THE VIRTUS FUNDS
(Investment Shares)
- --------------------------------------------------------------------------------
SUPPLEMENT TO COMBINED PROSPECTUS DATED NOVEMBER 30, 1995
A. Please delete the last sentence of the fourth paragraph on the cover page
of the prospectus and replace with the following:
"You may request a copy of the Combined Statement of Additional Information
or a paper copy of this prospectus, if you have received your prospectus
electronically, free of charge, obtain other information, or make inquiries
about any of the Funds by writing to the Trust or calling toll-free
1-800-723-9512."
B. Please delete the "Summary of Fund Expenses--Investment Shares, Strategic
Stock Shares and Tax-Free Money Market Shares" table on pages 2 and 3 of
the prospectus and replace with the following information:
SUMMARY OF FUND EXPENSES--INVESTMENT SHARES,
STRATEGIC STOCK SHARES AND TAX-FREE MONEY
MARKET SHARES
---------------------------------------------------------------------------
The following Fee Table and Example summarize the various costs and
expenses that a shareholder of Investment Shares, Strategic Stock Shares
and Tax-Free Money Market Shares will bear, either directly or indirectly.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
THE THE THE THE
TAX-FREE THE TREASURY MARYLAND VIRGINIA THE U.S.
MONEY MONEY MONEY MUNICIPAL MUNICIPAL THE GOVERNMENT
MARKET MARKET MARKET BOND BOND STOCK SECURITIES
FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
Contingent Deferred Sales Charge
(as a percentage of amount
redeemed, if applicable) (1)..... None None None 2.00% 2.00% 2.00% 2.00%
<CAPTION>
THE STRATEGIC
STOCK
FUND
<S> <C>
Contingent Deferred Sales Charge
(as a percentage of amount
redeemed, if applicable) (1)..... 2.00%
</TABLE>
ANNUAL INVESTMENT SHARES, STRATEGIC STOCK SHARES, AND TAX-FREE MONEY MARKET
SHARES OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
TOTAL INVESTMENT SHARES,
STRATEGIC STOCK SHARES
AND TAX-FREE MONEY MARKET
SHARE OPERATING EXPENSES
MANAGEMENT OTHER NET OF ANY WAIVERS
FEES (2) 12B-1 FEES (3) EXPENSES (4)(5) OR REIMBURSEMENTS (6)
<S> <C> <C> <C> <C>
The Money Market Fund.................... 0.35% 0.25% 0.22% 0.82%
The Treasury Money Market Fund........... 0.40% 0.25% 0.20% 0.85%
The Tax-Free Money Market Fund........... 0.20% 0.00% 0.39% 0.59%
The Maryland Municipal Bond Fund......... 0.42% 0.25% 0.67% 1.34%
The Virginia Municipal Bond Fund......... 0.65% 0.25% 0.37% 1.27%
The Stock Fund........................... 0.75% 0.25% 0.42% 1.42%
The U.S. Government Securities Fund...... 0.60% 0.25% 0.26% 1.11%
The Strategic Stock Fund................. 1.00% 0.00% 0.44% 1.44%
</TABLE>
(1) A contingent deferred sales charge of 2.00% will be imposed on The
Tax-Free Money Market Fund, The Money Market Fund and The Treasury Money
Market Fund only in limited circumstances in which Shares being redeemed
are acquired in exchange for Investment Shares in those Virtus Funds
which charge a contingent deferred sales charge. The contingent deferred
sales charge is 2.00% of the lesser of the original purchase price or
the net asset value of Shares redeemed within five years of purchase
date.
(2) The management fees have been reduced to reflect the voluntary waiver by
the investment adviser. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee for The
Money Market Fund, The Treasury Money Market Fund, The Tax-Free Money
Market Fund, The Maryland Municipal Bond Fund, The Virginia Municipal
Bond Fund, and The U.S. Government Securities Fund is 0.50%, 0.50%,
0.50%, 0.75%, 0.75%, and 0.75%, respectively.
(3) Fees paid by Investment Shares of each Fund for distribution and/or
administrative services provided with respect to Investment Shares.
Total payments of up to 0.25 of 1% (except the Money Market Fund and The
Treasury Money Market Fund which have total payments of up to 0.35% of
1%) of the average daily net assets attributable to Investment Shares
are permitted under the Distribution Plans. As of the date of this
prospectus, the Money Market Fund is accruing and waiving the 12b-1
fees. As of the date of this prospectus, The Strategic Stock Fund and
The Tax-Free Money Market Fund are not paying or accruing 12b-1 fees.
The Strategic Stock Fund and The Tax-Free Money Market will not accrue
or pay 12b-1 fees until a separate class of shares has been created for
certain institutional investors. The Strategic Stock Fund and The
Tax-Free Money Market Fund can pay up to 0.25% and 0.35% respectively,
as a 12b-1 fee to the distributor. See "Management of the
Trust--Distribution Plans."
(4) Includes administration fees. See "Management of the
Trust--Administration of the Funds."
(5) Total other expenses for the Tax-Free Money Market Fund would have been
0.65% absent the voluntary reimbursement of other operating expenses by
the Adviser. The Adviser can terminate this reimbursement at any time at
its sole discretion.
(6) The total Investment Shares Operating Expenses for The Money Market
Fund, The Treasury Money Market Fund, The Maryland Municipal Bond Fund,
The Virginia Municipal Bond Fund, and The U.S. Government Securities
Fund would have been 1.01%, 0.95%, 1.43%, 1.39%, and 1.29%,
respectively, and the total Operating Expenses for The Tax-Free Money
Market Fund would have been 0.95%, absent the waivers described above in
notes 2, 3 and 5.
EXAMPLE:
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.
<TABLE>
<CAPTION>
1 YEAR 1 YEAR(+) 3 YEARS 3 YEARS+ 5 YEARS
<S> <C> <C> <C> <C> <C>
The Money Market Fund................................ $ 6 $ 6 $ 18 $ 18 $ 32
The Treasury Money Market Fund....................... $ 9 $ 9 $ 27 $ 27 $ 47
The Tax-Free Money Market Fund....................... $ 6 $ 6 $ 19 $ 19 $ 33
The Maryland Municipal Bond Fund..................... $ 34 $ 14 $ 65 $ 42 $ 73
The Virginia Municipal Bond Fund..................... $ 34 $ 13 $ 63 $ 40 $ 70
The Stock Fund....................................... $ 35 $ 14 $ 67 $ 45 $ 78
The U.S. Government Securities Fund.................. $ 32 $ 11 $ 58 $ 35 $ 61
The Strategic Stock Fund............................. $ 35 $ 15 $ 68 $ 46 $ 79
<CAPTION>
10 YEARS
<S> <C>
The Money Market Fund................................ $ 71
The Treasury Money Market Fund....................... $ 104
The Tax-Free Money Market Fund....................... $ 74
The Maryland Municipal Bond Fund..................... $ 161
The Virginia Municipal Bond Fund..................... $ 153
The Stock Fund....................................... $ 170
The U.S. Government Securities Fund.................. $ 135
The Strategic Stock Fund............................. $ 172
</TABLE>
+Reflects expenses on the same investment, assuming no redemption.
The purpose of the foregoing Example is to assist an investor in
understanding the various costs and expenses that a shareholder of
Investment Shares, Strategic Stock Shares and Tax-Free Money Market Shares
will bear, either directly or indirectly. For a more complete description of
the various costs and expenses, see "The Virtus Funds Information" and
"Investing in Shares." Wire-transferred redemptions of less than $5,000 may
be subject to additional fees.
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THIS EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FUNDS' FISCAL YEAR ENDING
SEPTEMBER 30, 1996.
The information set forth in the foregoing table and Example relates only to
Investment Shares of those Funds offering separate classes, The Tax-Free
Money Market Shares, and The Strategic Stock Fund Shares. Trust Shares of
those Funds offering separate classes are subject to certain of the same
expenses as Investment Shares, except they bear no contingent deferred sales
charge or 12b-1 fee. See "Other Classes of shares."
C. Please replace the paragraph entitled "Common Stocks" on page 13 of the
prospectus with the following:
COMMON STOCKS. The Fund will invest in stocks that the Fund's investment
adviser's proprietary investment methodology has identified as having
superior potential for growth of capital and income. At least 65% of the
Fund's portfolio will be invested in common stocks, unless it is in a
defensive position.
The Fund is managed to take advantage of trends in the stock market that
favor different styles of stock selection (value or growth) and different
sizes of companies (consisting of large, medium and small, although the Fund
currently concentrates its investments in stocks of large capitalization
companies). The value style seeks stocks that, in the opinion of the
adviser, are undervalued and are or will be worth more than their current
price. The growth style seeks stocks with higher earnings growth rates
which, in the opinion of the adviser, will lead to appreciation in stock
price.
D. Please replace the first paragraph in the sub-section entitled "Common
Stocks" on page 14 of the prospectus with the following:
COMMON STOCKS. The Fund will invest in stocks that the Fund's investment
adviser's proprietary investment methodology has identified as having
superior appreciation potential. Under normal market conditions, at least
65% of the Fund's portfolio will be invested in common stocks.
E. Please delete the first paragraph on page 32 of the prospectus and insert
the following sub-heading and paragraph before "Systematic Withdrawal
Program:"
CONTINGENT DEFERRED SALES CHARGE--THE TREASURY MONEY MARKET FUND, THE
MONEY MARKET FUND, THE TAX-FREE MONEY MARKET FUND AND BLANCHARD FUNDS
A contingent deferred sales charge will be imposed only in certain instances
in which the Shares of The Treasury Money Market Fund, The Money Market
Fund, The Tax-Free Money Market Fund or a Blanchard Fund being redeemed were
acquired in exchange for Shares of those Virtus Funds which charge a
contingent deferred sales charge ("CDSC Shares"). If Shares of The Treasury
Money Market Fund, The Money Market Fund, The Tax-Free Money Market Fund or
a Blanchard Fund were acquired in exchange for CDSC Shares, redemption of
the Shares of The Treasury Money Market Fund, The Money Market Fund, The
Tax-Free Money Market Fund or a Blanchard Fund within five years of the
purchase of the CDSC Shares, will have the same consequences as described
under "Contingent Deferred Sales Charge--The U.S. Government Securities
Fund, The Stock Fund, The Virginia Municipal Bond Fund, and The Maryland
Municipal Bond Fund."
December 29, 1995
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of Federated Investors
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 927913202 CUSIP 927913848
CUSIP 927913400 CUSIP 927913871
CUSIP 927913509 CUSIP 927913889
CUSIP 927913707 CUSIP 927913806
G00564-16 (12/95)
THE VIRTUS FUNDS
(Trust Shares)
- --------------------------------------------------------------------------------
SUPPLEMENT TO COMBINED PROSPECTUS DATED NOVEMBER 30, 1995
A. Please delete the last sentence of the fourth paragraph on the cover page
of the prospectus and replace with the following:
"You may request a copy of the Combined Statement of Additional Information
or a paper copy of this prospectus, if you have received your prospectus
electronically, free of charge, obtain other information, or make inquiries
about any of the Funds by writing to the Trust or calling toll-free
1-800-723-9512."
B. Please delete the "Summary of Fund Expenses--Trust Shares, Strategic Stock
Shares and Tax-Free Money Market Shares" table on pages 2 and 3 of the
prospectus and replace with the following information:
SUMMARY OF FUND EXPENSES--TRUST SHARES, STRATEGIC
STOCK SHARES AND TAX-FREE MONEY MARKET SHARES
---------------------------------------------------------------------------
The following Fee Table and Example summarize the various costs and
expenses that a shareholder of Trust Shares, Strategic Stock Shares and
Tax-Free Money Market Shares will bear, either directly or indirectly.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
THE THE THE THE
TAX-FREE THE TREASURY MARYLAND VIRGINIA THE U.S.
MONEY MONEY MONEY MUNICIPAL MUNICIPAL THE GOVERNMENT
MARKET MARKET MARKET BOND BOND STOCK SECURITIES
FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
Contingent Deferred Sales Charge
(as a percentage of amount
redeemed, if applicable)........... None None None None None None None
<CAPTION>
THE STRATEGIC
STOCK
FUND
<S> <C>
Contingent Deferred Sales Charge
(as a percentage of amount
redeemed, if applicable)........... 2.00%
</TABLE>
ANNUAL TRUST SHARES, STRATEGIC STOCK SHARES, AND TAX-FREE MONEY MARKET
SHARES OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
TRUST SHARES, TOTAL TRUST SHARES,
STRATEGIC STOCK STRATEGIC STOCK SHARES
SHARES AND AND TAX-FREE MONEY MARKET
TAX-FREE MONEY SHARE OPERATING EXPENSES
MANAGEMENT MARKET SHARES OTHER NET OF ANY WAIVERS
FEES (1) 12B-1 FEES (2) EXPENSES (3)(4) OR REIMBURSEMENTS (5)
<S> <C> <C> <C> <C>
The Money Market Fund.................... 0.35% None 0.22% 0.57%
The Treasury Money Market Fund........... 0.40% None 0.20% 0.60%
The Tax-Free Money Market Fund........... 0.20% 0.00% 0.39% 0.59%
The Maryland Municipal Bond Fund......... 0.42% None 0.67% 1.09%
The Virginia Municipal Bond Fund......... 0.65% None 0.37% 1.02%
The Stock Fund........................... 0.75% None 0.42% 1.17%
The U.S. Government Securities Fund...... 0.60% None 0.26% 0.86%
The Strategic Stock Fund................. 1.00% 0.00% 0.44% 1.44%
</TABLE>
(1) The management fees have been reduced to reflect the voluntary waivers
by the investment adviser. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee
for The Money Market Fund, The Treasury Money Market Fund, The Tax-Free
Money Market Fund, The Maryland Municipal Bond Fund, The Virginia
Municipal Bond Fund, and The U.S. Government Securities Fund is 0.50%,
0.50%, 0.50%, 0.75%, 0.75%, and 0.75%, respectively.
(2) As of the date of this prospectus, The Strategic Stock Fund and The
Tax-Free Money Market Fund are not paying or accruing 12b-1 fees. The
Strategic Stock Fund and The Tax-Free Money Market Fund will not accrue
or pay 12b-1 fees until a separate class of shares has been created for
certain institutional investors. The Strategic Stock Fund and The
Tax-Free Money Market Fund can pay up to 0.25% and 0.35% respectively,
as a 12b-1 fee to the distributor. See "Management of the
Trust--Distribution Plans."
(3) Includes administration fees. See "Management of the
Trust--Administration of the Funds."
(4) Total other expenses for the Tax-Free Money Market Fund, would have been
0.65% absent the voluntary reimbursement of other operating expenses by
the Adviser. The Adviser can terminate this reimbursement at any time at
its sole discretion.
(5) The total Trust Shares Operating Expenses for The Money Market Fund, The
Treasury Money Market Fund, The Maryland Municipal Bond Fund, The
Virginia Municipal Bond Fund, and The U.S. Government Securities Fund
would have been 0.76%, 0.70%, 1.43%, 1.14%, and 1.04%, respectively, and
the total Operating Expenses for The Tax-Free Money Market Fund would
have been 0.95%, absent the waivers described above in notes 1, 2 and 4.
EXAMPLE:
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 Funds
charge no contingent deferred sales charges for Trust Shares or Tax-Free
Money Market Shares.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
The Money Market Fund...................................................... $ 6 $ 18 $ 32 $ 71
The Treasury Money Market Fund............................................. $ 6 $ 19 $ 33 $ 75
The Tax-Free Money Market Fund............................................. $ 6 $ 19 $ 33 $ 74
The Maryland Municipal Bond Fund........................................... $ 11 $ 35 $ 60 $ 133
The Virginia Municipal Bond Fund........................................... $ 10 $ 32 $ 56 $ 125
The Stock Fund............................................................. $ 12 $ 37 $ 64 $ 142
The U.S. Government Securities Fund........................................ $ 9 $ 27 $ 48 $ 106
The Strategic Stock Fund................................................... $ 15 $ 46 $ 79 $ 172
</TABLE>
The purpose of the foregoing Example is to assist an investor in
understanding the various costs and expenses that a shareholder of Trust
Shares, Strategic Stock Shares and Tax-Free Money Market Shares will bear,
either directly or indirectly. For a more complete description of the
various costs and expenses, see "The Virtus Funds Information" and
"Investing in Shares." Wire-transferred redemptions of less than $5,000 may
be subject to additional fees.
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THIS EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FUNDS' FISCAL YEAR ENDING
SEPTEMBER 30, 1996.
The information set forth in the foregoing table and Example relates only to
Trust Shares of those Funds offering separate classes, The Tax-Free Money
Market Shares, and The Strategic Stock Fund Shares. Investment Shares of
those Funds offering separate classes are subject to certain of the same
expenses as Trust Shares with the addition of a maximum contingent deferred
sales charge of 2.00%, and a 12b-1 fee of up to 0.25 of 1% of the Investment
Shares' average daily net assets of The Maryland Municipal Bond Fund, The
Virginia Municipal Bond Fund, The Stock Fund and The U.S. Government
Securities Fund, and of up to 0.35 of 1% of the Investment Shares' average
daily net assets of The Money Market Fund, and The Treasury Money Market
Fund. See "Other Classes of Shares."
C. Please replace the paragraph entitled "Common Stocks" on page 13 of the
prospectus with the following:
COMMON STOCKS. The Fund will invest in stocks that the Fund's investment
adviser's proprietary investment methodology has identified as having
superior potential for growth of capital and income. At least 65% of the
Fund's portfolio will be invested in common stocks, unless it is in a
defensive position.
The Fund is managed to take advantage of trends in the stock market that
favor different styles of stock selection (value or growth) and different
sizes of companies (consisting of large, medium and small, although the Fund
currently concentrates its investments in stocks of large capitalization
companies). The value style seeks stocks that, in the opinion of the
adviser, are undervalued and are or will be worth more than their current
price. The growth style seeks stocks with higher earnings growth rates
which, in the opinion of the adviser, will lead to appreciation in stock
price.
D. Please replace the first paragraph in the sub-section entitled "Common
Stocks" on page 14 of the prospectus with the following:
COMMON STOCKS. The Fund will invest in stocks that the Fund's investment
adviser's proprietary investment methodology has identified as having
superior appreciation potential. Under normal market conditions, at least
65% of the Fund's portfolio will be invested in common stocks.
December 29, 1995
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 927913103 927913855
927913301 927913863
927913830 927913889
927913608 927913806
G00564-14 (12/95)
THE VIRTUS FUNDS
(The Strategic Stock Fund)
- --------------------------------------------------------------------------------
SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 30, 1995
A. Please delete the last sentence of the fourth paragraph on the cover page of
the prospectus and replace with the following:
"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, obtain other information, or make inquiries
about the Fund by writing to the Trust or calling toll-free 1-800-723-9512."
B. Please delete the "Summary of Fund Expenses" table on page 1 of the
prospectus and replace with the following information:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price).............. None
Contingent Deferred Sales Charge (1) (as a percentage of original purchase price or redemption
proceeds, as applicable).......................................................................... 2.00%
Redemption Fee (as a percentage of amount redeemed, if applicable).................................. None
Exchange Fee........................................................................................ None
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of average net assets)
Management Fee...................................................................................... 1.00%
12b-1 Fee (2)....................................................................................... 0.00%
Total Other Expenses................................................................................ 0.44%
Total Fund Operating Expenses.................................................................. 1.44%
</TABLE>
----------------
(1) The Contingent Deferred Sales Charge is 2.00% of the lesser of the
original purchase price or the net asset value of the shares redeemed
within five years of the purchase date. For a more complete description,
see "Redeeming Shares."
(2) As of the date of this prospectus, the Fund is not paying or accruing
12b-1 fees. The Fund will not pay or accrue 12b-1 fees until a separate
class of shares has been created for certain institutional investors.
The Fund can pay up to 0.25% as a 12b-1 fee to the distributor. See "The
Virtus Funds Information."
* Annual Fund Operating Expenses are estimated based on average expenses
expected to be incurred during the fiscal year ending September 30, 1996.
During the course of this period, expenses may be more or less than the
average amount shown.
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 "The Virtus Funds Information" and "Investing in the
Fund."
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 1 YEAR+ 3 YEARS 3 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.............................................................. $35 $15 $68 $46
</TABLE>
+ Reflects expenses on the same investment, assuming no redemption.
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
1996.
C. Please replace the first paragraph in the sub-section entitled "Common
Stocks" on page 3 of the prospectus with the following:
COMMON STOCKS. The Fund will invest in stocks that the Fund's investment
adviser's proprietary investment methodology has identified as having
superior appreciation potential. Under normal market conditions, at least
65% of the Fund's portfolio will be invested in common stocks.
December 29, 1995
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 927913806
