NEWPOINT FUNDS, N-30D, 1999-01-28

NEWPOINT FUNDS
N-30D, 1999-01-28

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PROSPECTUS

Newpoint Equity Fund

A Portfolio of Newpoint Funds

Mutual fund shares are not bank deposits, federally insured, or guaranteed, and
may lose value.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.

CONTENTS
<S> <C>
Fund Goals, Strategies, and Risks 1
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 2
What are the Fund's Investment Strategies? 3
What are the Principal Securities in which the
Fund Invests? 3
What are the Risks of Investing in the Fund? 3
What do Shares Cost? 4
How is the Fund Sold? 5
How to Purchase Shares 5
How to Redeem Shares 6
Purchases and Redemptions Through Exchanges 8
Account and Share Information 8
Who Manages the Fund? 9
Year 2000 Statement 10
Financial Information 10
Report of Independent Public Accountants 20
JANUARY 31, 1999
</TABLE>

Fund Goals, Strategies, and Risks

WHAT IS THE FUND'S GOAL?
The Fund's goal (objective) is to achieve growth of capital and income.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The domestic equity securities of the Fund will consist primarily of common and
preferred stocks of medium to large capitalization companies which are listed on
the New York or American Stock Exchanges or traded in the over-the-counter
market. The companies will be selected by the Fund's investment adviser,
FirstMerit Bank, N.A. (Adviser) based on traditional research and technical
factors, including assessment of earnings and dividend growth prospects and of
the risk and volatility of the company's industry. Other factors, such as
product position or market share, will also be considered by the Adviser.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

As with all mutual funds, the Fund's investments are subject to risks that could
cause their value to go down.

The value of the stocks in the Fund's portfolio will go up and down, and
therefore the value of your Fund shares will also change. These fluctuations
could be a sustained trend or a drastic movement. The Fund's portfolio will
reflect changes in the prices of individual portfolio stocks or general changes
in stock valuations. Consequently, the Fund's share price could decline and you
could lose money.

An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

Risk/Return Summary

Risk/Return Bar Chart and Table

[GRAPH APPEARS HERE]

The Fund's shares are sold subject to a sales charge which is not reflected in
the bar chart. If the sales charge were reflected, the returns would be less
than those shown.

Within the period shown in the Chart, the Fund's highest quarterly return was
22.68% (quarter ended 12/31/98). Its lowest quarterly return was (10.46%)
(quarter ended 9/30/98).

Average Annual Total Return
The following table represents the Fund's Average Annual Total Return through
12/31/98 after the sales charge.
<TABLE>
<CAPTION>
Calendar Period Fund S&P 500
<S> <C> <C>
1 Year 22.10% 28.58%
Start of Performance1 21.87% 27.84%
</TABLE>
1 The Fund's start of performance date was September 13, 1994.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you
can analyze whether the Fund's investment risks are balanced by its potential
rewards.

The table shows the Fund's total returns averaged over a period of years
relative to the S&P 500, a broad-based market index. The performance of the
S&P 500 has not been adjusted to reflect sales charges, expenses, or other
fees the SEC requires to be reflected in the Fund's performance.

<PAGE>

What are the Fund's Fees and Expenses?

NEWPOINT EQUITY FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Fees
Fees Paid Directly From Your Investment
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)..................................... 4.50%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase............................................... None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions).................................... None
(as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable)....................................................... None
Exchange Fee............................................................................................................. None

Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee/2/........................................................................................................ 0.75%
Distribution (12b-1) Fee/3/.............................................................................................. 0.25%
Shareholder Services Fee/4/.............................................................................................. 0.25%
Other Expenses/5/........................................................................................................ 0.38%
Total Annual Fund Operating Expenses..................................................................................... 1.63%

</TABLE>

1 Although not contractually obligated to do so, the adviser, distributor, and
shareholder services provider will waive certain amounts. These are shown
below along with the net expenses the Fund would actually pay for the fiscal
year ending November 30, 1999.

<TABLE>
<S> <C>
Waiver of Fund Expenses.................................................................................................. 0.55%
Total Actual Annual Fund Operating Expenses (after waivers).............................................................. 1.08%

</TABLE>

2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this voluntary waiver at any time. The management fee
paid by the Fund (after the voluntary waiver) is expected to be 0.70% for the
fiscal year ending November 30, 1999.
3 The Fund did not pay or accrue the distribution (12b-1) fee during the fiscal
year ended November 30, 1998. The Fund has no present intention of paying or
accruing the distribution (12b-1) fee during the fiscal year ending November
30, 1999.
4 The Fund did not pay or accrue the shareholder services fee during the fiscal
year ended November 30, 1998. The Fund has no present intention of paying or
accruing the shareholder services fee during the fiscal year ending November
30, 1999.
5 Other Expenses are based on expenses expected to be incurred for the fiscal
year ending November 30, 1999. Other Expenses were 0.43% for the fiscal year
ended November 30, 1998.

EXAMPLE

The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the Fund's operating
expenses are before waivers as shown in the table and remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
$608 $941 $1,297 $2,296
</TABLE>

What are the Fund's Investment Strategies

The Fund's Adviser selects companies through careful investment analysis
including, but not limited to, the following: the employment of disciplined
value measures (such as price/earnings ratios and price/book ratios); credit
research; review of issuers' dividend growth records; and consideration of
market trends. We are looking for companies that have the following
characteristics: a stable industry structure; an industry position of low cost
provider or differentiation by product or service; proprietary products with
high switching costs; high returns on capital; and management that has an
incentive to increase returns on capital.

TEMPORARY DEFENSIVE INVESTMENTS

The Fund may temporarily depart from its principal investment strategies by
investing its assets in U.S. and foreign short-term money market instruments. It
may do this to minimize potential losses and maintain liquidity to meet
shareholder redemptions during adverse market conditions. This may cause the
Fund to forego greater investment returns for the safety of principal.

What are the Principal Securities in which the Fund Invests?

Under normal circumstances, the Fund pursues its goal by investing at least 65%
of the value of its total assets in equity securities of U.S. companies.

EQUITY SECURITIES

Equity securities represent a share of the issuer's earnings and assets, after
the issuer pays its liabilities. Generally, issuers have discretion as to the
payment of any dividends or distributions. As a result, investors cannot predict
the income they will receive from equity securities. However, equity securities
offer greater potential for appreciation than many other types of securities
because their value increases directly with the value of the issuer's business.
The following describes the types of equity securities in which the Fund
invests.

Common Stocks

Common stocks are the most prevalent type of equity security. They are the
fundamental unit of ownership of a company. Common stockholders receive the
residual value of the issuer's earnings and assets after the issuer pays its
creditors and any preferred stockholders. As a result, changes in an issuer's
earnings directly influence the value of its common stock.

Preferred Stocks

Preferred stocks have the right to receive specified dividends or distributions
before the payment of dividends or distributions on common stock. Some preferred
stocks also participate in dividends and distributions paid on common stock.
Preferred stocks may provide for the issuer to redeem the stock on a specified
date.

What are the Risks of Investing in the Fund?

Stock Market Risks

. The value of equity securities in the Fund's portfolio will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The
Fund's portfolio will reflect changes in prices of individual portfolio
stocks or general changes in stocks valuations. Consequently, the Fund's
share price may decline.

. The Adviser attempts to manage market risk by limiting the amount the Fund
invests in each company's equity securities. However, diversification will
not protect the Fund against widespread or prolonged declines in the stock
market.

Sector Risks

. Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain
sector may underperform other sectors or the market as a whole. As the
Adviser allocates more of the Fund's portfolio holdings to a particular
sector, the Fund's performance will be more susceptible to any economic,
business or other developments which generally affect that sector.

Risks Related to Investing for Growth

. Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on a forecast of lower earnings, a negative
fundamental development, on an adverse market development. Further, growth
stocks may not pay dividends or may pay lower dividends than value stocks.
This means they depend more on price changes for returns and may be more
adversely affected in a down market compared to value stocks that pay higher
dividends.

Risks Related to Investing for Value

. Due to their relatively low valuations, value stocks are typically less
volatile than growth stocks. For instance, the price of a value stock may
experience a smaller increase on a forecast of higher earnings, a positive
fundamental development, or positive market development. Further, value
stocks tend to have higher dividends than growth stocks. This means they
depends less on price changes for returns and may lag behind growth stocks in
an up market.

Risks Related to Company Size

. Generally, the smaller market capitalization of a company, the fewer the
number of shares traded daily, the less liquid its stocks and the more
volatile its price. Market capitalization is determined by multiply the
number of its outstanding shares by the current market price per share.

. Companies with smaller market capitalizations also tend to have unproven
track records, a limited product or service base and limited access to
capital. These factors also increase risks and make these companies more
likely to fail than larger, well capitalized companies.

What do Shares Cost?

You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) and Federal Reserve wire system are open. When the Fund receives your
transaction request in proper form, it is processed at the next determined net
asset value (NAV) plus any applicable sales charge (public offering price).

NAV is determined at the end of regular trading (normally 4:00 p.m. Eastern
time) each day the NYSE and Federal Reserve wire system are open.

Fund shares are sold at NAV plus a sales charge, as follows:

<TABLE>
<CAPTION>
Purchase Amount Sales Charge Sales Charge
as a Percentage as a Percentage
of Public of NAV
Offering Price
<S> <C> <C>
Less than $100,000 4.50% 4.71%
$100,000 but less than 3.75% 3.90%
$250,000
$250,000 but less than 2.50% 2.56%
$500,000
$500,000 but less than 2.00% 2.04%
$750,000
$750,000 but less than 1.00% 1.01%
$1 million
$1 million or greater 0.00% 0.00%
</TABLE>

The minimum initial investment in the Fund is $1,000. Subsequent investments
must be in amounts of at least $100.
Keep in mind that financial intermediaries may charge you fees for their
services in connection with your share transactions.
The sales charge at purchase may be reduced or eliminated by:

. quantity purchases of shares;
. combining concurrent purchases of shares by you, your spouse, and your
children under age 21;
. accumulating purchases (in calculating the sales charge on an additional
purchase, you may count the current value of previous share purchases still
invested in the Fund);
. signing a letter of intent to purchase at least $100,000 of Fund shares
within 13 months (call the Fund for an application and more information); or
. reinvesting redemption proceeds within 60 days.

If your investment qualifies for a reduction or elimination of the sales charge,
you or your investment professional should notify FirstMerit Securities, Inc. or
the Fund's Distributor at the time of purchase. If the Distributor is not
notified, you will receive the reduced sales charge only on additional
purchases, and not retroactively on your previous purchases. More information on
reducing or eliminating the sales charge is in the Fund's Statement of
Additional Information.

How is the Fund Sold?

The Fund's Distributor, Federated Securities Corp., markets the shares described
in this prospectus to institutions and individuals, directly or through
investment professionals. When the Distributor receives sales charges and
marketing fees, it may pay some or all of them to investment professionals. The
Distributor and its affiliates may pay out of their assets other amounts
(including items of material value) to investment professionals for marketing
and servicing shares. The Distributor is a subsidiary of Federated Investors,
Inc. (Federated).

RULE 12B-1 PLAN

The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and financial intermediaries for the sale, distribution and
customer servicing of the Fund's shares. The Fund is not presently paying or
accruing 12b-1 fees.

How to Purchase Shares

THROUGH FIRSTMERIT BANK

Trust customers of FirstMerit Bank placing an order to purchase shares of the
Fund may open an account by calling FirstMerit Bank at 330-384-7300. Information
needed to establish the account will be taken over the telephone by the
FirstMerit trust representative. Fund shares may also be purchased by telephone
by certain trust customers through procedures established with FirstMerit Bank
and its affiliates. Such procedures may include arrangements under which certain
accounts are swept periodically and amounts exceeding an agreed-upon minimum are
invested automatically in the Fund.Purchase orders by trust customers of
FirstMerit Bank must be received by 3:30 p.m. (Eastern time) in order to receive
Fund shares at that day's public offering price.

THROUGH FIRSTMERIT SECURITIES, INC.

Individual investors and customers of FirstMerit Securities, Inc. may purchase
shares by calling FirstMerit Securities, Inc. at 1-800-627-1289 by 3:00 p.m.
(Eastern time) in order to receive Fund shares at that day's public offering
price. An account application may be opened by completing a new account
application form available from FirstMerit Securities. You may also receive an
application by writing to FirstMerit Securities at: P.O. Box 8612, Boston,
Massachusetts 02266-8612. Texas residents should purchase shares of the Fund
through Federated Securities Corp. at 1-800-356-2805. Payment may be made by a
transfer from an Automated Clearing House (ACH) member institution, federal
funds, or by sending a check.

By Automated Clearing House (ACH)

Once you have opened an account, you may purchase additional shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the account application.

By Mail
You may also purchase Fund shares by mailing a check and completed account
application to FirstMerit Securities at P.O. Box 8612, Boston, Massachusetts
02266-8612. Purchases by check are considered received after the payment by
check is converted into federal funds and is received by the Fund. You will
receive Fund shares and dividends on the day the federal funds are received.

Through an Exchange
You may purchase shares through an exchange from Newpoint Government Money
Market Fund. See "Purchases and Redemptions Through Exchanges" below for more
information.

Systematic Investment Program

Shareholders who are individual investors and have opened an account may add to
their investment on regular basis in an minimum amount of $100. Under this
program, funds may be automatically withdrawn periodically from your checking
account or by transfer via ACH and invested in Fund shares. You may apply for
this participation in this program through FirstMerit Securities.

How to Redeem Shares

THROUGH FIRSTMERIT BANK

Trust customers of FirstMerit Bank may redeem Fund shares by telephoning
FirstMerit Bank at 330- 384-7300. You must call by 3:30 p.m. (Eastern time) in
order to receive the redemption amount based on that day's NAV.

THROUGH FIRSTMERIT SECURITIES, INC.

By Phone
Individual investors and customers of FirstMerit Securities may redeem shares by
calling FirstMerit Securities at 1-800-627-1289. You may redeem shares by
telephone once you have completed the appropriate authorization form for
telephone transactions. You must call by 3:00 p.m. (Eastern time) in order to
receive the redemption amount based on that day's NAV.

By Mail
You may redeem shares by sending a written request to FirstMerit Securities.
Call FirstMerit Securities for specific instructions before redeeming by mail.
You will be asked to provide in the request your name, the Fund's name, your
account number, and the share or dollar amount requested. Your redemption
request will be processed on the day your request is received by the Fund in
proper form.

PAYMENT OPTIONS

Your redemption proceeds will typically be mailed by check to your address of
record. However, the following payment options are available if you complete the
appropriate authorization form. These payment options require a signature
guarantee if they were not established when the account was opened:

. an electronic transfer to your depository account at an ACH member
institution ; or
. wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

SYSTEMATIC WITHDRAWAL/EXCHANGE PROGRAM

You may automatically redeem or exchange shares in a minimum amount of $100 on a
regular basis. To participate in this program, you must complete the appropriate
form available from FirstMerit Securities. Your account value must have a value
of at least $10,000 at the time the program is established. This program may
reduce, and eventually deplete, your account, and the payments should not be
considered to be yield or income.

LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. However, payment may be delayed up to seven
days:

. to allow your purchase payment to clear;
. during periods of market volatility; or
. when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

SIGNATURE GUARANTEES
Signatures must be guaranteed if:

. your redemption is to be sent to an address other than the address of
record;
. your redemption is to be sent to an address of record that was changed
within the last thirty days; or
. a redemption is payable to someone other than the shareholder(s) of record.
. your signature can be guaranteed by any federally insured financial
institution (such as a bank or credit union) or a broker/dealer that is a
domestic stock exchange member, but not by a notary public.

REDEMPTION IN KIND

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.

Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Fund will pay all
or a portion of the remainder of the redemption in portfolio instruments, valued
in the same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable.

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.

Purchases and Redemptions Through Exchanges

You may purchase or redeem Fund shares through an exchange with Newpoint
Government Money Market Fund. Trust customers should call FirstMerit Bank and
all other investors should call or write to FirstMerit Securities. You must meet
the minimum initial investment requirement for purchasing shares and both
accounts must have a common owner. Your exchange request must be received by
3:30 p.m. (Eastern time) in order for shares to be exchanged based on that day's
NAV.

In addition, shares of the Fund may also be exchanged for certain other mutual
funds distributed by Federated Securities Corp. that are not advised by
FirstMerit Bank ("Federated Funds"). For further information on the availability
of Federated Funds for exchanges or further information about the exchanges
privilege, call FirstMerit Securities, Inc. at 1-800-627-1289. Both accounts
must have a common owner.

To do this, you must:
. meet any minimum initial investment requirements; and
. receive a prospectus for the fund into which you wish to exchange.

An exchange is treated as a redemption and subsequent purchase, and is a taxable
transaction. You may also be subject to a sales charge by the fund into which
you are exchanging. Signatures must be guaranteed if you request an exchange
into another fund with a different shareholder registration.

The Fund may modify or terminate the exchange privilege at any time. The
Fund's management or Adviser may determine from the amount, frequency and
pattern of exchanges that a shareholder is engaged in excessive trading which is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other funds.

ADDITIONAL CONDITIONS

Telephone Transactions

The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions. The Fund will notify you if it changes
telephone transaction privileges.

Share Certificates
The Fund does not issue share certificates.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases, redemptions and exchanges (except
for systematic transactions). In addition, you will receive periodic statements
reporting all account activity, including systematic transactions, dividends and
capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares and pays any dividends quarterly to shareholders. Dividends
are paid to all shareholders invested in the Fund on the record date.In
addition, the Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
shares without a sales charge, unless you elect cash payments.

If you purchase shares just before the Fund declares a dividend or capital
gain distribution, you will pay the full price for the shares and then receive a
portion of the price back in the form of a distribution, whether or not you
reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.

ACCOUNTS WITH LOW BALANCES

Non-retirement accounts may be closed if redemptions or exchanges cause the
account balance to fall below the minimum initial investment amount. Before an
account is closed, you will be notified and allowed 30 days to purchase
additional shares to meet the minimum.

TAX INFORMATION

The Fund sends you an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.

Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales.
Please consult your tax adviser regarding your federal, state, and local tax
liability.

Who Manages the Fund?

The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, FirstMerit Bank, N.A. The Adviser manages the Fund's assets, including
buying and selling portfolio securities. The Adviser's address is 121 South Main
Street, Akron, Ohio 44308-1440.

ADVISORY FEES

The Adviser receives an annual investment advisory fee equal to a maximum of
0.75% of the Fund's average daily net assets. The investment advisory contract
provides for the voluntary reimbursement of expenses by the Adviser to the
extent any Fund expenses exceed such lower expense limitation as the Adviser
may, by notice to the Fund, voluntarily declare to be effective. The Adviser can
terminate this voluntary reimbursement of expenses at any time at its sole
discretion.

ADVISER'S BACKGROUND

FirstMerit Bank, a national banking association formed in 1947, is a wholly-
owned subsidiary of FirstMerit Corp. (formerly known as "First Bancorporation of
Ohio"). Through its subsidiaries and affiliates, FirstMerit Corp. offers a full
range of financial services to the public, including commercial lending,
depository services, cash management, brokerage services, retail banking, credit
card services, mortgage banking, investment advisory services, and trust
services.

As of December 31, 1998, the Trust Division of FirstMerit Bank had
approximately $4 billion in assets under administration, of which it had
investment discretion over $2.5 billion. FirstMerit Bank has served as the
Fund's investment adviser since the Fund's inception.

As part of its regular banking operations, FirstMerit 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
FirstMerit Bank. The lending relationship will not be a factor in the selection
of securities.

The portfolio manager of the Fund is Wesley C. Meinerding, a Vice President
and Trust Officer with FirstMerit Bank. Mr. Meinerding manages corporate and
personal trust portfolios at FirstMerit Bank. Prior to joining the Adviser in
December 1982, Mr. Meinerding managed trust and bank assets at First National
Bank in Massillon, corporate and personal trusts at Harter Bank and Trust, and
pension assets at Firestone Tire and Rubber Company. Mr. Meinerding has managed
the Fund since the Fund's inception.

Year 2000 Statement

The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999. The Year 2000 problem may cause systems to process information incorrectly
and could disrupt businesses that rely on computers, like the Fund.

While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problems, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.

However, this may be difficult with certain issuers. For example, funds
dealing with foreign service providers or investing in foreign securities, will
have difficulty determining the Year 2000 readiness of those entities. This is
especially true of entities or issuers in emerging markets.

The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.

Financial Information

FINANCIAL HIGHLIGHTS

The following financial highlights are intended to help you understand the
Fund's financial performance since inception. Some of the information is
presented on a per share basis. Total returns represent the rate you would have
earned (or lost) on an investment in the Fund, assuming reinvestment of all
dividends and distributions.

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Report of Independent Public Accountants on page 2
0.
<TABLE>
<CAPTION>
Year Ended November 30 1998 1997 1996 1995 1994/1/
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 17.69 $ 15.14 $ 12.69 $ 9.78 $ 10.00
Income from Investment Operations:
Net investment income 0.01 0.04 0.07 0.10 0.05
Net realized and unrealized gain (loss) on 2.97 3.19 2.61 2.91 (0.23)
investments
TOTAL FROM INVESTMENT OPERATIONS 2.98 3.23 2.68 3.01 (0.18)
Less Distributions:
Distributions from net investment income (0.01) (0.04) (0.07) (0.10) (0.04)
Distributions from net realized gain on (0.95) (0.64) (0.16)
investments
TOTAL DISTRIBUTIONS (0.96) (0.68) (0.23) (0.10) (0.04)
Net Asset Value, End of Period $ 19.71 $ 17.69 $ 15.14 $ 12.69 $ 9.78
Total Return2 18.09% 22.34% 21.38% 30.97% (1.76 %)

Ratios to Average Net Assets:
Expenses 1.03% 1.11% 1.13% 1.48% 1.00 %3
Net investment income 0.08% 0.24% 0.51% 0.88% 2.36 %3
Expense waiver/reimbursement4 0.15% 0.15% 0.37% 0.52% 1.72 %3
Supplemental Data:
Net assets, end of period (000 omitted) $58,321 $48,889 $42,858 $25,803 $11,614
Portfolio turnover 30% 44% 49% 35% 0%
</TABLE>

1 Reflects operations for the period from September 13, 1994 (date of initial
public investment) to November 30, 1994. For the period from August 30, 1994
(start of business) to September 12, 1994, the Fund had no investment
activity.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Portfolio of Investments

NOVEMBER 30, 1998

<TABLE>
<CAPTION>
Shares Value
COMMON STOCKS_95.5%
Basic Industry_2.7%
<C> <S> <C>
35,000 Monsanto Co. $ 1,585,937
Capital Goods_4.1%
26,200 General Electric Co. 2,371,100
Capital Goods Technology_28.0%
13,504 Boeing Co. 548,600
36,600 1Cisco Systems, Inc. 2,758,725
20,000 Compaq Computer Corp. 650,000
22,500 Computer Associates International, Inc. 995,625
10,000 1Dell Computer Corp. 608,125
15,000 Diebold, Inc. 515,625
17,000 Intel Corp. 1,829,625
24,000 Lucent Technologies, Inc. 2,065,500
21,000 1Microsoft Corp. 2,562,000
18,400 Raytheon Co., Class B 1,018,900
30,000 1Sun Microsystems, Inc. 2,221,875
20,000 Telefonaktiebolaget LM Ericsson, Class B, ADR 552,500
TOTAL 16,327,100
Consumer Cyclical_7.3%
26,000 Home Depot, Inc. 1,293,500
10,000 Limited, Inc. 289,375
15,000 Nike, Inc., Class B 600,000
10,000 Sherwin-Williams Co. 283,750
24,000 Wal-Mart Stores, Inc. 1,807,500
TOTAL 4,274,125
Consumer Services_1.8%
12,000 Disney (Walt) Co. 386,250
10,000 McDonald's Corp. 700,625
TOTAL 1,086,875
Consumer Staples_7.4%
16,000 Gillette Co. 735,000
20,000 PepsiCo, Inc. 773,750
20,000 Procter & Gamble Co. $ 1,752,500
20,000 1Safeway, Inc. 1,056,250
TOTAL 4,317,500
Drugs & Healthcare_20.6%
10,000 1Amgen, Inc. 752,500
26,000 1Boston Scientific Corp. 1,287,000
10,000 1Forest Labratories, Inc., Class A 466,250
10,000 Lilly (Eli) & Co. 896,875
22,000 Medtronic, Inc. 1,489,125
20,000 Pfizer, Inc. 2,232,500
31,500 1Thermo Cardiosystems, Inc. 366,188
60,000 Warner-Lambert Co. 4,530,000
TOTAL 12,020,438
Energy_5.3%
16,800 Exxon Corp. 1,261,050
15,000 Halliburton Co. 440,625
15,000 Royal Dutch Petroleum Co., ADR 705,000
15,000 Schlumberger Ltd. 670,313
TOTAL 3,076,988
Finance - Insurance, Banking & Other_14.5%
20,000 Allstate Corp. 815,000
16,875 American International Group, Inc. 1,586,250
14,000 BankAmerica Corp. 912,625
10,000 Chase Manhattan Corp. 634,375
16,000 Citigroup, Inc. 803,000
38,331 Healthcare Realty Trust, Inc. 881,613
20,000 National Golf Properties, Inc. 577,500
15,000 Progressive Corp., OH 2,225,625
TOTAL 8,435,988
Transportation_1.8%
16,000 1 FDX Corp. 1,038,000
Utilities_2.0%
20,000 1 MCI Worldcom, Inc. 1,180,000
TOTAL COMMON STOCKS (IDENTIFIED COST $32,974,518) 55,714,051
MUTUAL FUND SHARES_4.5%
1,667,382 SSGA U.S. Government Money Market Fund, Series A $ 1,667,382
940,280 Seven Seas Money Market Fund 940,280
TOTAL MUTUAL FUND SHARES (AT AMORTIZED COST) 2,607,662
TOTAL INVESTMENTS (IDENTIFIED COST $35,582,180)2 $ 58,321,713
</TABLE>
1 Non-income producing security.
2 The cost of investments for federal tax purposes amounts to $35,582,180. The
net unrealized appreciation of investments on a federal tax basis amounts to
$22,739,53 which is comprised of $23,912,073 appreciation and $1,172,540
depreciation at November 30, 1998.

Note: The categories of investments are shown as a percentage of net assets
($58,320,657) at November 30, 1998.

The following acronym is used throughout this portfolio:

ADR American Depositary Receipt

See Notes which are an integral part of the Financial Statement

Statement of Assets and Liabilities

NOVEMBER 30, 1998

<TABLE>

<S> <C>
Assets:
Total investments in securities, at value (identified and tax cost $35,582,180) $ 58,321,713
Income receivable 49,453
Receivable for shares sold 360
Deferred organizational costs 7,612
TOTAL ASSETS 58,379,138
Liabilities:
Income distribution payable $ 8,595
Payable to Bank 68
Accrued expenses 49,818
TOTAL LIABILITIES 58,481
Net Assets for 2,959,607 shares outstanding 58,320,657
Net Assets Consist of:
Paid in capital $ 33,652,645
Net unrealized appreciation of investments 22,739,533
Accumulated net realized gain on investments 1,916,100
Undistributed net investment income 12,379
TOTAL NET ASSETS $ 58,320,657
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($58,320,657 / 2,959,607 shares outstanding) $19.71
Offering Price Per Share (100/95.50 of $19.71)1 $20.64
</TABLE>

1 See "What Do Shares Cost?" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

YEAR ENDED NOVEMBER 30, 1998

<TABLE>
<S> <C> <C>
Investment Income:
Dividends (net of foreign taxes withheld) $ 482,813
Interest 113,849
Total income 596,662
Expenses:
Investment advisory fee $ 401,923
Administrative personnel and services fee 100,000
Custodian fees 4,148
Transfer and dividend disbursing agent fees and expenses 32,397
Directors'/Trustees' fees 7,488
Auditing fees 12,952
Legal fees 2,002
Portfolio accounting fees 41,267
Share registration costs 13,707
Printing and postage 9,158
Insurance premiums 2,732
Miscellaneous 5,706
TOTAL EXPENSES 633,480
Waiver:
Waiver of investment advisory fee (80,385)
Net expenses 553,095
Net investment income 43,567
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments 1,916,090
Net change in unrealized appreciation of investments 6,992,741
Net realized and unrealized gain on investments 8,908,831
Change in net assets resulting from operations $ 8,952,398
</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Year Ended November 30 1998 1997
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 43,567 $ 108,704
Net realized gain (loss) on investments ($1,916,090 and $2,622,915, respectively, as 1,916,090 2,622,915
computed for federal tax purposes)
Net change in unrealized appreciation 6,992,741 6,465,113
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 8,952,398 9,196,732
Distributions to Shareholders:
Distributions from net investment income (40,878) (104,440)
Distributions from net realized gains (2,622,798) (1,800,823)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (2,663,676) (1,905,263)
Share Transactions:
Proceeds from sale of shares 3,758,666 4,917,490
Net asset value of shares issued to shareholders in payment of distributions declared 2,625,273 1,806,165
Cost of shares redeemed (3,241,375) (7,983,572)
Change in net assets resulting from share transactions 3,142,564 (1,259,917)
Change in net assets 9,431,286 6,031,552
Net Assets:
Beginning of period 48,889,371 42,857,819
End of period (including undistributed net investment income of $12,379 and $9,690, $ 58,320,657 $ 48,889,371
respectively)
</TABLE>
See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

NOVEMBER 30, 1998

ORGANIZATION

Newpoint Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of two portfolios. The financial statements included herein are
only those of Newpoint Equity Fund (the "Fund"), a diversified portfolio. The
financial statements of the other portfolio is presented separately. The assets
of each portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held. The investment objective of the Fund is to
achieve growth of capital and income.

SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.

Investment Valuations

Listed equity securities are valued at the last sale price reported on a
national securities exchange. Short-term securities are valued at the prices
provided by an independent pricing service. However, short-term securities with
remaining maturities of sixty days or less at the time of purchase may be valued
at amortized cost, which approximates fair market value. Investments in other
open-end regulated investment companies are valued at net asset value.

Investment Income, Expenses

and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Dividend income and distributions to shareholders are recorded on
the ex-dividend date.

Federal Taxes

It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provisions for federal tax are
necessary.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.

Other
Investment transactions are accounted for on the trade date.

SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).

Transactions in shares were as follows:
<TABLE>
<CAPTION>
Year Ended November 30 1998 1997
<S> <C> <C>
Shares sold 209,947 315,103
Shares issued to shareholders in payment of distributions declared 163,745 125,636
Shares redeemed (177,349) (509,143)
NET CHANGE RESULTING FROM SHARE TRANSACTIONS 196,343 (68,404)
</TABLE>

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

FirstMerit Bank, the Fund's investment adviser (the "Adviser"), receives for its
services an annual investment advisory fee equal to 0.75% of the Fund's average
daily net assets. The Adviser may voluntarily choose to waive any portion of its
fee. The Adviser can modify or terminate this voluntary waiver at any time at
its sole discretion.

Administrative Fee

Federated Administrative Services ("FAS") provides the Fund with certain
administrative personnel and services. The fee paid to FAS is based on the level
of average aggregate net assets of the Trust for the period.

Transfer and Dividend Disbursing Agent Fees and Expenses

Federated Services Company ("FServ"), through its subsidiary, Federated
Shareholder Services Company ("FSSC"), serves as transfer and dividend
disbursing agent for the Fund. The fee paid to FSSC is based on the size, type,
and number of accounts and transactions made by shareholders.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of- pocket expenses.

Organizational Expenses

Organizational expenses of $35,000 were borne initially by FAS. The Fund has
reimbursed FAS for these expenses. These expenses have been deferred and are
being amortized over the five-year period following the Fund's effective date.

GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.

INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended November 30, 1998, were as follows:
<TABLE>
<S> <C>

Purchases $15,173,159
Sales $16,258,300
</TABLE>

YEAR 2000 (UNAUDITED)

Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.

Report of Independent Public Accountants

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF NEWPOINT FUNDS.

(NEWPOINT GOVERNMENT MONEY MARKET FUND AND NEWPOINT EQUITY FUND):

We have audited the accompanying statement of assets and liabilities of Newpoint
Equity Fund, (an investment portfolio of Newpoint Funds, a Massachusetts
business trust), including the schedule of portfolio investments, as of November
30, 1998, the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the periods then
ended, and the financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. Our procedures included confirmation of securities owned as of
November 30, 1998, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statement and financial highlights referred to
above present fairly, in all material respects, the financial position of
Newpoint Equity Fund, an investment portfolio of Newpoint Funds, as of November
30, 1998, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and its
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.

Boston, Massachusetts
January 15, 1999

[Newpoint Logo]

Newpoint Equity Fund

A Portfolio of Newpoint Funds

JANUARY 31, 1999

A Statement of Additional Information (SAI) dated January 31,1999 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual report to
shareholders. The annual report discusses market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year. To obtain the SAI, annual and semi- annual report, and other
information without charge call FirstMerit Securities, Inc. or the Fund at 1-
800-627-1289.

You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at http://
www.sec.gov. You can call 1-800-SEC-0330 for information on the Public Reference
Room's operations and copying charges.

Newpoint Equity Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400

www.federatedinvestors.com
- --------------------------

Federated Securities., Distributor

Investment Company Act File No. 811-6224

Cusip 651722209

G00580-0X (1/99)

[Recycled Logo]

Newpoint Equity

Management Discussion and Analysis

The stock market ultimately had a very strong year in 1998 despite market
volatility in the third quarter, up 28.59% as measured by the Standard & Poor's
500 Index. This is the fourth year in a row that it has been stronger than
expected. In fact, as noted last year the stock market usually declines after
two years in a row of 20% gains and the chances of a fourth year of oversized
gains was very small. 1998 beat the odds. As we close 1998, we continue to feel
optimistic about the stock market prospects for 1999, but realistically only
expect a normal return of 8 to 9%.

We continue to feel that the three driving forces of our bull market:
globalization of business, the revolution on information technology, and
favorable demographics are still intact and robust. These dominant themes lead
us to overweight technology, drug and healthcare, and financial services. During
1998 we reduced our weighting in capital goods and oil and oil service while
increasing our weight in retail.

We feel the Fund's present focus on the above noted themes should provide the
best chances of capital appreciation in what should be a challenging year for
stocks.

Newpoint Equity Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com

Federated Securities Corp., Distributor [NEWPOINT LOGO]

Newpoint Equity Fund

Growth of $10,000 Invested in Newpoint Equity Fund

The graph below illustrates the hypothetical investment of $10,000 in the
Newpoint Equity Fund (the "Fund") from September 13, 1994 (start of performance)
to November 30, 1998 compared to the Standard & Poor's 500 Index ("S&P 500")+
and the Lipper Growth & Income Fund Average ("LGIFA")++.

[GRAPH APPEARS HERE]

Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.

This report must be preceded or accompanied by the Fund's prospectus dated
January 31, 1999, and, together with financial statements contained therein,
constitutes the Fund's annual report.

* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
=$9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P and the LGIFA have been adjusted to reflect
reinvestment of dividends on securities in the index and average.

** Total return quoted reflects all applicable sales charges.

+ The S&P 500 is not adjusted to reflect sales loads, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. The index is
unmanaged.

++ The Lipper Growth & Income Fund Average is a compilation of a specified
category of mutual fund total returns reported to Lipper Analytical Services,
Inc. Each Fund is reported net of expenses or other fees that the SEC
requires to be reflected in a fund's performance.

[RECYCLED PAPER LOGO]

PROSPECTUS

Newpoint Government
Money Market Fund

A Portfolio of Newpoint Funds

Mutual fund shares are not bank deposits, federally insured, or guaranteed, and
may lose value.

<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Fund Goals, Strategies, and Risks 1
What are the Specific Risks of Investing in the Fund? 1
Risk/Return Summary 2
What are the Fund's Fees and Expenses? 3
What do Shares Cost? 4
How is the Fund Sold? 4
How to Purchase Shares 4
How to Redeem Shares 5
Purchases and Redemptions Through Exchanges 6
Account and Share Information 7
Who Manages the Fund? 8
Year 2000 Statement 8
Financial Information 9
Report of Independent Public Accountants 17
</TABLE>

JANUARY 31, 1999

Fund Goals, Strategies, and Risks

WHAT IS THE FUND'S GOAL?

The Fund is a money market fund which seeks to provide stability of principal
and current income consistent with stability of principal by investing in short-
term U.S. government securities.

WHAT ARE THE FUND'S INVESTMENT STRATEGIES?

The Fund pursues its investment objective by investing in U.S. government
securities with remaining maturities of 13 months or less which are either
issued or guaranteed by the U.S. government, its agencies, or instrumentalities.
In selecting securities for the Fund, the Adviser considers general economic
trends and analyzes overall market conditions. The Adviser considers the current
short-term yield curve along with the spread between government agencies and
Treasuries.

WHAT TYPES OF U.S. GOVERNMENT SECURITIES DOES THE FUND PURCHASE?

U.S. government securities are securities issued by the U.S. government or its
agencies. Treasury securities are direct obligations of the federal government
of the United States. Investors regard Treasury securities as having the lowest
credit risks.

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support though federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Investors regard agency
securities as having low credit risks, but not as low as Treasury securities.

What are the Specific Risks of Investing in the Fund?

Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund. An investment in
the Fund is not a deposit of FirstMerit Bank and is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.

Prices of fixed income securities rise and fall in response to interest rate
changes. Generally, when interest rates rise, prices of fixed-income securities
fall. Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize these
risks by purchasing short-term securities. However, these risks may adversely
affect the Fund's total return or yield.

Risk/Return Summary

Risk/Return Bar Chart and Table

[GRAPH APPEARS HERE]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
yearly basis.

The Fund's shares are not sold subject to a sales charge (load).

Within the period shown in the Chart, the Fund's highest quarterly return was
1.33% (quarter ended 6/30/95). Its lowest quarterly return was 0.60% (quarter
ended 12/31/93).

The Fund's Seven-Day Net Yield as of 12/31/98 was 4.41%.

Average Annual Total Return through 12/31/98.

<TABLE>
<CAPTION>
Calendar Period Fund
<S> <C>
1 Year 4.87%
5 Year 4.67%
Start of Performance1 4.28%
</TABLE>

1 The Fund's performance date was March 11, 1991.

What are the Fund's Fees and Expenses?

NEWPOINT GOVERNMENT MONEY MARKET FUND

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Shareholder Fees
<S> <C>
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
<CAPTION>
Annual Fund Operating Expenses (Before Waivers)/1/
<S> <C>
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee2 0.50%
Distribution (12b-1) Fee None
Shareholder Services Fee None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.80%
</TABLE>

1 Although not contractually obligated to do so, the adviser waived certain
amounts. These are shown below along with the net expenses the Fund actually
paid for the fiscal year ended November 30, 1998.

<TABLE>
<S> <C>
Waiver of Fund Expenses 0.20%
Total Actual Annual Fund Operating Expenses (after waivers) 0.60%
</TABLE>

2 The adviser voluntary waived a portion of the management fee. The adviser can
terminate this voluntary waiver at any time. The management fee paid by the
Fund (after the voluntary waiver) was 0.30% for the fiscal year ended
November 30, 1998.

EXAMPLE

The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses are before waivers as shown

in the table and remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C>
$82 $255 $444 $990
</TABLE>

What do Shares Cost?

The Fund attempts to stabilize the net asset value (NAV) of its shares at
$1.00 per share. The public offering price is the NAV. NAV is determined at
12:00 noon (Eastern time), 3:00 p.m. (Eastern time), and at the end of regular
trading (normally 4:00 p.m. Eastern time) each day the NYSE and Federal Reserve
wire system are open. The Fund, of course, cannot guarantee its NAV will always
remain at $1.00 per share.

The minimum initial investment in the Fund is $1,000. Subsequent investments
must be in amounts of at least $100.

Keep in mind that financial intermediaries may charge you fees for their
services in connection with your share transactions.

How is the Fund Sold?

The Fund's Distributor, Federated Securities Corp., markets the shares described
in this prospectus to institutions and individuals, directly or through
investment professionals. The Distributor and its affiliates may pay out of
their assets other amounts (including items of material value) to investment
professionals for marketing and servicing shares. The Distributor is a
subsidiary of Federated Investors, Inc. (Federated).

How to Purchase Shares

THROUGH FIRSTMERIT BANK

Fund shares may also be purchased by telephone by certain trust customers
through procedures established with FirstMerit and its affiliates. Such
procedures may include arrangements under which certain accounts are swept
periodically and amounts exceeding an agreed-upon minimum are invested
automatically in the Fund.

Purchase orders by trust customers must be received by 9:30 a.m. (Eastern
time) and payment received by 3:00 p.m. (Eastern time) on the same day in order
to receive Fund shares and dividends on that day.

THROUGH FIRSTMERIT SECURITIES, INC.

Individual investors and customers of FirstMerit Securities may purchase shares
by calling FirstMerit Securities, Inc. at 1-800-627-1289. An account application
may be opened by completing a new account application form available from
FirstMerit Securities. You may also receive an application by writing to
FirstMerit Securities at: P.O. Box 8612, Boston, Massachusetts 02266-8612. Texas
residents should purchase shares of the Fund through Federated Securities Corp.
at 1-800-356-2805. Payment may be made by wire, a transfer from an Automated
Clearing House (ACH) member institution, federal funds, or by sending a check.

By Wire

Purchase orders by wire must be received by 9:30 a.m. (Eastern time) and payment
received by 3:00 p.m. (Eastern time) on the same day in order to receive Fund
shares and dividends on that day.

By Automated Clearing House (ACH)

Purchase orders for which payment will be made via ACH must be received by 3:00
p.m. (Eastern time) in order to receive Fund shares and dividends on the next
business day. This purchase option can be established by completing the
appropriate sections of the account application.

By Mail

You may also purchase Fund shares by mailing a check and a completed account
application to FirstMerit Securities at P.O. Box 8612, Boston, Massachusetts
02266-8612. Purchases by check are considered received after the payment by
check is converted into federal funds and is received by the Fund. You will
receive Fund shares and dividends on the day the federal funds are received.

Through an Exchange

You may purchase shares through an exchange from the Newpoint Equity Fund. See
"Exchange Privileges" below for more information.

Systematic Investment Program

Shareholders who are individual investors and have opened an account 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 your checking
account or by transfer via ACH and invested in Fund shares. You may apply for
this participation in this program through FirstMerit Securities.

How to Redeem Shares

THROUGH FIRSTMERIT BANK

Trust customers of FirstMerit Bank may redeem Fund shares by telephoning
FirstMerit Bank at 330-384-7300. If your redemption order is received by 9:30
a.m. (Eastern time) redemption proceeds will be sent to you on the same day. You
will not, however, receive dividends for that day.

THROUGH FIRSTMERIT SECURITIES, INC.

By Phone

Individual investors and customers of FirstMerit Securities may redeem shares by
calling FirstMerit Securities at 1-800-627-1289. You may redeem shares by
telephone once you have completed the appropriate authorization form for
telephone transactions. If you are requesting a redemption via electronic
transfer to your account with an ACH member institution, you must call by 3:00
p.m. (Eastern time) in order to receive the redemption amount based on that
day's NAV.

By Mail

You may redeem shares by sending a written request to FirstMerit Securities.
Call FirstMerit Securities for specific instructions before redeeming by mail.
You will be asked to provide in the request your name, the Fund's name, your
account number, and the share or dollar amount requested. Your redemption
request will be processed on the day your request is received by the Fund in
proper form. Dividends are paid up to and including the day such request is
processed.

CHECKWRITING PRIVILEGES

At your request, the transfer agent will establish a checking account for
redeeming shares. For further information, contact FirstMerit Securities.

With a Fund checking account, shares may be redeemed simply by writing a check
for $50 or more. The redemption will be made at the NAV on the date that the
check is presented to the Fund. A check may not be written to close an account.
If you wish to redeem shares and have the proceeds available, a check may be
written and negotiated through your bank. Checks should never be sent directly
to the transfer agent or State Street Bank and Trust Company to redeem shares.
Canceled checks are sent to you each month upon request.

PAYMENT OPTIONS

. an electronic transfer to your depositary account at an ACH member
institution; or
. wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

SYSTEMATIC WITHDRAWAL/
EXCHANGE PROGRAM

LIMITATIONS OF REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. However, payment may be delayed up to seven
days:

. to allow your purchase payment to clear;
. during periods of market volatility; or
. when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

REDEMPTION IN KIND

Purchases and Redemptions Through Exchanges

You may purchase or redeem Fund shares through an exchange with New point Equity
Fund. Trust customers should call FirstMerit Bank and all investors should call
or write to FirstMerit Securities. You must meet the minimum initial investment
requirement for purchasing shares and both accounts must have a common owner.
Your exchange request must be received by 3:30 p.m. (Eastern time) in order for
shares to be exchanged at that day's NAV.

In addition, shares of the Fund may also be exchanged for certain other funds
distributed by Federated Securities Corp. that are not advised by FirstMerit
Bank (Federated Funds). For further information on the availability of Federated
Funds for exchanges of further information about the exchange privilege, call
FirstMerit Securities, Inc. at 1-800-627-1289. Both accounts must have a common
owner.

To do this, you must:

. meet any minimum initial investment requirements; and
. receive a prospectus for the fund into which you wish to exchange.

An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction. You may also be subject to a sales charge by the fund into
which you are exchanging. Signatures must be guaranteed if you request an
exchange into another fund with a different shareholder registration.

ADDITIONAL CONDITIONS

Telephone Transactions

Share Certificates

The Fund does not issue share certificates.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

DIVIDENDS AND CAPITAL GAINS

The Fund declares any dividends daily and pays them monthly to shareholders. If
your payment for share purchases is received by 3:00 p.m., you will begin to
earn dividends the following day.

In addition, the Fund pays capital gains, if any, at least annually. Your
dividends and capital gains distributions will be automatically reinvested in
additional shares, unless you elect cash payments. Fund distributions are
expected to be primarily dividends.

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Dividends are taxable as ordinary income, capital gains are taxable at different
rates depending upon the length of time the Fund holds its assets.

Fund distributions are expected to be primarily dividends. Redemptions and
exchanges are taxable sales.

Please consult your tax adviser regarding your federal, state, and local tax
liability.

Who Manages the Fund?

ADVISORY FEES

The Adviser receives an annual investment advisory fee equal to 0.50% of the
Fund's average daily net assets. The investment advisory contract provides for
the voluntary reimbursement of expenses by the Adviser to the extent any Fund
expenses exceed such lower expense limitation as the Adviser may, by notice to
the Fund, voluntarily declare to be effective. The Adviser can terminate this
voluntary reimbursement of expenses at any time at its sole discretion.

ADVISER'S BACKGROUND

As of December 31, 1998, the Trust Division of FirstMerit Bank
had approximately $4 billion in assets under administration, of which it had
investment discretion over $2.5 billion. FirstMerit Bank has served as the
Fund's investment adviser since the Fund's inception.

Year 2000 Statement

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.

The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.

Financial Information

FINANCIAL HIGHLIGHTS

This information has been audited by Arthur Andersen LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Report of Independent Auditors on page 17.

<TABLE>
<CAPTION>
Year Ended November 30 1998 1997 1996 1995 1994/1/
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net investment income 0.05 0.05 0.05 0.05 0.03
Less Distributions:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.03)
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return/2/ 4.92% 4.93% 4.83% 5.24% 3.25%

Ratios to Average Net Assets:
Expenses 0.60% 0.60% 0.63% 0.74% 0.77%
Net investment income 4.82% 4.84% 4.73% 5.12% 3.24%
Expense waiver/reimbursement/3/ 0.20% 0.20% 0.20% 0.20% 0.20%
Supplemental Data:
Net assets, end of period (000 omitted) $134,989 $123,165 $85,230 $99,674 $63,868
</TABLE>

1 As of February 4, 1994, Investment Shares were no longer offered and ceased
to exist. Prior to that date, the Fund had offered two classes of shares
known as Trust Shares and Investment Shares.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Portfolio of Investments

NOVEMBER 30, 1998

<TABLE>
<CAPTION>
Principal Value
Amount
<S> <C> <C>
U.S. GOVERNMENT AGENCIES--111.6%
Federal Farm Credit Bank Discount Notes--22.1%
$ 30,000,000 /1/4.89% - 5.37%, 12/1/1998 - 3/29/1999 $ 29,810,217
Federal Farm Credit Bank--29.6%
40,000,000 5.48% - 5.54%, 12/1/1998 - 6/1/1999 40,004,703
Federal Home Loan Bank System Notes--59.9%
81,325,000 /1/4.91% - 5.15%, 12/1/1998 - 4/14/1999 80,890,321
TOTAL U.S. GOVERNMENT AGENCIES 150,705,241
/2/TOTAL INVESTMENTS (AT AMORTIZED COST) $ 150,705,241
</TABLE>

1 Discount rate at time of purchase.
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($134,989,087) at November 30, 1998.
See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

NOVEMBER 30, 1998

<TABLE>
<S> <C> <C>
Assets:
Total investments in securities, at amortized cost and value $ 150,705,241
Cash 7,242
Income receivable 433,235
TOTAL ASSETS 151,145,718
Liabilities:
Payable for investments purchased $ 15,000,000
Payable for shares redeemed 887,643
Income distribution payable 248,857
Accrued expenses 20,131
TOTAL LIABILITIES 16,156,631
Net Assets for 134,989,087 shares outstanding $ 134,989,087
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($134,989,087 / 134,989,087 shares outstanding) $1.00
</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Operations

YEAR ENDED NOVEMBER 30, 1998

<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 6,502,310
Expenses:
Investment advisory fee $ 600,375
Administrative personnel and services fee 180,112
Custodian fees 12,554
Transfer and dividend disbursing agent fees and expenses 72,877
Directors'/Trustees' fees 7,643
Auditing fees 12,764
Legal fees 2,378
Portfolio accounting fees 40,670
Share registration costs 15,595
Printing and postage 9,501
Insurance premiums 2,909
Miscellaneous 6,581
TOTAL EXPENSES 963,959
Waiver:
Waiver of investment advisory fee $ (240,150)
Net expenses 723,809
Net investment income $ 5,778,501
</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

<TABLE>
<CAPTION>
Year Ended November 30 1998 1997
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income $ 5,778,501 $ 4,796,842
Distributions to Shareholders:
Distributions from net investment income (5,778,501) (4,796,842)
Share Transactions:
Proceeds from sale of shares 237,093,604 300,466,050
Net asset value of shares issued to shareholders in payment of distributions 2,832,030 2,098,311
declared
Cost of shares redeemed (228,101,846) (264,629,137)
Change in net assets resulting from share transactions 11,823,788 37,935,224
CHANGE IN NET ASSETS 11,823,788 37,935,224
Net Assets:
Beginning of period 123,165,299 85,230,075
End of period $ 134,989,087 $ 123,165,299
</TABLE>

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

ORGANIZATION

NOVEMBER 30, 1998

Newpoint Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of two portfolios. The financial statements included herein are
only those of Newpoint Government Money Market Fund (the "Fund"). The financial
statements of the other portfolio are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held. The investment objective of the Fund is to
provide stability of principal and current income consistent with stability of
principal.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuations

The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.

Federal Taxes

When-Issued and Delayed Delivery Transactions

Use of Estimates

Other

Investment transactions are accounted for on the trade date.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At
November 30, 1998, capital paid-in aggregated $134,989,087.

Transactions in shares were as follows:

<TABLE>
<CAPTION>
Year Ended November 30 1998 1997
<S> <C> <C>
Shares sold 237,093,604 300,466,050
Shares issued to shareholders in payment of distributions declared 2,832,030 2,098,311
Shares redeemed (228,101,846) (264,629,137)
NET CHANGE RESULTING FROM SHARE TRANSACTIONS 11,823,788 37,935,224
</TABLE>

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

FirstMerit Bank, the Fund's investment adviser (the "Adviser"), receives for its
services an annual investment advisory fee equal to 0.50% of the Fund's average
daily net assets.

The Adviser may voluntary choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.

Administrative Fee

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

Fserv maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.

YEAR 2000 (UNAUDITED)

Report of Independent Public Accountants

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF NEWPOINT FUNDS
(NEWPOINT GOVERNMENT MONEY MARKET FUND AND NEWPOINT EQUITY FUND):

We have audited the accompanying statement of assets and liabilities of Newpoint
Government Money Market Fund, (an investment portfolio of Newpoint Funds, a
Massachusetts business trust), including the schedule of portfolio investments,
as of November 30, 1998, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1998, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Newpoint Government Money Market Fund, an investment portfolio of Newpoint
Funds, as of November 30, 1998, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and its financial highlights for the periods presented, in
conformity with generally accepted accounting principles.

Boston, Massachusetts
January 15, 1999

Newpoint
Government
Money Market
Fund

A Portfolio of Newpoint Funds

JANUARY 31, 1999

A Statement of Additional Information (SAI) dated January 31, 1999 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual report to
shareholders. To obtain the SAI, annual and semi-annual report, and other
information without charge call FirstMerit Securities, Inc. or the Fund at 1-
800-627-1289.

Newpoint Government Money Market Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com

Federated Securities Corp., Distributor

Investment Company Act File No. 811-6224
Cusip 735686107

0121703a (1/99)

APPENDIX A

The graphic presentation displayed here consists of a bar chart
representing the annual total returns of the Newpoint Equity Fund (the "Fund")
as of the calendar year-end for each of four years.

The `y' axis reflects the "Total Return" beginning with 0.00% and
increasing in increments of 5.00% up to 35.00%.

The `x' axis represents calculations for the last four calendar years of
the Fund beginning with the earliest year. The light gray shaded chart features
four distinct vertical bars, each shaded in charcoal, and each visually
representing by height the total return percentages for the calendar year stated
directly at its base. The calculated total return percentages for the Fund,
which appear directly above each respective bar, for the calendar years 1995
through 1998, are 31.76%, 16.66%, 25.10%, and 27.86%, respectively.

The total returns displayed for the Fund do not reflect the payment of any
sales charges or recurring shareholder account fees. If these charges or fees
had been included, the returns shown would have been lower.

The Fund's average annual total return as of the most recent calendar
quarter ended December 31, 1998, after the sales charge, was 22.10%.

Within the period shown in the Chart, the Fund's highest quarterly return
was 22.68% (quarter ended December 31, 1998). Its lowest quarterly return was
- -10.46%% (quarter ended September 30, 1998).

Average Annual Total Return for the Fund Compared to the S&P 500 for the
calendar period ending December 31, 1998.

Calendar Period Fund S&P 500
1 Year 22.10% 28.58%

The bar chart shows the variability of the Fund's actual total return on a
yearly basis. The table shows the Fund's total returns averaged over a period of
one year relative to the S&P 500 Index, a broad-based market index. While past
performance does not necessarily predict future performance, this information
provides you with historical performance information so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.

<PAGE>

APPENDIX B

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Newpoint Government Money Market Fund (the "Fund")
as of the calendar year-end for each of seven years.

The `y' axis reflects the " Total Return" beginning with 0.00% and increasing in
increments of 1.00% up to 6.00%.

The `x' axis represents calculations for the last seven calendar years of the
Fund beginning with the earliest year. The light gray shaded chart features
seven distinct vertical bars, each shaded in charcoal, and each visually
representing by height the total return percentages for the calendar year stated
directly at its base. The calculated total return percentages for the Fund,
which appear directly above each respective bar, for the calendar years 1992
through 1998, are 3.10%, 2.45%, 3.46%, 5.28%, 4.79%, 4.96%, and 4.87%,
respectively.

The Fund's shares are not sold subject to a sales charge (load). Hence the total
returns displayed are based upon the net asset value.

The Fund's average annual total return as of the most recent calendar quarter
ended December 31, 1998, was 4.87%.

Within the period shown in the Chart, the Fund's highest quarterly return was
1.33% (quarter ended June 30, 1995). Its lowest quarterly return was 0.60%
(quarter ended December 21, 1993).

The Fund's 7-Day Net Yield as of 12/31/98 was 4.41%.
The following table represents the Fund's Average Annual Totl Return
through 12/31/98

Calendar Period Fund
1 Year 4.87%
5 Years 4.67%
Start of Performance* 4.28%
*The Fund's start of performance date was March 11, 1991.

Investors may call the Fund to acquire the current 7-Day Net Yield by
calling 1-800-627-1289.

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
rewards.

The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Newpoint
Equity Fund., based on a 4.50% sales load is represented by a solid line. The
Standard & Poor's 500 Index (the "S&P 500") is represented by a dotted line and
the Lipper Growth and Income Funds Average (the "LGIFA") is represented by a
broken line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in Newpoint Equity Fund, the S&P
500 and the LGIFA. The "x" axis reflects computation periods from 9/13/94 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Newpoint Equity
Fund, based on a 4.50% sales load, as compared to the S&P 500 and the LGIFA. The
ending values were $$21,547, $26,754, and $21,548, respectively. The legend in
the bottom quadrant of the graphic presentation indicates the Fund's Average
Annual Total Returns for the one-year period ended 11/30/98 and the Fund's start
of performance (9/13/94) to 11/30/98. The total returns were 12.80% and 19.97%,
respectively.