ------------------------
Total distributions (0.58) (0.63) (0.54) (0.69) (0.36)
------ ------ ------ ------ ------
- ------------------------
NET ASSET VALUE, END OF
PERIOD $ 9.77 $ 9.92 $ 9.54 $10.40 $10.25
------ ------ ------ ------ ------
- ------------------------
TOTAL RETURN (B) 4.44% 10.94% (3.12%) 8.42% 6.24%
- ------------------------
RATIOS TO AVERAGE NET
ASSETS
- ------------------------
Expenses 1.08% 1.04% 1.20% 1.11% 0.79%**
- ------------------------
Net investment income 5.90% 6.51% 5.44% 6.11% 6.79%**
- ------------------------
Expense
waiver/reimbursement
(c) 0.50% 0.47% 0.30% 0.29% 0.60%**
- ------------------------
SUPPLEMENTAL DATA
- ------------------------
Net assets, end of
period (000 omitted) $44,522 $63,521 $58,827 $97,246 $65,984
- ------------------------
Portfolio turnover 77% 79% 91% 69% 88%
- ------------------------
</TABLE>

* Formerly The Starburst Government Income Fund.

** Computed on an annualized basis.
(a) Reflects operations for the period from April 20, 1992 (date of initial
public investment) to October 31, 1992.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

(c)This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

<PAGE>

GENERAL INFORMATION
- -------------------------------------------------------------------------------

Institutional Shares of the Fund are primarily designed for customers of the
Asset Management Group of Compass Bank or of any affiliate or any division of
any affiliate or any correspondent of Compass Bank or any affiliate providing
fiduciary, trust, agency, private banking or similar services who desire a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio primarily investing in bonds and other fixed income
securities.

Fund shares are currently sold at net asset value and redeemed at net asset
value.

INVESTMENT INFORMATION
- -------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The investment objective of the Fund is to provide current income. The
investment objective cannot be changed without approval of shareholders. While
there is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus.

INVESTMENT POLICIES

BONDS. The Fund may acquire bonds, which may include debentures and notes,
issued by U.S. and foreign companies as well as by U.S. and foreign
governments and supranational entities. All such instruments must be
denominated in U.S. dollars and must be rated "A" or better by one or more
nationally recognized statistical rating organization ("NRSRO") at the time of
purchase.

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in U.S. government
securities. U.S. government securities in which the Fund invests include:

. direct obligations of the U.S. Treasury, including STRIPs and zero coupon
securities; and

<PAGE>

ZERO COUPON OBLIGATIONS. Zero coupon obligations are debt securities that do
not bear any interest, but instead are issued at a deep discount from par. The
value of a zero coupon obligation increases over time to reflect the interest
accreted. Such obligations will not result in the payment of interest until
maturity, and will have greater price volatility than similar securities that
are issued at par and pay interest periodically. Zero coupon obligations may
include interest only and principal only components of fixed income
securities, as well as interests in trusts that issue interests in fixed
income securities, such as "CATs" and "TIGRs."

<PAGE>

security that the Fund is required to repurchase may be worth less than the
security that the Fund originally held.]

<PAGE>

TEMPORARY INVESTMENTS. The Fund may invest in cash and short-term obligations
during times of unusual market conditions for defensive purposes. Short-term
obligations include:

.obligations of the U.S. government or its agencies or instrumentalities;
and
.high quality commercial paper;

.short-term obligations issued by domestic banks and U.S. branches of
foreign banks; and
.repurchase agreements.

<PAGE>

INVESTMENT LIMITATIONS

The Fund will not:

<PAGE>

The Fund will not:

FUND INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES. The Board of Trustees is responsible for managing the
business affairs of the Trust and for exercising all of the powers of the
Trust except those reserved for the shareholders.

ADVISORY FEES. The Adviser is entitled to receive an annual investment
advisory fee equal to .75% of the Fund's average daily net assets. The
Adviser may choose to voluntarily waive or reimburse a portion of its fee.
The Adviser reserves the right, in its sole discretion, to terminate these
voluntary waivers at any time.

The Fund is managed by members of the Starburst Portfolio Management Team.

<PAGE>

DISTRIBUTION OF FUND SHARES

[ ] (the "Distributor") is the principal distributor for shares of the
Fund. [ ] is a subsidiary of [ ].

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES. [SEI Fund Resources (the "Administrator")], provides
the Fund with certain administrative personnel and services necessary to
operate the Fund. Such services include shareholder servicing and certain
legal and accounting services. For these services the Administrator is
entitled to a fee which is calculated daily and paid monthly at an annual rate
of % of the Fund's average daily net assets. The Administrator may choose to
voluntarily waive a portion of its fee. The Administrator reserves the right,
in its sole discretion, to terminate these voluntary waivers at any time.

CUSTODIAN. Compass Bank, Birmingham, Alabama, is custodian for the securities
and cash of the Fund for which it receives an annual fee of 0.02% of the
Fund's daily net assets and is reimbursed for its out-of-pocket expenses.
NET ASSET VALUE
- -------------------------------------------------------------------------------

The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets, less
liabilities, by the number of shares outstanding.

INVESTING IN INSTITUTIONAL SHARES
- -------------------------------------------------------------------------------

SHARE PURCHASES

Institutional Shares may be purchased through the Asset Management Group of
Compass Bank, Birmingham, Alabama or through other affiliates of Bancshares or
division of an affiliate of Bancshares providing fiduciary trust, private
banking, agency and similar services. Investors may purchase Institutional
Shares of the Fund on all business days except on days which the New York
Stock Exchange ("NYSE") is closed and federal or state holidays restricting
wire transfers. In connection with the sale of Institutional Shares, the
Distributor may, from time to time, offer certain items of nominal value to
any shareholder or investor. The Fund reserves the right to reject any
purchase request.

To purchase by check, the check must be included with the order and made
payable to "The Starburst Bond Fund--Institutional Shares." Orders are
considered received after payment by check is converted into federal funds.
Third party checks [, credit cards, credit card checks and cash] will not be
accepted. When purchases are made by check, redemptions will not be allowed
until the investment being redeemed has been in the account for 15 business
days.

<PAGE>

When payment is made through wire transfer of federal funds, the order is
considered received immediately upon receipt of the wire by Compass. Payment
by wire must be received at Compass before [3:00 p.m. (Central time)] on the
same day as the order to earn dividends for that day. Prior to purchasing by
wire, investors should call their Compass representative prior to [3:00 p.m.
(Central time)]. Federal funds should be wired as follows: Compass Bank; ABA
Number [06001186]; Credit: Deposit Account--A/C Number ;
Further credit to: The Starburst Bond Fund--Institutional Shares; Re:
(Shareholder name and account number).

Shares cannot be purchased on days on which the NYSE is closed and on federal
or state holidays restricting wire transfers.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund on sales of
Institutional Shares.

The net asset value is determined as of the close of trading (normally 3:00
p.m., Central time) on the NYSE, Monday through Friday, except on New Year's
Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

SHAREHOLDER ACCOUNTS

DIVIDENDS

CAPITAL GAINS

Capital net gains realized by the Fund, if any, will be distributed at least
once every twelve months.

RETIREMENT PLANS

Shares of the Fund can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact the Fund and consult a tax
adviser.

<PAGE>

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

Shareholders may exchange shares of the Fund for shares in The Starburst
Equity Fund, The Starburst Money Market Fund, and any other portfolio of the
Trust. Neither the Trust nor any of the Funds imposes any additional fees on
exchanges. Exchange requests cannot be executed on days on which the NYSE is
closed or on applicable banking holidays for affiliates of Bancshares.

EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by calling [ ]. In addition, investors
may exchange shares by calling their authorized representative directly.

Telephone exchange instructions must be received by Compass or an authorized
broker and transmitted to Boston Financial before 3:00 p.m. (Central time) for
shares to be exchanged the same day.

Shareholders of the Fund may have difficulty in making exchanges by telephone
through banks, brokers and other financial institutions during times of
drastic economic or market changes. If shareholders cannot contact Boston
Financial or an authorized broker by telephone, it is recommended that an
exchange request be made in writing and sent by mail for next day delivery.

<PAGE>

Send mail requests to: .

REDEEMING SHARES
- -------------------------------------------------------------------------------

BY TELEPHONE. Shareholders may redeem shares of the Fund by telephoning Boston
Financial at . For calls received by Boston Financial before 3:00
p.m. (Central time), proceeds will normally be deposited into the
shareholder's account, if any, at Compass or a check will be mailed to the
address of record on the next business day. In no event will it take more than
seven days for proceeds to be wired or a check to be mailed after a proper
request for redemption has been received. If, at any time, the Fund shall
determine it necessary to terminate or modify this method of redemption,
shareholders would be promptly notified.

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

. a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the FDIC;

<PAGE>

. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
. a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by
the FDIC; or
. 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.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.

SYSTEMATIC WITHDRAWAL PROGRAM

SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------

VOTING RIGHTS

<PAGE>

EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------

TAX INFORMATION
- -------------------------------------------------------------------------------

FEDERAL INCOME TAX

STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.

PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

From time to time, the Fund advertises its total return and yield.

The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the
Fund over a thirty-day period by the maximum

<PAGE>

offering price per share of the Fund on the last day of the period. This
number is then annualized using semi-annual compounding. The yield does not
necessarily reflect income actually earned by the Fund and, therefore, may not
correlate to the dividends or other distributions paid to shareholders.

From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.

OTHER CLASSES OF SHARES
- -------------------------------------------------------------------------------

The stated advisory fee is the same for both classes of shares.

To obtain more information and a prospectus for Investment Shares, investors
may call 800-239-1930.

<PAGE>

THE STARBURST

BOND FUND

INSTITUTIONAL SHARES
PROSPECTUS

[LOGO of THE STARBURST FUNDS]
A PORTFOLIO OF THE STARBURST FUNDS,
AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY

, 1997
----------

[ ]
------------------------
Distributor

COMPASS BANK
------------------------
Investment Adviser

Cusip #

A (00/97)
93/33-2400

Prospectus dated , 1997

THE STARBURST MONEY MARKET FUND
(A PORTFOLIO OF THE STARBURST FUNDS)

INSTITUTIONAL SHARES

PROSPECTUS

The Institutional Shares ("Shares") offered by this prospectus represent
interests in the portfolio known as The Starburst Money Market Fund (the
"Fund"). The Fund is one of a series of investment portfolios in The Starburst
Funds (the "Trust"), an open-end, management investment company (a mutual
fund).

THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE;
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.

The investment objective of the Fund is to provide current income consistent
with stability of principal. The Fund pursues this investment objective by
investing in a variety of high-quality money market instruments maturing in
thirteen months or less.

Shareholders can invest in or redeem Shares at any time without charge or
penalty imposed by the Fund.

Compass Bank professionally manages the Fund's portfolio.

This prospectus contains the information you should read and know before you
invest in Institutional Shares of the Fund. Keep this prospectus for future
reference.

The Fund has also filed a Statement of Additional Information for
Institutional Shares dated ,with the Securities and Exchange Commission
("SEC"). The information contained in the Statement of Additional Information
is incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by calling
[ .] To obtain other information or make inquiries about the
Fund, contact the Fund at the address listed in the back of this prospectus.
The Statement of Additional Information, material incorporated by reference
into this document, and other information regarding the Fund is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

SUMMARY OF FUND EXPENSES 1
- -------------------------------------

FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SHARES 2
- -------------------------------------

GENERAL INFORMATION 3
- -------------------------------------

INVESTMENT INFORMATION 3
- -------------------------------------

Investment Objective 3

Investment Policies 3

Investment Limitations 7

FUND INFORMATION 7
- -------------------------------------

Management of the Fund 7

Distribution of Institutional
Shares 8

Administration of the Fund 8

NET ASSET VALUE 9
- -------------------------------------

INVESTING IN INSTITUTIONAL SHARES 9

- -------------------------------------

Share Purchases 9

What Shares Cost 10

Shareholder Accounts 10

Dividends 10

Capital Gains 10

Retirement Plans 10

EXCHANGE PRIVILEGE 10
- -------------------------------------

REDEEMING INSTITUTIONAL SHARES 12

- -------------------------------------

SHAREHOLDER INFORMATION 13
- -------------------------------------

Voting Rights 13

EFFECT OF BANKING LAWs 14
- -------------------------------------

TAX INFORMATION 14
- -------------------------------------

Federal Income Tax 14

State and Local Taxes 14

PERFORMANCE INFORMATION 14
- -------------------------------------

OTHER CLASSES OF SHARES 15

- -------------------------------------

ADDRESSES 16
- -------------------------------------

SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price).......................................................... None
Maximum Sales Charge 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, as applicable).................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........ None*
Exchange Fee.............................................................. None

*Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C>
Management Fee (after waiver) (1) ....................................... 0.20%
12b-1 Fee................................................................ None
Total Other Expenses (2)(3).............................................. 0.23%
Total Institutional Operating Expenses (2)(3)........................ 0.43%
</TABLE>

[(1) The management fee has been reduced to reflect a voluntary waiver. Absent
this waiver, the maximum management fee is .40%. The Adviser has
voluntarily agreed to waive all or a portion of its fee to limit total
operating expenses (as a percentage of average daily net assets on an
annualized basis) to not more than .43%. The Adviser reserves the right,
in its sole discretion, to terminate these voluntary fee waivers at any
time.

(2) The Administrator has agreed to waive, on a voluntary basis, a portion of
its fees. The Administrator reserves the right to terminate its waiver at
any time in its sole discretion. Absent such waiver, "Total Other
Expenses" for the Fund would be .28%.

(3) Absent the voluntary waivers and reimbursements described above, "Total
Institutional Shares Operating Expenses" for the Fund would be .68%.

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE INSTITUTIONAL SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "FUND INFORMATION" AND
"INVESTING IN THE INSTITUTIONAL SHARES."
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
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 fee..... $ 4 $14 $24 $54
</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.

THE STARBURST MONEY MARKET FUND

FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following information has been audited by Deloitte & Touche LLP, the
Trust's independent auditors, as indicated in their report dated December 6,
1996 on the Trust's financial statements as of October 31, 1996 included in
the Trust's Statement of Additional Information under "Financial Information."
This table should be read in conjunction with the Trust's financial statements
and related notes thereto. Additional performance information is set forth in
the Trust 1996 Annual Report to Shareholders and is available upon request and
without charge by calling [ .]
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990(A)
- ----------------------- ---- ---- ---- ---- ---- ---- -------
<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 0.04 0.05 0.03 0.03 0.04 0.06 0.06
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.04) (0.05) (0.03) (0.03) (0.04) (0.06) (0.06)
------ ------ ------ ------ ------ ------ ------
- -----------------------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------ ------
- -----------------------
TOTAL RETURN (B) 4.95% 5.51% 3.29% 2.84% 4.07% 6.44% 5.89%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.71% 0.56% 0.75% 0.70% 0.64% 0.62% 0.58%(c)
- -----------------------
Net investment income 4.85% 5.38% 3.26% 2.83% 4.01% 6.13% 7.80%(c)
- -----------------------
Expense
waiver/reimbursement
(d) 0.00% 0.10% 0.04% 0.00% 0.01% 0.05% 0.10%(c)
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $136,666 $141,434 $158,367 $131,508 $187,394 $212,997 $117,716
- -----------------------
</TABLE>

(a) Reflects operations for the period from February 5, 1990 (date of initial
public investment) to October 31, 1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d)This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

GENERAL INFORMATION
- -------------------------------------------------------------------------------

The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated August 7, 1989. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares of
beneficial interest in any one portfolio may be offered in separate classes.
As of the date of this prospectus, the Board of Trustees (the "Trustees") has
established two classes of shares of the Fund, Investment Service Shares and
Institutional Shares. This prospectus relates only to Institutional Shares of
the Fund.

Institutional Shares of the Fund are primarily designed customers of the Asset
Management Group of Compass Bank or of any affiliate or any division of any
affiliate or any correspondent of Compass Bank or any affiliate providing
fiduciary, trust, agency, private banking or similar services who desire a
convenient means of accumulating an interest in a professionally managed
portfolio limited to money market instruments maturing in thirteen months or
less.
The Fund attempts to stabilize the value of a Share at $1.00. Shares are
currently sold and redeemed at that price.

INVESTMENT INFORMATION
- -------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The investment objective of the Fund is to provide current income consistent
with stability of principal. The investment objective cannot be changed
without approval of shareholders. While there is no assurance that the Fund
will achieve its investment objective, it endeavors to do so by complying with
the diversification and other requirements of Rule 2a-7 under the Investment
Company Act of 1940 which regulates money market mutual funds and by following
the investment policies described in this prospectus.

INVESTMENT POLICIES

The Fund pursues its investment objective by investing primarily in a
portfolio of money market instruments maturing in thirteen months or less. The
average maturity of money market instruments in the Fund's portfolio, computed
on a dollar-weighted basis, will be 90 days or less. Unless indicated
otherwise, the investment policies set forth below may be changed by the
Trustees without the approval of shareholders. Shareholders will be notified
before any material change in these policies becomes effective.

ACCEPTABLE INVESTMENTS. The Fund invests in high quality money market
instruments that are either rated in the highest short-term rating category by
one or more nationally recognized statistical rating organizations or of
comparable quality to securities having such ratings. Examples of these
instruments include, but are not limited to:

. debt obligations issued by U.S. and foreign corporations, including
variable rate demand notes;
. commercial paper (including Canadian Commercial Paper ("CCP") and
Europaper);
. certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
. short-term credit facilities, such as demand notes;

. debt obligations issued by Canada and other foreign nations, as well as
by supranational entities such as [the World Bank];

. asset-backed and mortgage-backed securities, including collateralized
mortgage obligations ("CMOs");

. obligations issued or guaranteed as to payment of principal and interest
by the U.S. Government or one of its agencies or instrumentalities
("Government Securities"); and

. other money market instruments, including shares of other money market
funds.

The Fund invests only in instruments denominated and payable in U.S. dollars.

VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term corporate
debt instruments that have variable or floating interest rates and provide the
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.

OBLIGATIONS OF SUPRANATIONAL ENTITIES. Supranational entities are entities
established through the joint participation of several governments, and
include the Asian Development Bank, Inter-American Development Bank,
International Bank for Reconstruction and Development (World Bank), African
Development Bank, European Economic Community, European Investment Bank and
Nordic Investment Bank. The governmental members, or "stockholders," usually
make initial capital contributions to the supranational entity and in many
cases are committed to make additional capital contributions if the
supranational entity is unable to repay its borrowings.

BANK INSTRUMENTS. The Fund only invests in Bank Instruments either issued by
an institution having capital, surplus and undivided profits over $100 million
or insured by the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF"). Bank Instruments may include Canadian Time Deposits,
Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of Deposit
("Yankee CDs") and Eurodollar Time Deposits ("ETDs").

SHORT-TERM CREDIT FACILITIES. Demand notes are short-term borrowing
arrangements between a corporation and an institutional lender (such as the
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. The Fund may also enter into, or acquire participations in,
short-term revolving credit facilities with corporate borrowers. Demand notes
and other short-term credit arrangements usually provide for floating or
variable rates of interest.

ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial interests
in a special purpose trust, limited partnership interests or commercial paper
or other debt securities issued by a special purpose corporation. Although the
securities often
have some form of credit or liquidity enhancement, payments on the securities
depend predominately upon collections of the loans and receivables held by the
issuer.

COMMERCIAL PAPER; SECTION 4(2) PAPER. Commercial paper is unsecured short-term
promissory notes issued by municipalities, corporations and other entities
with maturities up to nine months. The Fund 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) paper is restricted as to
disposition under federal securities law and is generally sold to
institutional investors, such as the Fund, who agree that they are purchasing
the paper for investment purposes and not with a view to public distribution.
Section 4(2) paper is normally resold to other institutional investors like
the Fund, thus providing liquidity.

PARTICIPATION INTERESTS. The Fund may purchase participation interests from
financial institutions such as commercial banks, savings associations, and
insurance companies, or from single-purpose, stand-alone finance subsidiaries
or trusts of such institutions, or from other special purpose entities.
Participation interests give the Fund an undivided fractional ownership
interest in debt obligations. The debt obligations may include corporate loans
or debt securities or other types of debt obligations.

MORTGAGE-BACKED SECURITIES. Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated payment
mortgages, balloon mortgages and adjustable rate mortgages. During periods of
declining interest rates, prepayment of mortgages underlying mortgage-backed
securities can be expected to accelerate. Prepayment of mortgages which
underlie securities purchased at a premium often results in capital losses,
while prepayment of mortgages purchased at a discount often results in capital
gains. Because of these unpredictable prepayment characteristics, it is often
not possible to predict accurately the average life or realized yield of a
particular issue. Mortgage-related securities eligible for purchase by the
Fund may include collateralized mortgage obligations ("CMOs"). In a CMO,
series of bonds or certificates are usually issued in multiple classes.
Principal and interest paid on the underlying mortgage assets may be allocated
among the several classes of a series of a CMO in a variety of ways. Principal
payments on the underlying mortgage assets may cause CMOs to be retired
substantially earlier then their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.

U.S. GOVERNMENT OBLIGATIONS. Obligations issued or guaranteed by agencies of
the U.S. Government, including, among others, the Federal Farm Credit Bank,
the Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the
Federal Land Banks and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury (e.g. Government
National Mortgage Association securities), others are supported by the right
of the issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank
securities), while still others are supported only by the credit of the
instrumentality (e.g., Federal National Mortgage Association securities).
Guarantees of principal by agencies or instrumentalities of the U.S.
Government may be a guarantee of payment at the maturity of the obligation so
that in the event of a default prior to maturity there might be a market and
thus

no means of realizing on the obligation prior to maturity. Guarantees as to
the timely payment of principal and interest do not extend to the value or
yield of these securities nor to the value of the Fund's shares.

DEMAND FEATURES. The Fund may acquire securities that are subject to demand
features to purchase the securities at their principal amount (usually with
accrued interest) within a fixed period following a demand by the Fund. 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 transferred
separately from the underlying security. The bankruptcy, receivership or
default by the issuer of the demand feature, or a default on the underlying
security or other event that terminates the demand feature before its
exercise, will adversely affect the liquidity of the underlying security.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted and
illiquid securities. Restricted securities are any securities in which the
Fund may otherwise invest pursuant to its investment objective and policies
but which are subject to restriction on resale under federal securities law.
Illiquid securities are securities that may not be sold at approximately their
carrying value in seven days or less. The Fund will limit investments in
illiquid securities, including restricted securities not determined by the
Trustees to be liquid, non-negotiable time deposits, and repurchase agreements
providing for settlement in more than seven days after notice, to 10% of its
net assets.

LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term basis up to one-third
of the value of its total assets to institutional borrowers of securities. The
Fund will only enter into loan arrangements with broker/dealers, banks, or
other institutions which the investment adviser has determined are
creditworthy under guidelines established by the Trustees. There is the risk
that when lending portfolio securities, the securities may not be available to
the Fund on a timely basis, and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.

CONCENTRATION OF INVESTMENTS. The Fund will not invest 25% or more of its
total assets in any one industry except that the Fund may invest 25% or more
of its total assets in obligations issued by U.S. banks and by U.S. branches
of foreign banks.

FOREIGN SECURITIES RISK. ECDs, ETDs, Yankee CDs, CCPs, Canadian Time Deposits,
and Europaper are subject to somewhat different risks than domestic
obligations of domestic banks. Examples of these risks include international,
economic and political developments, foreign governmental restrictions that
may adversely affect the payment of principal or interest, foreign withholding
or other taxes on interest income, difficulties in obtaining or enforcing a
judgment against the issuing bank, and the possible impact of interruptions in
the flow of international currency transactions. Different risks may also
exist for Canadian Time Deposits, ECDs, ETDs and Yankee CDs because the banks
issuing these instruments, or their domestic or foreign branches, are not
necessarily subject to the same regulatory requirements that apply to domestic
banks, such as reserve requirements, loan limitations, examinations,
accounting, auditing, recordkeeping and the public availability of
information. These factors will be carefully considered by the Fund's adviser
in selecting investments for the Fund.

INVESTMENT LIMITATIONS

The Fund will not:

. with respect to 75% of the value of its total assets, invest more than
5% of the value of its total assets in the 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 such securities. However, to the
extent that the diversification requirements imposed by Rule 2a-7 are
more stringent, the Fund will follow the dictates of Rule 2a-7.

The above investment limitations cannot be changed without shareholder
approval.

FUND INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES. The Board of Trustees is responsible for managing the
business affairs of the Trust and for exercising all of the powers of the
Trust except those reserved for the shareholders. The Executive Committee of
the Board of Trustees handles the Board's responsibilities between meetings of
the Board.

INVESTMENT ADVISER. Pursuant to an investment advisory contract with the
Trust, investment decisions for the Fund are made by Compass Bank, as the
Fund's investment adviser (the "Adviser"), subject to direction by the
Trustees. The Adviser continually conducts investment research and supervision
for the Fund and is responsible for the purchase or sale of portfolio
instruments, for which it receives an annual fee from the assets of the Fund.

ADVISORY FEES. The Adviser is entitled to receive an annual investment
advisory fee equal to .40% of the Fund's average daily net assets. The
Adviser may choose to voluntarily waive or reimburse a portion of its fee.
The Adviser reserves the right, in its sole discretion, to terminate these
voluntary waivers at any time.

As of September 30, 1996, Compass Bank offered a broad range of commercial
banking services. The Adviser has managed mutual funds since February 5,
1990, and as of September 30, 1996, the Asset Management Group of Compass
Bank had approximately $5.6 billion under administration of which it had
investment discretion over approximately $1.7 billion. The Asset
Management Group of Compass Bank provides investment advisory and
management services for the assets of individuals, pension and profit
sharing plans, endowments and foundations.

DISTRIBUTION OF INSTITUTIONAL SHARES

(the "Distributor") is the principal distributor for Shares of the
Fund. It is a corporation organized on , and is the principal
distributor for a number of investment companies. is a subsidiary of
.

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES. SEI Fund Resources (the "Administrator") provides the
Fund with certain administrative personnel and services necessary to operate
the Fund. Such services include shareholder servicing and certain legal and
accounting services. For these services, the Administrator is entitled to a
fee which is calculated daily and paid monthly at an annual rate of . % of
the Fund's average daily net assets. The Administrator reserves the right, in
its sole discretion, to terminate these voluntary waivers at any time.

NET ASSET VALUE
- -------------------------------------------------------------------------------

The Fund attempts to stabilize the net asset value of its Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per Share is determined by adding the interest of the Shares in
the value of all securities and other assets of the Fund, subtracting the
interest of the Shares in the liabilities of the Fund and those attributable
to Shares, and dividing the remainder by the total number of Shares
outstanding. The Fund, of course, cannot guarantee that its net asset value
will always remain at $1.00 per Share.

INVESTING IN INSTITUTIONAL SHARES
- -------------------------------------------------------------------------------

SHARE PURCHASES

Institutional Shares may be purchased through the Asset Management Group of
Compass Bank, Birmingham, Alabama or through other affiliates of Bancshares
providing fiduciary, trust, private banking and similar services. Investors
may purchase Shares of the Fund on all business days except on days which the
New York Stock Exchange ("NYSE") is closed and federal or state holidays
restricting wire transfers. In connection with the sale of Shares, the
Distributor may, from time to time, offer certain items of nominal value to
any shareholder or investor. The Fund reserves the right to reject any
purchase request.

To purchase by check, the check must be included with the order and made
payable to "The Starburst Money Market Fund--Institutional Shares." Orders are
considered received after payment by check is converted into federal funds.
Third party checks [, credit cards, credit card checks and cash] will not be
accepted. When purchases are made by check, redemptions will not be allowed
until the investment being redeemed has been in the account for 15 business
days.

When payment is made through wire transfer of federal funds, the order is
considered received immediately upon receipt of the wire by Compass. Payment
by wire must be received at Compass before 1:00 p.m. (Central time) on the
same day as the order to earn dividends for that day. Prior to purchasing by
wire, investors should call their Compass representative prior to [1:00 p.m.]
(Central time). Federal funds should be wired as follows: Compass Bank; ABA
Number 06001186; Credit: [ Deposit Account--A/C Number ]; Further
credit to: The Starburst Money Market Fund--Institutional Shares; Re:
(Shareholder name and account number).

Shares cannot be purchased on days on which the NYSE is closed and on federal
or state holidays restricting wire transfers.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund.

The net asset value is determined at 12:00 noon, 3:00 p.m. (Central time), and
as of the close of trading (normally 3:00 p.m., Central time) on the NYSE
Monday through Friday, except on New Year's Day, Martin Luther King Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

SHAREHOLDER ACCOUNTS

As transfer agent for the Fund, Boston Financial Data Services, Inc. ("Boston
Financial") maintains a Share account for each shareholder of record. Share
certificates are not issued unless requested by contacting the Fund in
writing. Shares sold to Compass acting in a fiduciary, advisory, custodial,
agency, or similar capacity on behalf of customers may be held of record by
Compass. Beneficial ownership of the Shares will be recorded by Compass and
reflected in the account statements provided by Boston Financial to customers,
and reports of purchases and redemptions of Shares by Compass on behalf of
customers will be provided periodically by Compass to such customers.

DIVIDENDS

Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional Shares unless cash payments are
requested by shareholders in writing to the Fund or Boston Financial, as
appropriate. Share purchase orders received by the Fund before 11:00 a.m.
(Central time) earn dividends that day.

CAPITAL GAINS

Capital net gains, if any, could result in an increase in dividends. Capital
losses could result in a decrease in dividends. If, for some extraordinary
reason, the Fund realizes net long-term capital gains, it will distribute them
at least once every twelve months.

RETIREMENT PLANS
Shares of the Fund can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact the Fund and consult a tax
adviser.

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

Shareholders may exchange Shares of the Fund for shares in The Starburst
Equity Fund, The Starburst Bond Fund and any other portfolios of the Trust.
Neither the Trust nor any of the Funds imposes any additional fees on
exchanges. Exchange requests cannot be executed on days on which the NYSE is
closed or on applicable banking holidays for affiliates of Bancshares.

Prior to any exchange, the shareholder must receive a copy of the current
prospectus of the participating fund into which an exchange is to be made.

Upon receipt by Boston Financial of proper instructions and all necessary
supporting documents, shares submitted for exchange will be redeemed at the
next-determined net asset value. If the exchanging shareholder does not have
an account in the participating fund whose shares are being acquired, a new
account will be established with the same registration, dividend and capital
gain options as the account from which shares are exchanged, unless otherwise
specified by the shareholders. In the case where the new account registration
is not identical to that of the existing account, a signature guarantee is
required. (See "Redeeming Shares--By Mail.") Exercise of this privilege is
treated as a redemption and new purchase for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may
be realized. The Fund reserves the right to modify or terminate the exchange
privilege at any time. Shareholders would be notified prior to any
modification or termination. Shareholders may obtain further information on
the exchange privilege by calling their Compass trust representative.

EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by calling [ .] In addition, investors may
exchange Shares by calling their authorized representative directly.

Telephone exchange instructions must be received by Compass and transmitted to
Boston Financial before 3:00 p.m. (Central time) for Shares to be exchanged
the same day. Shareholders who exchange into Shares of the Fund will not
receive a dividend from the Fund on the date of the exchange.

WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: The Starburst Money Market Fund--Institutional
Shares, .

Shareholders of the Fund may have difficulty in making exchanges by telephone
during times of drastic economic or market changes. If shareholders cannot
contact Boston Financial by telephone, it is recommended that an exchange
request be made in writing and sent by mail for next day delivery. Send mail
requests to: The Starburst Money Market Fund--Institutional Shares,
.

Any Shares held in certificate form cannot be exchanged by telephone but must
be forwarded to Boston Financial, and deposited to the shareholder's account
before being exchanged.

REDEEMING INSTITUTIONAL SHARES
- -------------------------------------------------------------------------------

The Fund redeems Shares at their net asset value next determined after Boston
Financial Company receives the redemption request. Redemption requests cannot
be executed on days on which the NYSE is closed and federal or state holidays
restricting wire transfers. Redemptions will be made on days on which the Fund
computes its net asset value. Telephone or written requests for redemptions
must be received in proper form and can be made through Boston Financial.

BY TELEPHONE. Shareholders may redeem Shares of the Fund by telephoning Boston
Financial. Shareholders may call toll-free . Redemption requests
through Boston Financial must be received before 10:00 a.m. (Central time). It
is the responsibility of Boston Financial to transmit orders to the Fund by
11:00 a.m. (Central time). If at any time, the Fund shall determine it
necessary to terminate or modify this method of redemption, shareholders would
be promptly notified.

Redemption requests must be received by and transmitted to Boston Financial
before 1:00 p.m. (Central time) in order for the proceeds to be wired that
same day. Compass is responsible for promptly submitting redemption requests
and providing proper written redemption instructions to Boston Financial.

For calls received by Boston Financial before 1:00 p.m. (Central time)
proceeds will normally be wired the same day to Boston Financial. For calls
received after 1:00 p.m. (Central time) proceeds will normally be wired the
following business day. In no event will proceeds be wired more than seven
days after a proper request for redemption has been received.

Under limited circumstances, arrangements may be made with Boston Financial
for same day receipt of redemption proceeds, if such redemption requests are
received prior to 1:00 p.m. (Central time). Investors interested in
establishing such arrangements are requested to call Boston Financial.

A daily dividend will be paid on Shares redeemed if the redemption request is
received by Boston Financial after [ ] (Central time). However, the
proceeds are normally not wired until the following business day. Redemption
requests received before [ ] (Central time) will normally be paid the same
day but will not be entitled to that day's dividend.

BY MAIL. Shareholders may redeem Shares of the Fund by sending a written
request to the Fund through Boston Financial. The written request should
include the shareholder's name, the Fund name, the class name, the account
number, and the Share or dollar amount requested. Investors redeeming

through Boston Financial should mail written requests to: The Starburst Money
Market Fund--Institutional Shares, .

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

. a trust company or commercial bank whose deposits are insured by BIF,
which is administered by the FDIC;
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
. a savings bank or savings association whose deposits are insured by SAIF
which is administered by the FDIC; or
. 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.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.

SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------

VOTING RIGHTS

Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each portfolio
in the Trust have equal voting rights, except that in matters affecting only a
particular fund or class, only shares of that fund or class are entitled to
vote.

EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------

The Glass-Steagall Act and other banking laws and regulations presently
prohibit a bank holding company registered under the Bank Holding Company Act
of 1956 or any affiliate thereof from sponsoring, organizing or controlling a
registered, open-end investment company continuously engaged in the issuance
of its shares, and from issuing, underwriting, selling or distributing
securities in general. Such laws and regulations do not prohibit such a
holding company or affiliate from acting as investment adviser, transfer
agent, or custodian to such an investment company or from purchasing shares of
such a company as agent for and upon the order of their customers.
Compass Bank, Bancshares and certain of Bancshares' affiliates are subject to
such banking laws and regulations. They believe, based on the advice of their
counsel, that they may perform those services for the Fund contemplated by any
existing agreement entered into with the Trust without violating those laws or
regulations. Changes in either federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of present or future statutes and regulations, could prevent
these entities from continuing to perform all or a part of the above services.
If this happens, the Trustees would consider alternative means of continuing
available investment services. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.

TAX INFORMATION
- -------------------------------------------------------------------------------

FEDERAL INCOME TAX

The Fund intends to pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.

Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions received. This applies whether
dividends and distributions are received in cash or as additional Shares.

STATE AND LOCAL TAXES
Shareholders are urged to consult their own tax advisers regarding the status
of their accounts under state and local tax laws.

PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

From time to time, the Fund advertises its yield, effective yield and total
return for Shares.

The yield of Shares represents the annualized rate of income earned on an
investment in Shares over a seven-day period. It is the annualized dividends
earned during the period on the investment, shown
as a percentage of the investment. The effective yield is calculated similarly
to the yield, but, when annualized, the income earned by an investment in
Shares is assumed to be reinvested daily. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment.

Total return represents the change, over a specified period of time, in the
value of an investment in Shares after reinvesting all income distributions.
It is calculated by dividing that change by the initial investment and is
expressed as a percentage.

Yield, effective yield and total return will be calculated separately for
Institutional Shares and Investment Service Shares. Because Investment Service
Shares are subject to shareholder service fees, the yield, effective yield and
total return for Investment Shares, for the same period, will exceed that of
Institutional Service Shares.

From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
OTHER CLASSES OF SHARES
- -------------------------------------------------------------------------------

The Fund also offers another class of shares called Investment Services
Shares. Investment Services Shares are sold at net asset value. Investments in
Investment Services Shares are subject to a minimum initial investment of
$1,000.

The stated advisory fee is the same for both classes of shares.

To obtain more information and a prospectus for Investment Services Shares,
investors may call .

ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Starburst Money Market Fund [Federated Investors Tower
Institutional Shares Pittsburgh, Pennsylvania 15222-3779]
- -----------------------------------------------------------------------------------------------------------------------------
Distributor
[Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779]
- -----------------------------------------------------------------------------------------------------------------------------
Investment Adviser and Custodian
Compass Bank 701 S. 32nd Street
Birmingham, Alabama 35233
- -----------------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
- -----------------------------------------------------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, Pennsylvania 15222-5401
- -----------------------------------------------------------------------------------------------------------------------------
Counsel
Morgan, Lewis & Bockius LLP 1800 M Street, N.W.
Washington, D.C. 20036
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE STARBURST

MONEY MARKET FUND

INSTITUTIONAL SHARES
PROSPECTUS

[LOGO OF STARBURST FUNDS]
A PORTFOLIO OF THE STARBURST FUNDS,
AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY

[ , 1997]
----------

[ ]
------------------------
Distributor

COMPASS BANK
------------------------
Investment Adviser

Cusip #855245601

1010704A-I (00/97)

[RECYCLED PAPER LOGO]

Prospectus dated , 1997

THE STARBURST MONEY MARKET FUND
(A PORTFOLIO OF THE STARBURST FUNDS)

INVESTMENT SERVICE SHARES

PROSPECTUS

The Investment Service Shares ("Shares") offered by this prospectus represent
interests in the portfolio known as The Starburst Money Market Fund (the
"Fund"). The Fund is one of a series of investment portfolios in The Starburst
Funds (the "Trust"), an open-end, management investment company (a mutual
fund).

THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE;
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.

Shareholders can invest in or redeem Shares at any time without charge or
penalty imposed by the Fund.

Compass Bank professionally manages the Fund's portfolio.

This prospectus contains the information you should read and know before you
invest in Investment Service Shares of the Fund. Keep this prospectus for
future reference.

The Fund has also filed a Statement of Additional Information for Investment
Service Shares dated ,with the Securities and Exchange Commission
("SEC"). The information contained in the Statement of Additional Information
is incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by calling
[ .] To obtain other information or make inquiries about the
Fund, contact the Fund at the address listed in the back of this prospectus.
The Statement of Additional Information, material incorporated by reference
into this document, and other information regarding the Fund is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- -------------------------------------

FINANCIAL HIGHLIGHTS--INVESTMENT
SERVICE SHARES 2
- -------------------------------------

GENERAL INFORMATION 3
- -------------------------------------

INVESTMENT INFORMATION 3
- -------------------------------------

Investment Objective 3

Investment Policies 3

Investment Limitations 7

FUND INFORMATION 7
- -------------------------------------

Management of the Fund 7

Distribution of Investment Service
Shares 8

Administration of the Fund 9

NET ASSET VALUE 9
- -------------------------------------

INVESTING IN INVESTMENT SERVICE
SHARES 9
- -------------------------------------

Share Purchases 9

What Shares Cost 10

Shareholder Accounts 10

Dividends 10

Capital Gains 10

Retirement Plans 11

EXCHANGE PRIVILEGE 11
- -------------------------------------

REDEEMING INVESTMENT SERVICE
SHARES 12
- -------------------------------------

SHAREHOLDER INFORMATION 14
- -------------------------------------

Voting Rights 14

EFFECT OF BANKING LAWs 14
- -------------------------------------

TAX INFORMATION 14
- -------------------------------------

Federal Income Tax 14

State and Local Taxes 15

PERFORMANCE INFORMATION 15
- -------------------------------------

OTHER CLASSES OF SHARES 15

- -------------------------------------

ADDRESSES 16
- -------------------------------------

SUMMARY OF FUND EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)......................................................... None
Maximum Sales Charge 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, as applicable)................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)....... None*
Exchange Fee............................................................. None

*Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.

<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C>
Management Fee (after waiver) (1)....................................... 0.20%
Shareholder Servicing Fee .............................................. 0.25%
Total Other Expenses (2)(3)............................................. 0.23%
Total Investment Service Operating Expenses (2)(3).................. 0.69%
</TABLE>

[(1) The management fee has been reduced to reflect a voluntary waiver. Absent
this waiver, the maximum management fee is .40%. The Adviser has
voluntarily agreed to waive all or a portion of its fee to limit total
operating expenses (as a percentage of average daily net assets on an
annualized basis) to not more than .69%. The Adviser reserves the right,
in its sole discretion, to terminate these voluntary fee waivers at any
time.

(3) Absent the voluntary waivers and reimbursements described above, "Total
Institutional Service Shares Operating Expenses" for the Fund would be
.93%.

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE INVESTMENT SERVICE SHARES
OF THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "FUND INFORMATION" AND
"INVESTING IN THE INVESTMENT SERVICE SHARES."
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
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 fee..... $ 7 $22 $38 $85
</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.

THE STARBURST MONEY MARKET FUND

FINANCIAL HIGHLIGHTS--INVESTMENT SERVICE SHARES*
- -------------------------------------------------------------------------------

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following information has been audited by Deloitte & Touche LLP, the
Trust's independent auditors, as indicated in their report dated December 6,
1996 on the Trust's financial statements as of October 31, 1996 included in
the Trust's Statement of Additional Information under "Financial Information."
This table should be read in conjunction with the Trust's financial statements
and related notes thereto. Additional performance information is set forth in
the Trust 1996 Annual Report to Shareholders and is available upon request and
without charge by calling [ .]
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------
1996 1995 1994 1993 1992 1991(A)
- ----------------------- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.04 0.05 0.03 0.03 0.04 0.03
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.04) (0.05) (0.03) (0.03) (0.04) (0.03)
------ ------ ------ ------ ------ ------
- -----------------------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
- -----------------------
TOTAL RETURN (B) 4.79% 5.35% 3.13% 2.69% 3.95% 2.90%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.86% 0.71% 0.91% 0.86% 0.78% 0.61%**
- -----------------------
Net investment income 4.70% 5.22% 3.11% 2.66% 3.65% 5.51%**
- -----------------------
Expense
waiver/reimbursement
(c) 0.10% 0.20% 0.22% 0.20% 0.19% 0.05%**
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $36,054 $54,914 $39,722 $39,780 $36,432 $7,238
- -----------------------
</TABLE>

* Formerly the Investment Shares.
** Computed on an annualized basis.

(a) Reflects operations for the period from April 29, 1991 (date of initial
public investment) to October 31, 1991.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

GENERAL INFORMATION
- -------------------------------------------------------------------------------

The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated August 7, 1989. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares of
beneficial interest in any one portfolio may be offered in separate classes.
As of the date of this prospectus, the Board of Trustees (the "Trustees") has
established two classes of shares of the Fund, Institutional Shares and
Investment Service Shares. This prospectus relates only to Investment Service
Shares of the Fund.

Investment Service Shares of the Fund are primarily designed customers of the
Asset Management Group of Compass Bank or of any affiliate or any division of
any affiliate or any correspondent of Compass Bank or any affiliate providing
fiduciary, trust, agency, private banking or similar services who desire a
convenient means of accumulating an interest in a professionally managed
portfolio limited to money market instruments maturing in thirteen months or
less.

The Fund attempts to stabilize the value of a Share at $1.00. Shares are
currently sold and redeemed at that price.

INVESTMENT INFORMATION
- -------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

INVESTMENT POLICIES

. debt obligations issued by Canada and other foreign nations, as well as
by supranational entities such as [the World Bank];

. asset-backed and mortgage-backed securities, including collateralized
mortgage obligations ("CMOs");

. obligations issued or guaranteed as to payment of principal and interest
by the U.S. Government or one of its agencies or instrumentalities
("Government Securities"); and

. other money market instruments, including shares of other money market
funds.

The Fund invests only in instruments denominated and payable in U.S. dollars.

have some form of credit or liquidity enhancement, payments on the securities
depend predominately upon collections of the loans and receivables held by the
issuer.

INVESTMENT LIMITATIONS

The Fund will not:

The above investment limitations cannot be changed without shareholder
approval.

FUND INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF THE FUND

DISTRIBUTION OF INVESTMENT SERVICE SHARES

(the "Distributor") is the principal distributor for Shares of the
Fund. It is a corporation organized on , and is the principal
distributor for a number of investment companies. is a subsidiary of
.

SHAREHOLDER SERVICE PLAN. Pursuant to the provisions of a shareholder service
plan (the "Plan"), the Fund will pay to an amount computed at an annual
rate of [.25]% of the average daily net asset value of the Fund's Institutional
Service Shares.

The may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers and broker/dealers, including
Compass Bank and various other affiliates of Bancshares, to provide shareholder
and/or administrative services as agents for their clients or customers who
beneficially own shares of the Fund. Administrative services may include, but
are not limited to, the following functions: providing office space, equipment,
telephone facilities, and various personnel including clerical, supervisory,
and computer as necessary or beneficial to establish and maintain shareholder
accounts and records; processing purchase and redemption transactions and
automatic investments of client account cash balances; answering routine client
inquiries regarding the Fund; assisting clients with changing dividend options,
account designations and addresses; and providing such other services as the
Fund reasonably requests. The schedules of fees and the basis upon which fees
will be paid will be determined, from time to time, by the Distributor.

ADMINISTRATION OF THE FUND

ADMINISTRATIVE SERVICES. SEI Fund Resources (the "Administrator") provides the
Fund with certain administrative personnel and services necessary to operate
the Fund. Such services include shareholder servicing and certain legal and
accounting services. For these services, the Administrator is entitled to a
fee which is calculated daily and paid monthly at an annual rate of % of the
Fund's average daily net assets. The Administrator reserves the right, in its
sole discretion, to terminate these voluntary waivers at any time.

NET ASSET VALUE
- -------------------------------------------------------------------------------

INVESTING IN INVESTMENT SERVICE SHARES
- -------------------------------------------------------------------------------

SHARE PURCHASES

Investment Service Shares may be purchased through the Asset Management Group
of Compass Bank, Birmingham, Alabama or through other affiliates of Bancshares
providing fiduciary, trust, private banking and similar services. Investors
may purchase Shares of the Fund on all business days except on days which the
New York Stock Exchange ("NYSE") is closed and federal or state holidays
restricting wire transfers. In connection with the sale of Shares, the
Distributor may, from time to time, offer certain items of nominal value to
any shareholder or investor. The Fund reserves the right to reject any
purchase request.

To purchase by check, the check must be included with the order and made
payable to "The Starburst Money Market Fund--Institutional Service Shares."
Orders are considered received after payment by check is converted into
federal funds. Third party checks[, credit cards, credit card checks and cash]
will not be accepted. When purchases are made by check, redemptions will not
be allowed until the investment being redeemed has been in the account 15
business days.

When payment is made through wire transfer of federal funds, the order is
considered received immediately upon receipt of the wire by Compass. Payment
by wire must be received at Compass before 1:00 p.m. (Central time) on the
same day as the order to earn dividends for that day. Prior to purchasing by
wire, investors should call their Compass representative prior to [1:00 p.m.]
(Central time). Federal funds should be wired as follows: Compass Bank; ABA
Number 06001186; Credit: [ Deposit Account--A/C Number ]; Further
credit to: The Starburst Money Market Fund--Investment Service Shares; Re:
(Shareholder name and account number).

Shares cannot be purchased on days on which the NYSE is closed and on federal
or state holidays restricting wire transfers.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund.

SHAREHOLDER ACCOUNTS

As transfer agent for the Fund, Boston Financial Data Services, Inc. ("Boston
Financial") maintains a Share account for each shareholder of record. Share
certificates are not issued unless requested by contacting the Fund in
writing. Shares sold to Compass acting in a fiduciary, advisory, custodial,
agency, or similar capacity on behalf of customers may be held of record by
Compass. Beneficial ownership of the Shares will be recorded by Compass and
reflected in the account statements provided by Boston Financial to customers,
and reports of purchases and redemptions of Shares by Compass on behalf of
customers will be provided periodically by Compass to such customers.

DIVIDENDS

CAPITAL GAINS

RETIREMENT PLANS

Shares of the Fund can be purchased as an investment for retirement plans or
for IRA accounts. For further details, contact the Fund and consult a tax
adviser.

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

Shareholders may exchange Shares of the Fund for shares in The Starburst
Equity Fund, The Starburst Bond Fund and any other portfolios of the Trust.
Shares of funds with a sales charge may be exchanged at net asset value for
shares of other funds with an equal sales charge or no sales charge. Shares of
funds with no sales charge acquired by direct purchase or reinvestment of
dividends on such shares may be exchanged for shares of funds with a sales
charge at net asset value, plus the applicable sales charge imposed by the
fund shares being purchased. Neither the Trust nor any of the Funds imposes
any additional fees on exchanges. Exchange requests cannot be executed on days
on which the NYSE is closed or on applicable banking holidays for affiliates
of Bancshares.

When an exchange is made from a fund with a sales charge to a fund with no
sales charge, the shares are exchanged and additional shares which have been
purchased by reinvesting dividends on such shares retain the character of the
exchanged shares for purposes of exercising further exchange privileges; thus,
an exchange of such shares for shares of a fund with a sales charge would be
at net asset value.

[Shareholders who exercise this privilege must exchange shares having a net
asset value of at least $1,000.] Prior to any exchange, the shareholder must
receive a copy of the current prospectus of the participating fund into which
an exchange is to be made.

An authorization form permitting the Fund to accept telephone exchange
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial

application. If not completed at the time of initial application,
authorization forms and information on this service can be obtained through
Boston Financial.
Shares may be exchanged by telephone only between fund accounts having
identical shareholder registrations. Exchange instructions given by telephone
may be electronically recorded. If reasonable procedures are not followed by
the Fund, it may be liable for losses due to unauthorized or fraudulent
telephone instructions.

WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: The Starburst Money Market Fund--Investment
Service Shares, .

Any Shares held in certificate form cannot be exchanged by telephone but must
be forwarded to Boston Financial, and deposited to the shareholder's account
before being exchanged.

REDEEMING INSTITUTIONAL SERVICE SHARES
- -------------------------------------------------------------------------------

The Fund redeems Shares at their net asset value next determined after Boston
Financial receives the redemption request. Redemption requests cannot be
executed on days on which the NYSE is closed and federal or state holidays
restricting wire transfers. Redemptions will be made on days on which the Fund
computes its net asset value. Telephone or written requests for redemptions
must be received in proper form and can be made through Boston Financial.

BY TELEPHONE. Shareholders may redeem Shares of the Fund by telephoning Boston
Financial. Shareholders may call toll-free . Redemption requests
through Boston Financial must be received before 10:00 a.m. (Central time). It
is the responsibility of Boston Financial to transmit orders to the Fund by
1:00 p.m. (Central time). If at any time, the Fund shall determine it
necessary to terminate or modify this method of redemption, shareholders would
be promptly notified.

If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.

The Fund does not accept signatures guaranteed by a notary public.

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.

SHAREHOLDER INFORMATION
- -------------------------------------------------------------------------------

VOTING RIGHTS

Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each portfolio
in the Trust have equal voting rights, except that in matters affecting only a
particular fund or class, only shares of that fund or class are entitled to
vote.

EFFECT OF BANKING LAWS
- -------------------------------------------------------------------------------

Compass Bank, Bancshares and certain of Bancshares' affiliates are subject to
such banking laws and regulations. They believe, based on the advice of their
counsel, that they may perform those services for the Fund contemplated by any
existing agreement entered into with the Trust without violating those laws or
regulations. Changes in either federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as further judicial or administrative decisions or
interpretations of present or future statutes and regulations, could prevent
these entities from continuing to perform all or a part of the above services.
If this happens, the Trustees would consider alternative means of continuing
available investment services. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.

TAX INFORMATION
- -------------------------------------------------------------------------------

FEDERAL INCOME TAX

afforded to such companies. The Fund will be treated as a single, separate
entity for federal income tax purposes so that income (including capital
gains) and losses realized by the Trust's other portfolios will not be
combined for tax purposes with those realized by the Fund.

STATE AND LOCAL TAXES

Shareholders are urged to consult their own tax advisers regarding the status
of their accounts under state and local tax laws.

PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------

From time to time, the Fund advertises its yield, effective yield and total
return for Shares.
The yield of Shares represents the annualized rate of income earned on an
investment in Shares over a seven-day period. It is the annualized dividends
earned during the period on the investment, shown as a percentage of the
investment. The effective yield is calculated similarly to the yield, but,
when annualized, the income earned by an investment in Shares is assumed to be
reinvested daily. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.

From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.

OTHER CLASSES OF SHARES
- -------------------------------------------------------------------------------

The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value. Investments in Institutional
Shares are subject to a minimum initial investment of $1,000.

The stated advisory fee is the same for both classes of shares.

To obtain more information and a prospectus for Institutional Shares,
investors may call .

THE STARBURST

MONEY MARKET FUND

INVESTMENT SERVICE SHARES
PROSPECTUS

LOGO
A PORTFOLIO OF THE STARBURST FUNDS,
AN OPEN-END, MANAGEMENT
INVESTMENT COMPANY

[ , 1997]
----------

[ ]
------------------------
Distributor

COMPASS BANK
------------------------
Investment Adviser

Cusip #855245601

1010704A-I (00/97)

[RECYCLED PAPER LOGO]

THE STARBURST EQUITY FUND
(A PORTFOLIO OF THE STARBURST FUNDS)
STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information should be read with the prospectus of
The Starburst Equity Fund (the "Fund") dated , 1997. This Statement is
-------
not a prospectus itself. To receive a copy of the prospectus, write to the Fund
or call toll-free .
-------------

Statement dated , 1997
----------------

GENERAL INFORMATION ABOUT THE FUND............................................

INVESTMENT OBJECTIVE AND POLICIES.............................................
Types of Investments.....................................................
When-Issued and Delayed Delivery Transactions............................
Futures and Options Transactions.........................................
Lending of Portfolio Securities..........................................
Restricted Securities....................................................
Repurchase Agreements....................................................
Reverse Repurchase Agreements............................................
Portfolio Turnover.......................................................

INVESTMENT LIMITATIONS........................................................
THE STARBURST FUNDS MANAGEMENT................................................
Fund Ownership...........................................................
Trustees Compensation....................................................
Trustee Liability........................................................

INVESTMENT ADVISORY SERVICES..................................................
Adviser to the Fund......................................................
Advisory Fees............................................................

BROKERAGE TRANSACTIONS........................................................

OTHER SERVICES................................................................
Fund Administration......................................................
Custodian................................................................
Transfer Agent and Dividend Disbursing Agent.............................
Independent Auditors.....................................................

PURCHASING SHARES.............................................................
Distribution Plan........................................................
Conversion to Federal Funds..............................................

DETERMINING NET ASSET VALUE...................................................
Determining Market Value of Securities...................................

EXCHANGE PRIVILEGE............................................................

REDEEMING SHARES..............................................................
Redemption in Kind.......................................................

MASSACHUSETTS PARTNERSHIP LAW.................................................

TAX STATUS....................................................................
The Fund's Tax Status....................................................
Shareholders' Tax Status.................................................

TOTAL RETURN..................................................................

YIELD.........................................................................

PERFORMANCE COMPARISONS.......................................................
Economic and Market Information..........................................

GENERAL INFORMATION ABOUT THE FUND

The Fund is a portfolio in The Starburst Funds (the "Trust"). The Trust was
established as a Massachusetts business trust under a Declaration of Trust dated
August 7, 1989.

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to provide long-term growth of capital with a
secondary objective of income. The investment objective cannot be changed
without approval of shareholders.

TYPES OF INVESTMENTS

The Fund invests primarily in common stocks issued by mid- and large-
capitalization companies.

[WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

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 the Fund sufficient
to make payment for the securities to be purchased are segregated on the Fund's
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled.]

FUTURES AND OPTIONS TRANSACTIONS

The Fund may attempt to hedge all or a portion of its portfolio by buying and
selling financial futures contracts and options on financial futures contracts.
Additionally, the Fund may buy and sell call and put options on U.S. government
securities.

FUTURES CONTRACTS

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 security
("going long") at a certain time in the future.

PURCHASING PUT OPTIONS ON FUTURES CONTRACTS

The Fund may purchase listed put options on financial futures contracts. 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.

The Fund may purchase put options on futures to protect portfolio securities
against decreases in value resulting from an anticipated increase in market
interest rates. 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, the Fund will
normally close out its option 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 realized decrease in value of the hedged securities.

Alternatively, the Fund may exercise its put option. To do so, it could
simultaneously enter into a futures contract of the type underlying the option
(for a price less than the strike price of the option) and exercise the option.
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 the premium paid for the
contract will be lost.

WRITING CALL OPTIONS ON FUTURES CONTRACTS

In addition to purchasing put options on futures, the Fund may write call
options on futures contracts. When the 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.

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

WRITING PUT OPTIONS ON FUTURES CONTRACTS

The Fund may write listed put options on futures contracts. When the Fund
writes a put option on a futures contract, it receives a premium for undertaking
the obligation to assume a long futures position (buying a futures contract) at
a fixed price at any time during the life of the option. As stock prices rise
or 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. The premium received by the Fund can then be used to offset the higher
prices of portfolio securities to be purchased in the future due to the increase
in market prices or decrease in interest rates.

Prior to the expiration of the put option, or its exercise by the buyer, the
Fund may close out the option by buying an identical option. 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.

PURCHASING CALL OPTIONS ON FUTURES CONTRACTS

The Fund may buy a call option on a futures contract. When the Fund purchases a
call option on a futures contract, it is purchasing the right (not the
obligation) to assume a long futures position (buy a futures contract) at a
fixed price at any time during the life of the option. As stock prices rise or
interest rates fall, 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.

[LIMITATION ON OPEN FUTURES POSITIONS

The Fund will not maintain open positions in futures contracts it has sold or
call options it has written on futures contracts if, in the aggregate, the value
of the open positions (marked to market) exceeds the current market value of its
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.]

"MARGIN" IN FUTURES TRANSACTIONS

Unlike the purchase or sale of a security, the Fund does not pay or receive
money upon the purchase or sale of a futures contract. Rather, the Fund is
required to deposit an amount of "initial margin" in cash or U.S. Treasury bills
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 in that futures contract initial margin 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 the 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 positions.

The Fund is also required to deposit and maintain margin when it writes call
options on futures contracts.

PURCHASING PUT AND CALL OPTIONS

The Fund may purchase put and call options. A put option gives the 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 call option
gives the Fund, in return for a premium, the right to buy the underlying
security from the seller.

WRITING COVERED PUT AND CALL OPTIONS

The Fund may write covered put and 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. As a writer of a put option, the Fund has the obligation to
purchase a security from the purchaser of the option upon the exercise of the
option. The 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 Fund will segregate cash or
liquid obligations with a value equal to or greater than the exercise price of
the underlying securities.

LENDING OF PORTFOLIO SECURITIES

The collateral received when the Fund lends 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. The 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.

RESTRICTED SECURITIES

The Fund may invest in restricted securities. Restricted securities are any
securities in which the Fund may otherwise invest pursuant to its investment
objective and policies but which are subject to restriction on resale under
federal securities law. The ability of the Trustees to determine the
liquidity of certain restricted securities is permitted under an SEC Staff
position set forth in the adopting release for Rule 144A under the Securities
Act of 1933 (the "Rule"). The Rule is a non-exclusive, safe-harbor for certain
secondary market transactions involving securities subject to restrictions on
resale under federal securities laws. The Rule provides an exemption from
registration for resale of otherwise restricted securities to qualified
institutional buyers. The Rule was expected to further enhance the liquidity
of the secondary market for securities eligible for resale under Rule 144A.
The Fund believes that the Staff of the SEC has left the question of
determining the liquidity of all restricted securities (eligible for resale
under Rule 144A) for determination of the Fund's Board. The Board has delegated
to the Adviser responsibility for determining liquidity, and has approved the
following criteria for use by the Adviser in determining the liquidity of
certain restricted securities:

. the frequency of trades and quotes for the security:
. the number of dealers willing to purchase or sell the security and the
number of other potential buyers;
. dealer undertakings to make a market in the security; and
. the nature of the security and the nature of the marketplace trades.

REPURCHASE AGREEMENTS

The Fund requires its custodian to take actual or constructive possession of the
securities subject to repurchase agreements, and these securities are marked to
market daily. To the extent that the original seller does not repurchase the
securities from the Fund, the 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 the
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 Trustees.

PORTFOLIO TURNOVER

The Fund will not attempt to set or meet a portfolio turnover rate since any
turnover would be incidental to transactions undertaken in an attempt to achieve
the Fund's investment objective.

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS

With respect to 75% of the value of the Fund's total assets, the Fund will not
purchase securities of any one issuer (other than cash, cash items and
securities issued or guaranteed by the government of the United States or its
agencies or instrumentalities) if as a result more than 5% of the value of its
total assets would be invested in the securities of that issuer.

BUYING ON MARGIN

The Fund will not purchase any securities on margin, but may obtain such short-
term credits as are necessary for clearance of transactions. The deposit or
payment by the Fund of initial or variation margin in connection with financial
futures contracts or related options transactions is not considered the purchase
of a security on margin.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Fund will not issue senior securities except that the Fund may borrow money
in amounts up to one-third of the value of its net assets, including the amounts
borrowed. The Fund will not borrow money for investment leverage, but rather as
a temporary, extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling the Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while borrowings in
excess of 5% of its total assets are outstanding.
PLEDGING ASSETS

The Fund will not mortgage, pledge, or hypothecate any assets except to secure
permitted borrowings. In these cases, it may pledge assets having a market
value not exceeding the lesser of the dollar amounts borrowed or 10% of the
value of total assets at the time of the borrowing. Neither the deposit of
underlying securities and other assets in escrow in connection with the writing
of put or call options on securities nor margin deposits for the purchase and
sale of financial futures contracts and related options are deemed to be a
pledge.

INVESTING IN REAL ESTATE

The Fund will not buy or sell real estate including limited partnership
interests, although it may invest in securities of companies whose business
involves the purchase or sale of real estate or in securities which are secured
by real estate or interests in real estate.

INVESTING IN COMMODITIES

The Fund will not purchase or sell commodities, except that the Fund may
purchase and sell futures contracts and related options.

UNDERWRITING

The Fund will not underwrite any issue of securities, except as it may be deemed
to be an underwriter under the Securities Act of 1933, as amended, in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
LENDING CASH OR SECURITIES

The Fund will not lend any of its assets except portfolio securities up to one-
third of the value of its total assets. (This shall not prevent the purchase or
holding of U.S. government securities, repurchase agreements covering U.S.
government securities, or other transactions which are permitted by the Fund's
investment objective and policies.)

SELLING SHORT

The Fund will not sell securities short.

The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.

INVESTING IN ILLIQUID SECURITIES

The Fund will not invest more than 15% of the value of its total assets in
securities which are not readily marketable or which are otherwise considered
illiquid, including over-the-counter options and also including repurchase
agreements providing for settlement in more than seven days after notice.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund will limit its respective investment in other investment companies to
no more than 3% of the total outstanding voting stock of any investment company,
invest no more than 5% of total assets in any one investment company, or invest
more than 10% of total assets in investment companies in general. 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 a Fund in shares of another investment company would
be subject to such customary expenses.

WRITING COVERED PUT AND CALL OPTIONS AND PURCHASING PUT OPTIONS

purchase put or call options in excess of 5% of the value of its total
assets.The Fund will not write call options on securities unless the securities
are held in the 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. When writing put options, the Fund will segregate cash
or U.S. Treasury obligations with a value equal to or greater than the exercise
price of the underlying securities. The Fund will not purchase put options on
securities unless the securities are held in the Fund's portfolio.

Except with respect to borrowing money anad holding illiquid securities, 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 STARBURST FUNDS MANAGEMENT

TRUSTEES AND OFFICERS

THE STARBURST FUNDS MANAGEMENT

Officers and Trustees are listed with their addresses, birthdates, present
positions with The Starburst Funds, and principal occupations.

John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds. Mr. Donahue is the
father of J. Christopher Donahue, President of the Trust.

Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934

Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Trustee, University
of Pittsburgh; Director or Trustee of the Funds.

John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; Partner or Trustee in private real estate
ventures in Southwest Florida; formerly, President, Naples Property Management,
Inc. and Northgate Village Development Corporation; Director or Trustee of the
Funds.

William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; Director, Ryan
Homes, Inc.; Director or Trustee of the Funds.

James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director or Trustee
of the Funds.

Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director, University of
Pittsburgh Medical Center - Downtown; Member, Board of Directors, University of
Pittsburgh Medical Center; formerly, Hematologist, Oncologist, and Internist,
Presbyterian and Montefiore Hospitals; Director or Trustee of the Funds.

Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western Region;
Director or Trustee of the Funds.

Edward C. Gonzales *
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President, Treasurer and Trustee

Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated Research
Corp., Federated Global Research Corp. and Passport Research, Ltd.; Executive
Vice President and Director, Federated Securities Corp.; Trustee, Federated
Shareholder Services Company; Trustee or Director of some of the Funds;
President, Executive Vice President and Treasurer of some of the Funds.

Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street Boston
Corporation; Director or Trustee of the Funds.
Gregor F. Meyer
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney, Member of Miller, Ament, Henny & Kochuba; Chairman, Meritcare, Inc.;
Director, Eat'N Park Restaurants, Inc.; Director or Trustee of the Funds.

John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue;

Director or Trustee of the Funds.

Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., National Defense University, U.S. Space Foundation and Czech
Management Center; President Emeritus, University of Pittsburgh; Founding
Chairman, National Advisory Council for Environmental Policy and Technology,
Federal Emergency Management Advisory Board and Czech Management Center;
Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/Marketing/Conference Planning, Manchester Craftsmen's Guild;
Restaurant Consultant, Frick Art & History Center; Conference Coordinator,
University of Pittsburgh Art History Department; Director or Trustee of the
Funds.

J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President

President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder Services Company, and Federated Shareholder
Services; Director, Federated Services Company; President or Executive Vice
President of the Funds; Director or Trustee of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Trustee of the Trust.

John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary

Executive Vice President, Secretary, and Trustee, Federated Investors; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Trustee, Federated
Shareholder Services Company;

Director, Federated Services Company; President and Trustee, Federated
Shareholder Services; Director, Federated Securities Corp.; Executive Vice
President and Secretary of the Funds; Treasurer of some of the Funds.

Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of the
Funds; Director or Trustee of some of the Funds.

Jeffrey W. Sterling
Federated Investors Tower
Pittsburgh, PA
Birthdate: February 5, 1947
Vice President and Assistant Treasurer
Vice President and Assistant Treasurer of some of the Funds.

* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.

@ Member of the Executive Committee. The Executive Committee of the Board of
Trustees handles the responsibilities of the Board between meetings of the
Board.

As used in the table above, "The Funds" and "Funds" mean the following
investment companies: 111 Corcoran Funds; Annuity Management Series; Arrow
Funds; Automated Government Money Trust; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG Investor
Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated Adjustable
Rate U.S. Government Fund, Inc.; Federated American Leaders Fund, Inc.;
Federated ARMs Fund; Federated Equity Funds; Federated Equity Income Fund, Inc.;
Federated Fund for U.S. Government Securities, Inc.; Federated GNMA Trust;
Federated Government Income Securities, Inc.; Federated Government Trust;
Federated High Income Bond Fund, Inc.; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Insurance Series; Federated Investment
Portfolios; Federated Investment Trust; Federated Master Trust; Federated
Municipal Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.;
Federated Municipal Trust; Federated Short-Term Municipal Trust; Federated
Short-Term U.S. Government Trust; Federated Stock and Bond Fund, Inc.; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund; Federated U.S. Government Securities Fund:
1-3 Years; Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S.
Government Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; First
Priority Funds; Fixed Income Securities, Inc.; High Yield Cash Trust;
Intermediate Municipal Trust; International Series, Inc.; Investment Series
Funds, Inc.; Investment Series Trust; Liberty Term Trust, Inc. - 1999; Liberty
U.S. Government Money Market Trust; Liquid Cash Trust;

Managed Series Trust; Money Market Management, Inc.; Money Market Obligations
Trust; Money Market Trust; Municipal Securities Income Trust; Newpoint Funds;
Peachtree Funds; RIMCO Monument Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; The Planters Funds; The Starburst Funds; The Starburst Funds
II; The Virtus Funds; Trust for Financial Institutions; Trust for Government
Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; and World Investment Series, Inc.

FUND OWNERSHIP

Officers and Trustees own less than 1% of the Fund's outstanding shares. As of
December 2, 1996, the following shareholders of record owned 5% or more of the
outstanding shares of the Fund: Blue Cross Blue Shield of Alabama, Birmingham,
Alabama, owned approximately 1,143,335 shares (25.66%); and Compass Bank
Trustee, for the account of Compass Bank Pension Trust, Birmingham, Alabama,
owned approximately 588,902 shares (13.22%)

TRUSTEES COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
NAME, COMPENSATION
POSITION WITH FROM
TRUST TRUST*#
<S> <C>
John F. Donahue, $ 0
Trustee

Thomas G. Bigley, $1,369
Trustee

John T. Conroy, Jr., $1,499
Trustee

William J. Copeland, $1,499
Trustee
James E. Dowd, $1,499
Trustee

Lawrence D. Ellis, M.D., $1,369
Trustee

Edward L. Flaherty, Jr., $1,499
Trustee

Edward D. Gonzales, $ 0
Executive Vice President,
Treasurer and Trustee

Peter E. Madden, $1,369
Trustee

Gregor F. Meyer, $1,369
Trustee

John E. Murray, Jr., $1,369
Trustee

Wesley W. Posvar, $1,369
Trustee

Marjorie P. Smuts, $1,369
Trustee
</TABLE>

* Information is furnished for the fiscal year ended October 31, 1996.
The Trust is the only investment company in the Fund Complex.

# The aggregate compensation is provided for the Trust which is comprised of
three portfolios. A fourth portfolio, The Starburst Municipal Income Fund,
was liquidated on October 30, 1996.

TRUSTEE LIABILITY

The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.

INVESTMENT ADVISORY SERVICES

ADVISER TO THE FUND

The Fund's investment adviser is Compass Bank, an Alabama state banking
corporation. The Adviser is a wholly-owned subsidiary of Compass Bancshares,
Inc. ("Bancshares"), a bank holding company organized under the laws of
Delaware. The Adviser 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.
Because of the internal controls maintained by Compass Bank to restrict the flow
of non-public information, Fund investments are typically made without any
knowledge of Compass Bank's or its affiliates' lending relationships with an
issuer.

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the Adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The Adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
guidelines established by the Trustees. The Adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the Adviser and may include: advice as to
the advisability of investing in securities; security analysis and reports;
economic studies; industry studies; receipt of quotations for portfolio
evaluations; and similar services. Research services provided by brokers and
dealers may be used by the Adviser or its affiliates in advising the Fund and
other accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise
reasonable business judgment in selecting brokers who offer brokerage and
research services to execute securities transactions. They determine in good
faith that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. 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.

OTHER SERVICES

FUND ADMINISTRATION

[ ], a subsidiary of , provides
--------------------- ------------------
administrative personnel and services to the Fund for a fee as described in the
prospectus.

CUSTODIAN

Compass Bank, Birmingham, Alabama, is custodian for the securities and cash of
the Fund for which it receives an annual fee of .02% of the Fund's average
aggregate daily net assets and is reimbursed for its out-of-pocket expenses.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

[ ], , a subsidiary of , serves
----------------------- -------------- -----------
as transfer agent and dividend disbursing agent for the Fund. The fee paid to
the transfer agent is based upon the size, type and number of accounts and
transactions made by shareholders. also maintains the Fund's
----------------
accounting records. The fee paid for this service is based upon the level of
the Fund's average net assets for the period plus out-of-pocket expenses.

INDEPENDENT AUDITORS

The independent auditors for the Fund are Deloitte & Touche LLP, Pittsburgh,
Pennsylvania.

PURCHASING SHARES

Shares are sold at their net asset value with a sales charge on days the New
York Stock Exchange is open for business except for federal or state holidays
restricting wire transfers. The procedure for purchasing shares of the Fund is
explained in the prospectus under "Investing in the Fund." Compass Bank,
Compass Brokerage, Inc. and the other affiliates of Bancshares which provide
shareholder and administrative services to the Fund sometimes are referred
herein as "Compass."

DISTRIBUTION PLAN

The Starburst Funds has adopted a Plan for the Fund pursuant to Rule 12b-1 (the
"Plan") which was promulgated by the Securities and Exchange Commission under
the Investment Company Act of 1940. The Plan provides for payment of fees to
to finance any activity which is principally intended to result
- ----------------
in the sale of the Fund's shares subject to the Plan. Such activities may
include the advertising and marketing of shares; preparing, printing and
distributing prospectuses and sales literature to prospective shareholders,
brokers or administrators; and implementing and operating the Plan. Pursuant to
the Plan, the distributor may pay fees to brokers for distribution and
administrative services and to administrators for administrative services as to
shares. The administrative services are provided by a representative who has
knowledge of the shareholder's particular circumstances and goals, and include,
but are not limited to: communicating account openings; communicating account
closings; entering purchase transactions; entering redemption transactions;
providing or arranging to provide accounting support for all transactions;
wiring funds and receiving funds for share purchases and redemptions; confirming
and reconciling all transactions; reviewing the activity in Fund accounts;
providing training and supervision of broker personnel; posting and reinvesting
dividends to Fund accounts or arranging for this service to be performed by the
Fund's transfer agent; and maintaining and distributing current copies of
prospectuses and shareholder reports to the beneficial owners of shares and
prospective shareholders. The Trustees expect that the adoption of the Plan
will result in the sale of a sufficient number of shares so as to allow the
Fund to achieve economic viability. It is also anticipated that an increase in
the size of the Fund will facilitate more efficient portfolio management and
assist the Fund in seeking to achieve its investment objective.

CONVERSION TO FEDERAL FUNDS

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 funds or be converted into federal funds.

DETERMINING NET ASSET VALUE

Net asset value generally changes each day. The days on which net asset value
is calculated by the Fund are described in the prospectus.

DETERMINING MARKET VALUE OF SECURITIES

Market values of the Fund's portfolio securities are determined as follows:

. as provided by an independent pricing service;

. for short-term obligations, according to the mean between bid and asked
prices, as furnished by an independent pricing service, or for short-term
obligations with remaining maturities of less than 60 days at the time of
purchase, at amortized cost unless the Trustees determine this is not fair
value; or

. at fair value as determined in good faith by the Trustees.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices. Pricing services may consider:

. yield;
. quality;
. coupon rate;
. maturity;
. type of issue;
. trading characteristics; and
. other market data.

Over-the-counter put options will be valued at the mean between the bid and the
asked prices. Covered call options will be valued at the last sale price on the
national exchange on which such option is traded. Unlisted call options will be
valued at the latest bid price as provided by brokers.

EXCHANGE PRIVILEGE

Shareholders using the exchange privilege must exchange shares having a net
asset value of at least $1,000. Before the exchange, the shareholder must
receive a prospectus of the fund for which the exchange is being made.

Upon receipt of proper instructions and required supporting documents, shares
submitted for exchange are redeemed and the proceeds invested in shares of the
other fund.

Instructions for exchange may be given in writing or by telephone. Exchange
procedures are explained in the prospectus under "Exchange Privilege."

REDEEMING SHARES

The Fund redeems shares at the next computed net asset value after Federated
Shareholder Services Company receives the redemption request. Redemption
procedures are explained in the prospectus under "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 Fund's portfolio. 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 of the Investment
Company Act of 1940 under which the Trust is obligated to redeem shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of the Fund's
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.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation or instrument that 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.

TAX STATUS

THE FUND'S TAX STATUS

The Fund intends to 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 Fund must, among other
requirements:

. derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
. derive less than 30% of its gross income from the sale of securities held
less than three months;
. invest in securities within certain statutory limits; and
. distribute to its shareholders at least 90% of its net income earned during
the year.

SHAREHOLDERS' TAX STATUS

Shareholders are subject to federal income tax on dividends and capital gains
received as cash or additional shares.

Dividends paid by the Fund derived from distributions made on equity securities
held by the Fund will be eligible for the dividends received deduction available
to corporations. Any short-term capital gains, however, are taxable as ordinary
income.

CAPITAL GAINS

Shareholders will pay federal tax at capital gains rates on long-term capital
gains distributed to them, regardless of how long they have held the Fund
shares.

TOTAL RETURN

The average annual total return for the Fund is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the offering price per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at
the beginning of the period with $1,000, less any applicable sales charge,
adjusted over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.

YIELD

The yield for the Fund is determined by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the maximum offering price per share of the Fund 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 twelve-month period and
is reinvested every six months. The yield does not necessarily reflect income
actually earned by the Fund 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 the Fund, performance
will be reduced for those shareholders paying those fees.

PERFORMANCE COMPARISONS

The Fund's performance depends upon such variables as:

. portfolio quality;
. average portfolio maturity;
. type of instruments in which the portfolio is invested;
. changes in interest rates and market value of portfolio securities;
. changes in the Fund's expenses; and
. various other factors.

The Fund's performance fluctuates on a daily basis largely because net earnings
and 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 other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may include:
. LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fun categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all capital gains distributions and income dividends and
takes into account any change in offering price over a specific period of
time. From time to time, the Fund will quote its Lipper ranking in the "U.S.
government funds" category in advertising and sales literature.

. THE SALOMON BROTHERS TOTAL RATE-OF-RETURN INDEX for mortgage pass through
securities reflects the entire mortgage pass through market and reflects
their special characteristics. The index represents data aggregated by
mortgage pool and coupon within a given sector. A market weighted portfolio
is constructed considering all newly-created pools and coupons.

. THE MERRILL LYNCH TAXABLE BOND INDICES include U.S. Treasury and agency
issues and were designed to keep pace with structural changes in the fixed
income market. The performance indicators capture all rating changes, new
issues, and any structural changes of the entire market.

. 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.

. LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX is an unmanaged
index comprised of all approximately 5,000 issues which include: non-
convertible bonds publicly issued by the U.S. government or its agencies;
corporate bonds guaranteed by the U.S. government and quasi-federal
corporations; and publicly issued, fixed-rate, non-convertible domestic bonds
of companies in industry, public utilities, and finance with maturities
between 1 and 9.99 years. Total return is based on price
appreciation/depreciation and income as a percentage of the original
investment. Indices are rebalanced monthly by market capitalization.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. These total returns
represent the historic change in the value of an investment in the Fund based on
monthly reinvestment of dividends over a specified period of time.
Advertisements may quote performance information which does not reflect the
effect of the 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, the Fund can compare its performance, or performance for the types of
securities in which it 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 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 ("ICI"). For example, according to the ICI, twenty-
seven percent of American households are pursuing their financial goals through
mutual funds. These investors, as well as businesses and institutions, have
entrusted over $3 trillion to the more than 5,500 funds available.

Cusip 855245809
2040607B (12/96)

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:
(a) Financial Statements
The Following audited financial statements as of October 31, 1996
and the report of Deloitte & Touche LLP dated Decemer 6, 1996, are
hereby incorporated by reference to the Statement of Additional
Information from Form N-30D, the Annual Report of Shareholders, as
filed with the Securities and Exchange Commission on January 3,
1997 with Accession Number0000854850-91-000001
Portfolio of Investments
Statement of Assets & Liabilities
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(b) Exhibits:
(1) Conformed Copy of Declaration of Trust of the Registrant; (8)
(i) Conformed Copy of Amendment No. 1 to Declaration of
Trust; (1)
(ii) Conformed Copy of Amendment No. 2 to the Declaration
of Trust; (2)
(iii) Conformed Copy of Amendment Nos. 3, 4, and 5 to the
Declaration of Trust; (3)
(iv) Conformed Copy of Amendment No. 6 to the Declaration
of Trust; (4)
(v) Conformed Copy of Amendment No. 7 to the Declaration
of Trust; (5)
(vi) Conformed Copy of Amendment Nos. 8 and 9 to the
Declaration of Trust; (8)
(2) Copy of By-Laws of the Registrant; (8)
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of
Beneficial Interest of The Starburst Government
Income Fund; (8)
(ii) Copy of Specimen Certificate for Shares of
Beneficial Interest of The Starburst Government
Money Market Fund-Investment Shares; (8)
(iii) Copy of Specimen Certificate for Shares of
Beneficial Interest of The Starburst Government
Money Market Fund-Trust Shares; (8)
(iv) Copy of Specimen Certificate for Shares of
Beneficial Interest of The Starburst Money Market
Fund-Investment Shares; (8)
(v) Copy of Specimen Certificate for Shares of
Beneficial Interest of The Starburst Money Market
Fund-Trust Shares; (8)
(5) (i) Conformed Copy of the Investment Advisory
Contract of the Registrant through and including
Exhibit D; (8)
(ii) Conformed Copy of Investment Management Contract of
the Registrant through and including Exhibit A; (8)
- --------------------------------------------------------------------------------
1. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 filed on Form N-1A November 16, 1989 (File Nos. 33-30950
and 811-5900).
2. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed May 21, 1990 (File Nos. 33-30950 and
811-5900).
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed September 11, 1991 (File Nos. 33-30950
and 811-5900).
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed February 14, 1992 (File Nos. 33-30950
and 811-5900).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed September 28, 1992 (File Nos. 33-30950
and 811-5900).
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed December 29, 1995 (File Nos. 33-30950
and 811-5900).

(6) Conformed Copy of Distributor's Contract of the Registrant
through and including Exhibit F; (8)
(7) Not applicable;
(8) Conformed Copy of Custodian Agreement of the Registrant; (8)
(9) (i) Conformed Copy of Agreement for Fund Accounting,
Shareholder Recordkeeping, and Custody Services
Procurement; (7)
(ii) Conformed Copy of Sales Agreement with Federated
Securities Corp.; (6)
(iii) Conformed Copy of Electronic Communications and
Recordkeeping Agreement; (6)
(10) Conformed Copy of Opinion and Consent of Counsel as to
legality of shares being registered; (7)
(11) Conformed Copy of Consent of the Independent Auditors; +
(12) Not applicable;
(13) Conformed Copy of Initial Capital Understanding; (1)
(14) Not applicable;
(15) (i) Conformed Copy of Distribution Plan through and
including Exhibit G; (8)
(ii) Form of 12b-1 Agreement; (9)
(16) (i) Copy of Schedule of Computation of Fund Performance
for The Starburst Government Income Fund; (8)
(ii) Copy of Schedule of Computation of Fund Performance
for The Starburst Government Money Market Fund; (8)
(iii) Copy of Schedule of Computation of Fund Performance
for The Starburst Money Market Fund; (8)
(17) Copy of Financial Data Schedules; +
(18) Conformed Copy of Multiple Class Plan of the Registrant; (9)
(19) Conformed Copy of Power of Attorney. (8)
- --------------------------------------------------------------------------------
+ Exhibits have been filed electronically.

1. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 filed on Form N-1A November 16, 1989 (File Nos. 33-30950
and 811-5900).
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed August 3, 1994 (File Nos. 33-30950 and
811-5900).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed December 28, 1994 (File Nos. 33-30950
and 811-5900).
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed December 29, 1995 (File Nos. 33-30950
and 811-5900).
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed December 27, 1996.

Item 25. Persons Controlled by or Under Common Control with Registrant

None

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class as of March 20, 1997

The Starburst Money Market Fund-Institutional Shares..................5
The Starburst Money Market Fund-Institutional Service Shares......1,502
The Starburst Equity-Institutional Shares.............................0
The Starburst Equity Fund-Investment Shares...........................0
The Starburst Bond Fund-Institutional Shares..........................0
The Starburst Bond Fund-Investment Shares.........................2,447

Item 27. Indemnification: (4)

Item 28. Business and Other Connections of Investment Adviser:

For a description of the other business of Compass Bank, the investment adviser,
see the section entitled "Management of the Fund" in Part A.

The Executive Officers of the investment adviser are:
<TABLE>
<CAPTION>
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation, Employment
- ---- ------------- ---------------------
<S> <C> <C>
D. Paul Jones, Jr. Chairman, President, Chairman, Chief Executive Officer,
Chief Executive Officer, Treasurer and Director of Compass
Treasurer and Director Bancshares, Inc.; Director of Golden
Enterprises, Inc. (snack food and metal
fastener production and distribution),
the principal business address of which
is 110 South Sixth Street, Birmingham,
Alabama 35205

E. Lee Harris, Jr. Executive Vice President,
Executive Officer, Human
Resources

Garrett R. Hegel Chief Financial Officer Chief Financial Officer of Compass
Bancshares, Inc.
</TABLE>

- --------------------------------------------------------------------
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed May 23, 1990. (File No. 33-30950)
<TABLE>
<CAPTION>
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation, Employment
- ---- ------------- ---------------------
<S> <C> <C>
Jerry W. Powell General Counsel and General Counsel of Compass Bancshares, Inc.
Secretary

G. Ray Stone Senior Executive Vice
President, Chief Credit
Policy Officer

Byrd Williams Group Executive Vice Executive Vice
President, Chief Retail President of Compass
Banking Executive Bancshares, Inc.

Michael A. Bean Executive Vice President,
Controller

Christina L. Boles Executive Vice President,
Asset and Liability
Management

Eugene C. Boles Executive Vice President,
Loan Administration

Ralph H. Cassell Executive Vice President,
Regional Executive,
Community Banking

D. Stevenson Ferguson, Jr. Executive Vice President,
Asset Management

James G. Heslop Executive Vice President,
Metro Alabama, Retail
Banking

Thomas E. Lazenby Executive Vice President,
Consumer Finance

Robert S. McKean Executive Vice President,
Regional Executive,
Community Banking

John C. Neiman Executive Vice President,
National Industries

Alan M. Ostroff Executive Vice President,
Operations and Technology

Randall Reynolds Executive Vice President,
Retail Investment Sales

Dewey A. White, III Executive Vice President,
Correspondent and
Investment Services

David N. Wright Executive Vice President,
Regional Executive,
Gulf Region
</TABLE>

The business address for each of the above-listed persons is 15 South 20th
Street, Birmingham, Alabama 35233.

The principal business address of Compass Bank, Compass Bancshares, Inc. and
Compass Bancshares Insurance, Inc. is 15 South 20th Street, Birmingham, Alabama
35233.

Directors:
<TABLE>
<CAPTION>
Other Substantial Business,
Name Profession Vocation or Employment
- ---- ---------------------------------
<S> <C>

Charles W. Daniel President, Dantract, Inc. (real estate investments),
Suite 100, 200 Office Park Drive, Birmingham,
Alabama 35223.

William Eugene Davenport President and Chief Operating Officer of Russell
Lands, Inc. (real estate development), 1 Willowpoint
Road, Alexander City, Alabama 35010.

Marshall Durbin, Jr. President of Marshall Durbin & Company, Inc. (poultry
processing), 3125 Independence Drive, Birmingham,
Alabama 35209.

Tranum Fitzpatrick Chairman of Guilford Company, Inc. (real estate
development), President of Guilford Capital (real
estate investment) and President of Empire-Rouse
(real estate development) 2600 East South Boulevard,
Montgomery, Alabama 36116.

George W. Hansberry, M.D. Decatur General Hospital (medical services provider)
P.O. Box 2239, Decatur, Alabama 35609-2239 and
Parkway Medical Center (medical services provider)
P.O. Box 2211, Decatur, Alabama 35609-2211.
</TABLE>

Directors:
<TABLE>
<CAPTION>
Other Substantial Business,
Name Profession Vocation or Employment
- ---- ---------------------------------
<S> <C>

D. Paul Jones, Jr. Chairman, Chief Executive Officer and Treasurer of
Compass Bancshares, Inc. and Compass Bank; President
of Compass Bank; Director of Golden Enterprises,
Inc. (snack food distribution), 110 South Sixth
Street, Birmingham, Alabama 35205.

Goodwin L. Myrick President and Chairman, Alabama Farmers Federation,
ALFA Corporation, ALFA Insurance Companies and ALFA
Services, Inc. (agriculture and insurance), the
principal address of each of which is 2108 East
South Boulevard, Montgomery, Alabama 36116.

John S. Stein President and Chief Executive Officer of Golden
Foods, Inc. (snack food distribution), 110 South
Sixth Street, Birmingham, Alabama 35205.
</TABLE>

All of the members of the Compass Bank Board of Directors are also members of
the Board of Directors of Compass Bancshares, Inc.

Item 29. Principal Underwriters:

(a) Federated Securities Corp., the Distributor for shares of the Registrant,
also acts as principal underwriter for the following open-end investment
companies: 111 Corcoran Funds; Annuity Management Series; Arrow Funds;
Automated Government Money Trust; BayFunds; Blanchard Funds; Blanchard
Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.;
DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income Securities, Inc.;
Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Insurance Series; Federated Investment Portfolios; Federated
Investment Trust; Federated Master Trust; Federated Municipal Opportunities
Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund; Federated U.S. Government Securities
Fund: 1-3 Years; Federated U.S. Government Securities Fund: 2-5 Years;
Federated U.S. Government Securities Fund: 5-10 Years; Federated Utility
Fund, Inc.; First Priority Funds; Fixed Income Securities, Inc.; High Yield
Cash Trust; Independence One Mutual Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO
Monument Funds; SouthTrust Vulcan Funds; Star Funds; Targeted Duration
Trust; Tax-Free Instruments Trust; The Biltmore Funds; The Biltmore
Municipal Funds; The Monitor Funds; The Planters Funds; The Starburst
Funds; The Starburst Funds II; The Virtus Funds; Tower Mutual Funds; Trust
for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
Vision Group of Funds, Inc.; and World Investment Series, Inc.

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

(b)
<TABLE>
<CAPTION>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Thomas R. Donahue Director, Asst. Secretary, --
Federated Investors Tower Asst. Treasurer, Federated
Pittsburgh, PA 15222-3779 Securities Corp.

Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice Trustee, Executive
Federated Investors Tower President, Federated Vice President,
Pittsburgh, PA 15222-3779 Securities Corp. and Treasurer

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.

David M. Taylor Executive Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Dale R. Browne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Stephen A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard Suder Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
</TABLE>

Item 30. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779

Federated Shareholder Services P.O. Box 8600
Company Boston, MA 02266-8600
("Transfer Agent and Dividend
Disbursing Agent")

Federated Administrative Services Federated Investors Tower
("Administrator") Pittsburgh, PA 15222-3779

Compass Bank 701 S. 32nd Street
("Investment Adviser" and Birmingham, AL 35233
"Custodian")

Item 31. Management Services: Not applicable.

Item 32. Undertakings:

Registrant hereby undertakes to comply with the provisions of Section 16(c) of
the 1940 Act with respect to the removal of Trustees and the calling of special
shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.

Registrant hereby undertakes to file a post-effective amendment, including
financial statements which need not be audited, within 4-6 months from the later
of the commencement of operations of The Starburst Equity Fund of the Registrant
or the effective date of Post-Effective Amendment No. 25 to the Registrant's
1933 Act Registration Statement.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, THE STARBURST FUNDS has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the th day of March, 1997.
----

THE STARBURST FUNDS

BY: /s/ C. Grant Anderson
-------------------------------------------
C. Grant Anderson, Assistant Secretary
Attorney in Fact for J. Christopher Donahue
March 26, 1997

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following person in the
capacity and on the date indicated:
<TABLE>
<CAPTION>

NAME TITLE DATE
<S> <C> <C>
By: /s/ C. Grant Anderson
-----------------------------
C. Grant Anderson Attorney In Fact March 26, 1997
ASSISTANT SECRETARY For the Persons
Listed Below
</TABLE>

NAME TITLE
<S> <C>
John F. Donahue* Trustee
J. Christopher Donahue* President
Edward C. Gonzales* Executive Vice President,
Treasurer and Trustee
(Principal Financial
and Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
</TABLE>

* By Power of Attorney

Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg. S-K

INDEPENDENT AUDITORS' CONSENT

To the Board of Trustees and the Shareholders of
The Starburst Bond Fund (formerly, The Starburst Government Income Fund):

We consent to the incorporation by reference in Post-Effective Amendment No. 25
to Registration Statement 33-30950 of The Starburst Bond Fund (formerly, The
Starburst Government Income Fund) of our report dated December 6, 1996 appearing
in the Annual Report, which is incorporated by reference in such Registration
Statement, and to the reference to us under the heading `Financial Highlights''
in such Prospectus.

/s/DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania
March 25, 1997

Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg. S-K

INDEPENDENT AUDITORS' CONSENT

To the Board of Trustees and the Shareholders of
The Starburst Money Market Fund:

We consent to the incorporation by reference in Post-Effective Amendment No. 25
to Registration Statement 33-30950 of The Starburst Money Market Fund of our
report dated December 6, 1996 appearing in the Annual Report, which is
incorporated by reference in such Registration Statement, and to the reference
to us under the heading `Financial Highlights'' in such Prospectus.

/s/DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania
March 25, 1997

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> The Starburst Funds
The Starburst Money Market Fund
Trust Shares
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Oct-31-1996
<PERIOD-END> Oct-31-1996
<INVESTMENTS-AT-COST> 172,919,203
<INVESTMENTS-AT-VALUE> 172,919,203
<RECEIVABLES> 685,078
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 173,604,281
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 884,610
<TOTAL-LIABILITIES> 884,610
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 172,719,671
<SHARES-COMMON-STOCK> 136,666,119
<SHARES-COMMON-PRIOR> 141,434,536
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 136,666,119
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</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> The Starburst Funds
The Starburst Money Market Fund
Investment Shares
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Oct-31-1996
<PERIOD-END> Oct-31-1996
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</TABLE>

<S> <C>

<ARTICLE> 6
<SERIES>
<NUMBER> 04
<NAME> The Starburst Funds
The Starburst Government Income Fund

<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Oct-31-1996
<PERIOD-END> Oct-31-1996
<INVESTMENTS-AT-COST> 45,122,402
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</TABLE>