NEWPOINT FUNDS, 485APOS, 1999-11-30

NEWPOINT FUNDS
485APOS, 1999-11-30

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1933 Act File No. 33-37993
1940 Act File No. 811-6224

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

Pre-Effective Amendment No. ______

Post-Effective Amendment No. 17___............................... X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 15___.............................................. X

NEWPOINT FUNDS

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7010

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
_ _ on _______________ pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a) (i)
X on JANUARY 31, 2000 pursuant to paragraph (a) (i)

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

If appropriate, check the following box:

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

Copies To:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky, LLP

2101 L. Street, N.W.
Washington, D.C. 20037

PROSPECTUS

FIRSTMERIT EQUITY FUND

(formerly, Newpoint Equity Fund)
A Portfolio of FirstMerit Funds

(formerly, 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 (SEC) has
not approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

Contents

Fund Goals, Strategies, and Risks 1
Risk/Return Summary 1

What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in which the
Fund Invests? 4
What are the Risks of Investing in the Fund? 4

What do Shares Cost?

How is the Fund Sold? 6
How to Purchase Shares 6
How to Redeem Shares 7
Purchases and Redemptions Through Exchanges 8
Account and Share Information 9
Who Manages the Fund? 10
Year 2000 Statement 10
Financial Information 11

JANUARY 31, 2000

Fund Goals, Strategies,
and Risks

What is the Fund's goal?

The Fund's goal (objective) is to achieve capital appreciation.

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

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

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 5% up to 35%.

The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's start of business through the calendar year
ended December 31, 1998. 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 percentage for the Fund for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1995
through 1998. The percentages noted are: 31.76%, 16.66%, 25.10% and 27.86%,
respectively.

The bar chart shows the variability of the Fund's Shares total returns on a
calendar year-end basis.

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

The Fund's Shares total return for the nine month period from January 1, 1999 to
September 30, 1999 was 9.06%.

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 Shares Average Annual Total
Returns for the calendar periods ended December 31, 1998. The table shows the
Fund's Shares total returns averaged over a period of years relative to the
Standard & Poor's 500 Index (S&P500), a broad based market index and Lipper
Growth & Income Fund Average (LGIFA), an average of funds with similar
investment objectives. Total returns for the indexes shown do not reflect sales
charges, expenses or other fees that the SEC requires to be reflected in the
Fund's performance. Indexes are unmanaged, and it is not possible to invest
directly in an index.

<PAGE>

Calendar Period Fund S&P 500 LGIFA
<S> <C> <C> <C>

1 Year
Start of Performance/1/

</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
returns.

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.

What are the Fund's Fees and Expenses?

FirstMerit 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.

<TABLE>

<S> <C>
Shareholder Fees
Fees Paid Directly From Your Investment
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 0.38%
Total Annual Fund Operating Expenses 1.63%
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 paid for the fiscal
year ended November 30, 1999.
Waiver of Fund Expenses 0.55%
Total Actual Annual Fund Operating Expenses (after waivers) 1.08%
2 The adviser voluntarily 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 0.70% for the fiscal year ended
November 30, 1999.

3 The Fund did not pay or accrue the distribution (12b-1) fee during the fiscal
year ended November 30, 1999. The Fund has no present intention of paying or
accruing the distribution (12b-1) fee during the fiscal year ending November
30, 2000.

4 The Fund did not pay or accrue the shareholder services fee during the fiscal
year ended November 30, 1999. The Fund has no present intention of paying or
accruing the shareholder services fee during the fiscal year ending November
30, 2000.

</TABLE>

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>
$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.

The Adviser looks 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 calculated
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>

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
$250,000 3.75% 3.90%
$250,000 but less than
$500,000 2.50% 2.56%
$500,000 but less than
$750,000 2.00% 2.04%
$750,000 but less than
$1 million 1.00% 1.01%
$1 million 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

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 FirstMerit 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 FirstMerit
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, 1999, the Trust Division of FirstMerit Bank had
approximately $___ billion in assets under administration, of which it had
investment discretion over $___ 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 or experience other date related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses
such as the Fund that rely on computers.

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 for its past five fiscal years. 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.

This information has been audited by Arthur Andersen LLP, whose report,
along with the Fund's financial statements, is contained in this
prospectus. (To be filed by amendment)

<PAGE>

FirstMerit
Equity Fund

(formerly, Newpoint Equity Fund)

A Portfolio of FirstMerit Funds
(formerly, Newpoint Funds)

JANUARY 31, 2000

A Statment of Additional Information (SAI) dated January 31, 2000 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is in the Fund's SAI and Annual and Semi-Annual Reports to
shareholders. To obtain the SAI, Annual Report, Semi-Annual Report and other
information without charge, and make inquiries, call FirstMerit Securities, Inc.

or the Fund at 1-800-627-1289.

You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, D.C. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.

FirstMerit Equity Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7010
1-800-341-7400

Federated Securities Corp., Distributor

Investment Company Act File No. 811-6224
Cusip 651722209

G00580-01 (1/2000)

[RECYCLED LOGO]

STATEMENT OF ADDITIONAL INFORMATION JANUARY 31, 2000

FIRSTMERIT EQUITY FUND
(FORMERLY, NEWPOINT EQUITY FUND)
(A PORTFOLIO OF FIRSTMERIT FUNDS
(FORMERLY NEWPOINT FUNDS))

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for FirstMerit Equity Fund
dated January 31, 2000. Obtain the prospectus without charge by calling
1-800-627-1289.

CONTENTS

How is the Fund Organized? 1
Securities in Which the Fund Invests 1
What do Shares Cost? 11
How is the Fund Sold? 12
How To Buy Shares 12
Massachusetts Partnership Law 13
Account and Share Information 13
Tax Information 13
Who Manages and Provides Services to the Fund? 15
How Does the Fund Measure Performance? 19
Addresses

Federated Securities Corp., Distributor,
subsidiary of Federated Investors

CUSIP 651722209

G00580-02 (1/2000)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of FirstMerit Funds (Trust). The Trust is
an open-end management investment company that was established under the laws of
the Commonwealth of Massachusetts on November 12, 1990. The Trust changed its
name from "Portage Funds" to "Newpoint Funds" on January 31, 1995. The Trust
changed its name from "Newpoint Funds" to FirstMerit Funds on January 31, 2000.
The Trust may offer separate series of shares representing interests in separate
portfolios of securities.

SECURITIES IN WHICH THE FUND INVESTS

Following is a table that indicates which types of securities and investment
techniques are a:

o P = PRINCIPAl investment of the Fund; (shaded in chart)

o A = ACCEPTABLe (but not principal) investment of the Fund

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

- -------------------------------------- -----------
- --------------------------------------- ----------
BANK INSTRUMENTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
BORROWING 1 A

- ---------------------------------------
- --------------------------------------- ----------
COMMON STOCK P

- --------------------------------------- ----------
- --------------------------------------- ----------
CONVERTIBLE SECURITIES A

- --------------------------------------- ----------
- --------------------------------------- ----------
DEBT OBLIGATIONS A

- --------------------------------------- ----------
- --------------------------------------- ----------
DEPOSITARY RECEIPTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
FOREIGN SECURITIES A

- --------------------------------------- ----------
- --------------------------------------- ----------
FUTURES AND OPTIONS TRANSACTIONS A

- --------------------------------------- ----------
- --------------------------------------- ----------
ILLIQUID AND RESTRICTED SECURITIES 2 A

- ---------------------------------------
- --------------------------------------- ----------
LENDING OF PORTFOLIO SECURITIES A

- ---------------------------------------
- --------------------------------------- ----------
PREFERRED STOCKS P

- --------------------------------------- ----------
- ---------------------------------------
PRIME COMMERCIAL PAPER A

- --------------------------------------- ----------
- --------------------------------------- ----------
REPURCHASE AGREEMENTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
REVERSE REPURCHASE AGREEMENTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
SECURITIES OF OTHER INVESTMENT A
COMPANIES

- --------------------------------------- ----------
- --------------------------------------- ----------
U.S. GOVERNMENT SECURITIES A

- --------------------------------------- ----------
- --------------------------------------- ----------
WARRANTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
WHEN-ISSUED AND DELAYED DELIVERY A
TRANSACTIONS

- --------------------------------------- ----------
- --------------------------------------- ----------
ZERO COUPON SECURITIES A

- --------------------------------------- ----------
1. The Fund is required to maintain continuous asset coverage to 300% of the
amount borrowed. If the coverage declines to less than 300%, the Fund must sell
sufficient portfolio securities to restore the coverage even if it must sell the
securities at a loss. 2. The Fund will limit investments in illiquid securities,
including restricted securities not determined by the Trustees to be liquid,
non-negotiable time deposits, over-the-counter options and repurchase agreements
providing for settlement in more than seven days after notice, to 15% of its net
assets.

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS

BORROWING. The Fund may borrow money from banks or through reverse repurchase
agreements in amounts up to one-third of total assets and pledge some assets as
collateral. The Fund will pay interest on borrowed money and may incur other
transaction costs. These expenses could exceed the income received or capital
appreciation realized by the Fund from any securities purchased with borrowed
money. With respect to borrowings, the Fund is required to maintain continuous
asset coverage to 300% of the amount borrowed. If the coverage declines to less
than 300%, the Fund must sell sufficient portfolio securities to restore the
coverage even if it must sell the securities at a loss.

CONVERTIBLE SECURITIES are fixed income securities that the Fund has the option
to exchange for equity securities at a specified CONVERSION PRICE. The option
allows the Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the Fund may hold fixed
income securities convertible into shares of common stock at a conversion price
of $10 per share. If the market value of the shares reached $12, the Fund could
realize an additional $2 per share by converting its fixed income securities.

Convertible securities have lower yields than comparable fixed income securities
to compensate for the value of the conversion option. In addition, the
conversion price exceeds the market value of the underlying equity securities at
the time a convertible security is issued. Thus, convertible securities may
provide lower returns than non-convertible fixed income securities or equity
securities depending upon changes in the price of the underlying equity
securities. However, convertible securities permit the Fund to realize some of
the potential appreciation of the underlying equity securities with less risk of
losing its initial investment.

The Fund treats convertible securities as both fixed income and equity
securities for purposes of its investment policies and limitations, because of
their unique characteristics.

DEBT OBLIGATIONS pay interest, dividends or distributions at a specified rate.
The rate may be fixed or adjusted periodically. The issuer must also repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

A security's YIELD measures the annual income earned on a security as a
percentage of its price. Securities with higher credit risks generally have
higher yields. A security's yield will increase or decrease depending upon
whether it costs less (a "discount") or more (a "premium") than the principal
amount. Under normal market conditions, securities with longer maturities will
also have higher yields. If the issuer may redeem the security before its
scheduled maturity, the price and yield on a discount or premium security may
change based upon the probability of an early redemption.

The following describes the types of fixed income securities in which the Fund
may invest.

AGENCY SECURITIES are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). Some
GSEs are supported by the full, faith and credit of the United States. Other
GSEs receive support through 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 risk, but not as low
as Treasury securities.

BANK INSTRUMENTS are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Instruments denominated in U.S. dollars and issued by
Non-U.S. branches of U.S. or foreign banks are commonly referred to as
EURODOLLAR instruments. Instruments denominated in U.S. dollars and issued by
U.S. branches of foreign banks are referred to as YANKEE instruments.

COMMERCIAL PAPER is an issuer's draft or note with a maturity of less than
nine months. Companies typically issue commercial paper to fund current
expenditures. Most issuers constantly reissue their commercial paper and use
the proceeds (or bank loans) to repay maturing paper. Commercial paper may
default if the issuer cannot continue to obtain liquidity in this fashion.
The short maturity of commercial paper reduces both the market and credit
risk as compared to other debt securities of the same issuer.

CORPORATE DEBT SECURITIES are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types
of corporate debt security. The credit risks of corporate debt securities
vary widely among issuers.

TREASURY SECURITIES are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest credit
risk.

ZERO COUPON SECURITIES do not pay interest or principal until final
maturity. Most debt securities provide periodic payments of interest
(referred to as a "coupon payment"). In contrast, investors buy zero coupon
securities at a price below the amount payable at maturity. The difference
between the price and the amount paid at maturity represents interest on the
zero coupon security. This increases the market and credit risk of a zero
coupon security, because an investor must wait until maturity before
realizing any return on the investment.

There are many forms of zero coupon securities. Some securities are
originally issued at a discount and are referred to as "zero coupon" or
"capital appreciation" bonds. Others are created by separating the right to
receive coupon payments from the principal due at maturity, a process known
as "coupon stripping." Treasury STRIPs, IOs and POs are the most common
forms of "stripped" zero coupon securities. In addition, some securities
give the issuer the option to deliver additional securities in place of cash
interest payments, thereby increasing the amount payable at maturity. These
are referred to as "pay-in-kind" or "PIK" securities.

DEPOSITARY RECEIPTS. American Depositary Receipts (ADRs) are receipts, issued by
a U.S. bank, that represent an interest in shares of a foreign-based
corporation. ADRs provide a way to buy shares of foreign-based companies in the
U.S. rather than in overseas markets. European Depositary Receipts (EDRs) and
Global Depositary Receipts (GDRs) are receipts, issued by foreign banks or trust
companies, or foreign branches of U.S. banks, that represent an interest in
shares of either a foreign or U.S. corporation. Depositary Receipts may not be
denominated in the same currency as the underlying securities into which they
may be converted, and are subject to currency risks. Depositary Receipts involve
many of the same risks of investing directly in foreign securities.

FOREIGN SECURITIES. The international equity securities in which the Fund may
invest include international stocks traded domestically or abroad through
various stock exchanges, ADRs, and International Depositary Receipts ("IDRs").
The international fixed income securities will include ADRs, IDRs, and
government securities of other nations.

Investing in foreign securities carries substantial risks in addition to those
associated with domestic investments. Foreign securities may be denominated in
foreign currencies. Therefore, the value in U.S. dollars of the Fund's assets
and income may be affected by changes in exchange rates and regulations.
Although the Fund values its assets daily in U.S. dollars, it will not convert
its holding of foreign currencies to U.S. dollars daily. When the Fund converts
its holdings to another currency, it may incur currency conversion costs.
Foreign exchange dealers realize a profit on the difference between the prices
at which they buy and sell currencies.

Other differences between investing in foreign and U.S. companies include:

o less publicly available information about foreign companies;

o the lack of uniform financial accounting standards applicable to foreign
companies;

o less readily available market quotations on foreign companies;

o differences in government regulation and supervision of foreign stock
exchanges, brokers, listed companies, and banks;

o generally lower foreign stock market volume;

o the likelihood that foreign securities may be less liquid or more volatile;

o generally higher foreign brokerage commissions;

o possible difficulty in enforcing contractual obligations or obtaining court
judgments abroad because of differences in the legal systems;

o unreliable mail service between countries; and

o political or financial changes which adversely affect investments in some
countries.

FUTURES AND OPTIONS TRANSACTIONS. As a means of reducing fluctuations in its net
asset value, the Fund may, but is not required to, buy and sell futures
contracts and options on futures contracts, and buy put and call options on
portfolio securities and securities indices to hedge its portfolio. The Fund may
also, but is not required to, write covered put and call options on portfolio
securities to attempt to increase its current income or to hedge its portfolio.
There is no assurance that a liquid secondary market will exist for any
particular futures contract or option at any particular time. The Fund's ability
to establish and close out futures and options positions depends on this
secondary market.

FUTURES CONTRACTS. A futures contract is a commitment by two parties under
which one party agrees to make delivery of an asset (seller) and another
party agrees to take delivery of the asset at a certain time in the
future. A futures contract may involve a variety of assets including
commodities (such as oil, wheat, or corn) or a financial asset (such as a
security). The Fund may purchase and sell financial futures contracts to
hedge against anticipated changes in the value of its portfolio without
necessarily buying or selling the securities. Although some financial
futures contracts call for making or taking delivery of the underlying
securities, in most cases these obligations are closed out before the
settlement date. The closing of a futures contract is accomplished by
purchasing or selling an identical offsetting futures contract. Other
financial futures contracts call for cash settlements.

The Fund may purchase and sell stock index futures contracts to hedge
against anticipated price changes with respect to any stock index traded
on a recognized stock exchange or board of trade. A stock index futures
contract is an agreement in which two parties agree to take or make
delivery of an amount of cash equal to the difference between the price of
the original contract and the value of the index at the close of the last
trading day of the contract. No physical delivery of the underlying
securities in the index is made. Settlement is made in cash upon
termination of the contract.

MARGIN IN FUTURES TRANSACTIONS. Since the Fund does not pay or receive
money upon the purchase or sale of a futures contract, it is required to
deposit an amount of initial margin in cash, U.S. government securities or
highly-liquid debt securities as a good faith deposit. The margin is
returned to the Fund upon termination of the contract. Initial margin in
futures transactions does not involve borrowing to finance the
transactions.

As the value of the underlying futures contract changes daily, the Fund
pays or receives cash, called variation margin, equal to the daily change
in value of the futures contract. This process is known as marking to
market. Variation margin does not represent a borrowing or loan by the
Fund. It may be viewed as settlement between the Fund and the broker of
the amount one would owe the other if the futures contract expired. When
the Fund purchases futures contracts, an amount of cash and/or cash
equivalents, equal to the underlying commodity value of the futures
contracts (less any related margin deposits), will be deposited in a
segregated account with the Fund's custodian to collateralize the position
and insure that the use of futures contracts is unleveraged. The Fund is
also required to deposit and maintain margin when it writes call options
on futures contracts. The Fund will not enter into a futures contract or
purchase an option thereon for other than hedging purposes if immediately
thereafter the initial margin deposits for futures contracts held by it,
plus premiums paid by it for open options on futures contracts, would
exceed 5% of the market value of its net assets, after taking into account
the unrealized profits and losses on those contracts it has entered into.
However, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in computing such 5%.

PUT OPTIONS ON FINANCIAL FUTURES CONTRACTS. The Fund may purchase listed
put options on financial futures contracts to protect portfolio securities
against decreases in value. Unlike entering directly into a futures
contract, which requires the purchaser to buy a financial instrument on a
set date at a specified price, the purchase of a put option on a futures
contract entitles (but does not obligate) its purchaser to decide on or
before a future date whether to assume a short position at the specified
price.

Generally, if the hedged portfolio securities decrease in value during the
term of an option, the related futures contracts will also decrease in
value and the option will increase in value. In such an event, the Fund
will normally close out its option by selling an identical option. If the
hedge is successful, the proceeds received by the Fund upon the sale of
the second option will be large enough to offset both the premium paid by
the Fund for the original option plus the decrease in value of the hedged
securities.

Alternatively, the Fund may exercise its put option to close out the
position. To do so, it would simultaneously enter into a futures contract
of the type underlying the option (for a price less than the strike price
of the option) and exercise the option. The Fund would then deliver the
futures contract in return for payment of the strike price. If the Fund
neither closes out nor exercises an option, the option will expire on the
date provided in the option contract, and only the premium paid for the
contract will be lost.

The Fund may also write (sell) listed put options on financial futures
contracts to hedge its portfolio against a decrease in market interest
rates or an increase in stock prices. The Fund will use these transactions
to purchase portfolio securities in the future at price levels existing at
the time it enters into the transaction. When the Fund sells a put on a
futures contract, it receives a cash premium in exchange for granting to
the buyer of the put the right to receive from the Fund, at the strike
price, a short position in such futures contract. This is so even though
the strike price upon exercise of the option is greater than the value of
the futures position received by such holder. As market interest rates
decrease or stock prices increase, the market price of the underlying
futures contract normally increases. When the underlying futures contract
increases, the buyer of the put option has less reason to exercise the put
because the buyer can sell the same futures contract at a higher price in
the market. If the value of the underlying futures position is not such
that exercise of the option would be profitable to the option holder, the
option will generally expire without being exercised. The premium received
by the Fund can then be used to offset the higher prices of portfolio
securities to be purchased in the future.

In order to avoid the exercise of an option sold by it, generally the Fund
will cancel its obligation under the option by entering into a closing
purchase transaction, unless it is determined to be in the Fund's interest
to deliver the underlying futures position. A closing purchase transaction
consists of the purchase by the Fund of an option having the same term as
the option sold by the Fund, and has the effect of canceling the Fund's
position as a seller. The premium which the Fund will pay in executing a
closing purchase transaction may be higher than the premium received when
the option was sold, depending in large part upon the relative price of
the underlying futures position at the time of each transaction. If the
hedge is successful, the cost of buying the second option will be less
than the premium received by the Fund for the initial option.

CALL OPTIONS ON FINANCIAL FUTURES CONTRACTS. The Fund may write (sell)
listed and over-the-counter call options on financial futures contracts to
hedge its portfolio. When the Fund writes a call option on a futures
contract, it undertakes to sell a futures contract at the fixed price at
any time during the life of the option. As stock prices fall or market
interest rates rise, causing the prices of futures to go down, the Fund's
obligation to sell a futures contract costs less to fulfill, causing the
value of the Fund's call option position to increase. In other words, as
the underlying futures price goes down below the strike price, the buyer
of the option has no reason to exercise the call, so that the Fund keeps
the premium received for the option. This premium can substantially offset
the drop in value of the Fund's portfolio securities.

Prior to the expiration of a call written by the Fund, or exercise of it
by the buyer, the Fund may close out the option by buying an identical
option. If the hedge is successful, the cost of the second option will be
less than the premium received by the Fund for the initial option. The net
premium income of the Fund will then substantially offset the decrease in
value of the hedged securities.

The Fund may buy a listed call option on a financial futures contract to
hedge against decreases in market interest rates or increases in stock
price. The Fund will use these transactions to purchase portfolio
securities in the future at price levels existing at the time it enters
into the transaction. When the Fund purchases a call on a financial
futures contract, it receives in exchange for the payment of a cash
premium the right, but not the obligation, to enter into the underlying
futures contract at a strike price determined at the time the call was
purchased, regardless of the comparative market value of such futures
position at the time the option is exercised. The holder of a call option
has the right to receive a long (or buyer's) position in the underlying
futures contract. As market interest rates fall or stock prices increase,
the value of the underlying futures contract will normally increase,
resulting in an increase in value of the Fund's option position. When the
market price of the underlying futures contract increases above the strike
price plus premium paid, the Fund could exercise its option and buy the
futures contract below market price. Prior to the exercise or expiration
of the call option, the Fund could sell an identical call option and close
out its position. If the premium received upon selling the offsetting call
is greater than the premium originally paid, the Fund has completed a
successful hedge.

LIMITATION ON OPEN FUTURES POSITIONS. The Fund will not maintain open
positions in futures contracts it has sold or call options it has written
on futures contracts if together the value of the open positions exceeds
the current market value of the Fund's portfolio plus or minus the
unrealized gain or loss on those open positions, adjusted for the
correlation of volatility between the hedged securities and the futures
contracts. If this limitation is exceeded at any time, the Fund will take
prompt action to close out a sufficient number of open contracts to bring
its open futures and options positions within this limitation.

PURCHASING PUT AND CALL OPTIONS ON SECURITIES. The Fund may purchase put
options on portfolio securities to protect against price movements in the
Fund's portfolio. A put option gives the Fund, in return for a premium,
the right to sell the underlying security to the writer (seller) at a
specified price during the term of the option. The Fund may purchase call
options on securities acceptable for purchase to protect against price
movements by locking in on a purchase price for the underlying security. A
call option gives the Fund, in return for a premium, the right to buy the
underlying security from the seller at a specified price during the term
of the option.

WRITING COVERED CALL AND PUT OPTIONS ON SECURITIES. The Fund may write
covered call and put options to generate income and thereby protect
against price movements in the Fund's portfolio securities. As writer of a
call option, the Fund has the obligation, upon exercise of the option
during the option period, to deliver the underlying security upon payment
of the exercise price. The Fund may only sell call options either on
securities held in its portfolio or on securities which it has the right
to obtain without payment of further consideration (or has segregated cash
or U.S. government securities in the amount of any additional
consideration). As a writer of a put option, the Fund has the obligation
to purchase a security from the purchaser of the option upon the exercise
of the option. In the case of put options, the Fund will segregate cash or
U.S. Treasury obligations with a value equal to or greater than the
exercise price of the underlying securities.

STOCK INDEX OPTIONS. The Fund may purchase or sell put or call options on
stock indices listed on national securities exchanges or traded in the
over-the-counter market. A stock index fluctuates with changes in the
market values of the stocks included in the index. Upon the exercise of
the option, the holder of a call option has the right to receive, and the
writer of a put option has the obligation to deliver, a cash payment equal
to the difference between the closing price of the index and the exercise
price of the option. The effectiveness of purchasing stock index options
will depend upon the extent to which price movements in the Fund's
portfolio correlate with price movements of the stock index selected. The
value of an index option depends upon movements in the level of the index
rather than the price of a particular stock. Accordingly, successful use
by the Fund of options on stock indices will be subject to the Adviser
correctly predicting movements in the directions of the stock market
generally or of a particular industry. This requires different skills and
techniques than predicting changes in the price of individual stocks.

OVER-THE-COUNTER OPTIONS. Over-the-counter options are two-party contracts
with price and terms negotiated between buyer and seller. In contrast,
exchange-traded options are third-party contracts with standardized strike
prices and expiration dates and are purchased from a clearing corporation.
Exchange-traded options have a continuous liquid market while
over-the-counter options may not. The Fund may generally purchase and
write over-the-counter options on portfolio securities or securities
indices in negotiated transactions with the buyers or writers of the
options when options on the Fund's portfolio securities or securities
indices are not traded on an exchange. The Fund purchases and writes
options only with investment dealers and other financial institutions
deemed creditworthy by Adviser.

RISKS. If the Fund uses futures and options on futures as hedging devices,
there is a risk that the prices of the securities subject to the futures
contracts may not correlate perfectly with the prices of the securities or
currency in the Fund's portfolio. This may cause the futures contract and
any related options to react differently to market changes than the
portfolio securities. In addition, the Adviser could be incorrect in its
expectations about the direction or extent of market factors such as stock
price movements. In these events, the Fund could lose money on the futures
contract or option.

If a Fund purchases futures contracts, an amount of cash and cash equivalents,
equal to the underlying commodity value of the futures contracts (less any
related margin deposits), will be deposited in a segregated account with the
Fund's custodian or the broker, to collateralize the position and thereby insure
that the use of such futures contract is unleveraged. When the Fund sells
futures contracts, it will either own or have the right to receive the
underlying future or security, or will make deposits to collateralize the
position as discussed above.

ILLIQUID AND RESTRICTED SECURITIES. Illiquid securities are those that cannot
readily be sold within seven days. Restricted securities are securities that
have restrictions with respect to their resale. Generally, the restrictions are
on whom or to what type of entity they can be sold. Often, issuers of securities
may not want to register them with the SEC, so they will sell them to a specific
class of investors under Rule 144A or Regulation D of the Securities Act of
1933. Purchasers of these "private placements" must be institutional investors
(mutual funds, insurance companies, etc.), and there may be minimum purchase
amounts. The reason 144A securities may be "illiquid" is that a fund that
purchases them cannot just sell them on the open market - they must find another
qualified institutional buyer to purchase the security under Rule 144A.

However, not all restricted securities are "illiquid". The SEC permits a fund's
board to make a determination that certain 144A securities or Section 4(2) paper
issues are liquid. Conversely, not all illiquid securities are restricted.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. In conjunction with the
Fund's ability to invest in the securities of other investment companies, the
Fund may invest in the securities of affiliated money market funds as an
efficient means of managing the Fund's uninvested cash.

LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend portfolio securities. When the Fund lends portfolio securities, it
will receive either cash or liquid securities as collateral from the borrower.
The Fund will reinvest cash collateral in short-term liquid securities that
qualify as an otherwise acceptable investment for the Fund. If the market value
of the loaned securities increases, the borrower must furnish additional
collateral to the Fund. During the time portfolio securities are on loan, the
borrower pays the Fund any dividends or interest paid on such securities. Loans
are subject to termination at the option of the Fund or the borrower. The Fund
may pay reasonable administrative and custodial fees in connection with a loan
and may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to a securities lending agent or broker. When the Fund
lends its portfolio securities, it may not be able to get them back from the
borrower on a timely basis. If this occurs, the Fund may lose certain investment
opportunities.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. The Fund's custodian is
required to take possession of the securities subject to repurchase agreements.
These securities are marked to market daily. To the extent that the original
seller defaults and does not repurchase the securities from the Fund, the Fund
could receive less than the repurchase price on any sale of such securities. In
the event that such a defaulting seller files for bankruptcy or becomes
insolvent, disposition of such securities by the Fund might be delayed pending
court action. The Fund believes that, under the procedures normally in effect
for custody of the portfolio securities subject to repurchase agreements, a
court of competent jurisdiction would rule in favor of the Fund and allow
retention or disposition of such securities. The Fund will only enter into
repurchase agreements with banks and other recognized financial institutions,
such as broker/dealers, which are deemed by the Adviser to be creditworthy.

Reverse repurchase agreement transactions are similar to borrowing cash. In a
reverse repurchase agreement, the Fund sells a portfolio security to another
person, such as a financial institution, broker, or dealer, in return for a
percentage of the instrument's market value in cash, and agrees that on a
stipulated date in the future the Fund will repurchase the portfolio at a price
equal to the original sale price plus interest. The Fund may use reverse
repurchase agreements for liquidity and may enable the Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous.
When effecting reverse repurchase agreements, liquid assets of the Fund, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market daily
and maintained until the transaction is settled.

TEMPORARY INVESTMENTS. There may be times when market conditions warrant a
defensive position. During these market conditions the Fund may temporarily
invest without limit in short-term debt obligations (money market instruments).
These investments include commercial paper, bank instruments, U.S. government
obligations, repurchase agreements, and securities of other investment
companies. The Fund's temporary investments must be of comparable quality to its
primary investments.

WARRANTS give the Fund the option to buy the issuer's stock or other equity
securities at a specified price. The Fund may buy the designated shares by
paying the exercise price before the warrant expires. Warrants may become
worthless if the price of the stock does not rise above the exercise price by
the expiration date. Rights are the same as warrants, except they are typically
issued to existing stockholders.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. These transactions are made to
secure what is considered to be an advantageous price or yield. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices. Other than
normal transaction costs, no fees or expenses are incurred. However, liquid
assets of the Fund are segregated on the Fund's records at the trade date in an
amount sufficient to make payment for the securities to be purchased. These
assets are marked to market daily and are maintained until the transaction has
been settled.

INVESTMENT LIMITATIONS

DIVERSIFICATION OF INVESTMENTS. With respect to securities comprising 75% of the
value of its total assets, the Fund will not purchase securities of any one
issuer (other than cash; cash items; securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities and
repurchase agreements collateralized by such U.S. government securities; and
securities of other investment companies) if, as a result, more than 5% of the
value of its total assets would be invested in securities of that issuer, or the
Fund would own more than 10% of the outstanding voting securities of that
issuer.

BORROWING MONEY AND ISSUING SENIOR SECURITIES . The Fund may borrow money,
directly or indirectly, and issue senior securities to the maximum extent
permitted under the 1940 Act.

INVESTING IN REAL ESTATE. The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner.

INVESTING IN COMMODITIES. The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities.

As a matter of non-fundamental operating policy, for purposes of the commodities
policy, investments in transactions involving futures contracts and options,
forward currency contracts, swap transactions and other financial contracts that
settle by payment of cash are not deemed to be investments in commodities.
UNDERWRITING. The Fund may not underwrite the securities of other issuers,
except that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances where it
may be considered to be an underwriter under the Securities Act of 1933.

LENDING CASH OR SECURITIES. The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests.

CONCENTRATION OF INVESTMENTS. The Fund will not make investments that will
result in the concentration of its investments in the securities of issuers
primarily engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an industry.

In applying the concentration restriction: (1) utility companies will be divided
according to their services, for example, gas, gas transmission, electric and
telephone will each be considered a separate industry; (2) financial service
companies will be classified according to the end users of their services, for
example, automobile finance, bank finance and diversified finance will each be
considered a separate industry; and (3) asset-backed securities will be
classified according to the underlying assets securing such securities.

To conform to the current view of the SEC staff that only domestic bank
instruments may be excluded from industry concentration limitations, as a matter
of non-fundamental policy, the Fund will not exclude foreign bank instruments
from industry concentration limitation tests as long as the policy of the SEC
remains in effect. In addition, investments in bank instruments, and investments
in certain industrial development bonds funded by activities in a single
industry, will be deemed to constitute investment in an industry, except when
held for temporary defensive purposes. The investment of more than 25% of the
value of the Fund's total assets in any one industry will constitute
`concentration.

THE ABOVE LIMITATIONS CANNOT BE CHANGED BY THE BOARD OF TRUSTEES (BOARD) UNLESS
AUTHORIZED BY THE BY THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING
SECURITIES," AS DEFINED BY THE INVESTMENT COMPANY ACT. THE FOLLOWING
LIMITATIONS, HOWEVER, MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL.
SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS
BECOMES EFFECTIVE.

BUYING ON MARGIN. The Fund will not purchase securities on margin, provided that
the Fund may obtain short-term credits necessary for the clearance of purchases
and sales of securities, and further provided that the Fund may make margin
deposits in connection with its use of financial options and futures, forward
and spot currency contracts, swap transactions, and other financial contracts or
derivative instruments.

PLEDGING ASSETS. The Fund will not mortgage, pledge, or hypothecate any of its
assets, provided that this shall not apply to the transfer of securities in
connection with any permissible borrowing or to collateral arrangements in
connection with permissible activities.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest its
assets in securities of other investment companies, including the securities of
affiliated money market funds, as an efficient means of carrying out its
investment policies and managing its uninvested cash.

INVESTING IN ILLIQUID SECURITIES. The Fund will not purchase securities for
which there is no readily available market, or enter into repurchase agreements
or purchase time deposits maturing in more than seven days, if immediately after
and as a result, the value of such securities would exceed, in the aggregate,
15% of the Fund's net assets.

Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction. For purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S. branch of
a domestic bank or savings association having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash items."

DETERMINING MARKET VALUE OF SECURITIES

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

o for equity securities, according to the last sale price in the market in which
they are primarily traded (either a national securities exchange or the
over-the-counter market), if available;

o in the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;

o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;

o for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as determined
in good faith by the Trustees; and

o for all other securities, at fair value as determined in good faith by
the Trustees.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities.

The Fund values futures contracts and options at their market values established
by the exchanges on which they are traded at the close of trading on such
exchanges. Options traded in the over-the-counter market are valued according to
the mean between the last bid and the last asked price for the option as
provided by an investment dealer or other financial institution that deals in
the option. The Trustees may determine in good faith that another method of
valuing such investments is necessary to appraise their fair market value.

TRADING IN FOREIGN SECURITIES. Trading in foreign securities may be completed at
times which vary from the closing of the New York Stock Exchange (NYSE). In
computing its net asset value (NAV), the Fund values foreign securities at the
latest closing price on the exchange on which they are traded immediately prior
to the closing of the NYSE. Certain foreign currency exchange rates may also be
determined at the latest rate prior to the closing of the NYSE. Foreign
securities quoted in foreign currencies are translated into U.S. dollars at
current rates. Occasionally, events that affect these values and exchange rates
may occur between the times at which they are determined and the closing of the
NYSE. If such events materially affect the value of portfolio securities, these
securities may be valued at their fair value as determined in good faith by the
Fund's Board, although the actual calculation may be done by others.

WHAT DO SHARES COST?

The Fund's NAV per share fluctuates and is based on the market value of all
securities and other assets of the Fund.

REDUCING OR ELIMINATING THE FRONT-END SALES CHARGE. You can reduce or
eliminate the applicable front-end sales charge, as follows.

QUANTITY DISCOUNTS. Larger purchases reduce the sales charge you pay. You can
combine purchases of shares made on the same day by you, your spouse, and your
children under age 21. In addition, purchases made at one time by a trustee or
fiduciary for a single trust estate or a single fiduciary account can be
combined.

ACCUMULATED PURCHASES. If you make an additional purchase of shares, you can
count previous share purchases still invested in the Fund in calculating the
applicable sales charge on the additional purchase.

LETTER OF INTENT. You can sign a Letter of Intent committing to purchase at
least $100,000 of shares within a 13-month period in order to combine such
purchases in calculating the sales charge. The Fund's custodian will hold shares
in escrow equal to the maximum applicable sales charge. If you complete the
Letter of Intent, the custodian will release the shares in escrow. If you do not
fulfill the Letter of Intent, the custodian will redeem the appropriate amount
from the shares held in escrow to pay the sales charges that were not applicable
to your purchases.

REINVESTMENT PRIVILEGE. You may reinvest, within 60 days, your share
redemption proceeds at the next determined NAV, without any sales charge.

PURCHASES AT NET ASSET VALUE. Shareholders who are trust customers of FirstMerit
Bank and its subsidiaries are exempt from the sales charge. The following
persons may also purchase shares of the Fund at net asset value, without a sales
charge: private banking clients of FirstMerit Bank and affiliates of FirstMerit
Corp., employees and retired employees of FirstMerit Bank, FirstMerit Corp.,
Federated Securities Corp., or their affiliates, or any bank or investment
dealer who has a sales agreement with Federated Securities Corp. with regard to
the Fund, and members of the families (including parents, grandparents,
siblings, spouses, children, aunts, uncles, and in-laws) of such employees or
retired employees. Additionally, no sales charge is imposed for shares purchased
through "wrap accounts" or similar programs, under which clients pay a fee for
services.

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers shares on a continuous, best-efforts basis.

FRONT-END SALES CHARGE REALLOWANCES

The Distributor receives a front-end sales charge on certain share sales. The
Distributor generally pays up to 90% (and as much as 100%) of this charge to
investment professional for sales and/or administrative services. Any payments
to investment professional in excess of 90% of the front-end sales charge are
considered supplemental payments. The Distributor retains any portion not paid
to a financial intermediary.

SHAREHOLDER SERVICES

The Fund may pay Federated Shareholder Services, a subsidiary of Federated, for
providing shareholder services and maintaining shareholder accounts. Federated
Shareholder Services may select others to perform these services for their
customers and may pay them fees.

RULE 12B-1 PLAN

As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of banks, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and share redemptions. Also, the
Fund's service providers that receive asset-based fees also benefit from stable
or increasing Fund assets. The Fund may compensate the Distributor more or less
than its actual marketing expenses. In no event will the Fund pay for any
expenses of the Distributor that exceed the maximum Rule 12b-1 Plan fee.

The Fund has no present intention of paying or accruing 12b-1 fees or
shareholder services fees during the fiscal year ending November 1999.

SUPPLEMENTAL PAYMENTS

Investment professional may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services may be reimbursed by the
Adviser or its affiliates.

Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
of qualified employees and their spouses to attend informational meetings about
the Fund or other special events at recreational-type facilities, or items of
material value. These payments will be based upon the amount of shares the
investment professional sells or may sell and/or upon the type and nature of
sales or marketing support furnished by the financial intermediary.

HOW TO BUY SHARES

SUBACCOUNTING SERVICES

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of shares.
This information should, therefore, be read together with any agreement between
the customer and the financial intermediary about to the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.

In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

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

Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.

As of January 4, 1999, the following shareholder owned of record,
beneficially, or both, 5% or more of outstanding shares: SEI Trust Company,
Oaks, Pennsylvania, owned approximately 2, 928,261.72 (96.69%) shares.

Shareholders owning 25% or more of outstanding shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

As of January 4, 1999, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding shares.

TAX INFORMATION

FEDERAL INCOME TAX

The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.

The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolio will be separate from those realized by the Fund.

FOREIGN INVESTMENTS

If the Fund purchases foreign securities, their investment income may be subject
to foreign withholding or other taxes that could reduce the return on these
securities. Tax treaties between the United States and foreign countries,
however, may reduce or eliminate the amount of foreign taxes to which the Fund
would be subject. The effective rate of foreign tax cannot be predicted since
the amount of Fund assets to be invested within various countries is uncertain.
However, the Fund intends to operate so as to qualify for treaty-reduced tax
rates when applicable.

Distributions from the Fund may be based on estimates of book income for the
year. Book income generally consists solely of the coupon income generated by
the portfolio, whereas tax basis income includes gains or losses attributable to
currency fluctuation. Due to differences in the book and tax treatment of fixed
income securities denominated in foreign currencies, it is difficult to project
currency effects on an interim basis. Therefore, to the extent that currency
fluctuations cannot be anticipated, a portion of distributions to shareholders
could later be designated as a return of capital, rather than income, for income
tax purposes, which may be of particular concern to simple trusts.

If the Fund invests in the stock of certain foreign corporations, they may
constitute Passive Foreign Investment Companies (PFIC), and the Fund may be
subject to federal income taxes upon disposition of PFIC investments.

If more than 50% of the value of the Fund's assets at the end of the tax year is
represented by stock or securities of foreign corporations, the Fund intends to
qualify for certain Code stipulations that would allow shareholders to claim a
foreign tax credit or deduction on their U.S. income tax returns. The Code may
limit a shareholder's ability to claim a foreign tax credit. Shareholders who
elect to deduct their portion of the Fund's foreign taxes rather than take the
foreign tax credit must itemize deductions on their income tax returns.

<PAGE>

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: : name, address, birth date , present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, and the total compensation received as a Trustee from the Trust
for its most recent fiscal year. The Trust is comprised of two Funds.

As of _____, the Fund's Board and Officers as a group owned less than 1% of the
Fund's outstanding Shares.

<PAGE>

NAME AGGREGATE
BIRTHDATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS FROM TRUST
POSITION WITH TRUST FOR PAST 5 YEARS

JOHN F. DONAHUE*+ Chief Executive Officer and Director or Trustee of the $0
Birth Date: July 28, 1924 Federated Fund Complex; Chairman and Director,
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee,
1001 Liberty Avenue Federated Investment Management Company; Chairman and
Pittsburgh, PA Director, Federated Investment Counseling and
CHAIRMAN AND TRUSTEE Federated Global Research Corp.; Chairman, Passport
Research, Ltd.

THOMAS G. BIGLEY Director or Trustee of the Federated Fund Complex;

Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director, Robroy Industries,
Pittsburgh, PA Inc. (coated steel conduits/computer storage
TRUSTEE equipment);formerly: Senior Partner, Ernst & Young

LLP; Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of Executive
Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated Fund Complex;
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior
Wood/ Commercial Dept. Vice President, John R. Wood and Associates, Inc.,
John R. Wood Associates, Inc. Realtors; Partner or Trustee in private real estate
Realtors ventures in Southwest Florida; formerly: President,
3255 Tamiami Trial North Naples Property Management, Inc. and Northgate Village

Naples, FL Development Corporation.

TRUSTEE

WILLIAM J. COPELAND Director or Trustee of the Federated Fund Complex;

Birth Date: July 4, 1918 Director and Member of the Executive Committee,
One PNC Plaza-23rd Floor Michael Baker Corp. (engineering, construction,

Pittsburgh, PA operations, and technical services); Chairman,

TRUSTEE Pittsburgh Foundation; Director, Forbes Fund
(philanthropy); formerly: Vice Chairman and Director,
PNC Bank, N.A. and PNC Bank Corp.; Director, Ryan

Homes, Inc.

Previous Positions: Director, United Refinery;
Director, Forbes Fund; Chairman, Pittsburgh
Foundation; Chairman, Pittsburgh Civic Light Opera;
Chairman, Health Systems Agency of Allegheny County;
Vice President, United Way of Allegheny County;
President, St. Clair Hospital; Director, Allegheny

Hospital.

JOHN F. CUNNINGHAM Director or Trustee of some of the Federated Fund

Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive
353 El Brillo Way Officer, Cunningham & Co., Inc. (strategic business
Palm Beach, FL consulting); Trustee Associate, Boston College;
TRUSTEE Director, Iperia Corp. (communications/software);

formerly: Director, Redgate Communications and EMC
Corporation (computer storage systems).

Previous Positions: Chairman of the Board and Chief
Executive Officer, Computer Consoles, Inc.; President
and Chief Operating Officer, Wang Laboratories;
Director, First National Bank of Boston; Director,

Apollo Computer, Inc.

NICHOLAS CONSTANTAKIS Director or Trustee of the Federated Fund Complex;
Birth Date: September 3, 1939 formerly: Partner, Andersen Worldwide SC.
175 Woodshire Drive

Pittsburgh, PA

TRUSTEE

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund Complex;
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh;
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical
Suite 1111 Center - Downtown; Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh Medical Center;
TRUSTEE Member, National Board of Trustees, Leukemia Society

of America.

PETER E. MADDEN Director or Trustee of the Federated Fund Complex;
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court; President, State Street
100 Royal Palm Way Bank and Trust Company and State Street Corporation.

Palm Beach, FL

TRUSTEE Previous Positions: Director, VISA USA and VISA
International; Chairman and Director, Massachusetts
Bankers Association; Director, Depository Trust
Corporation; Director, The Boston Stock Exchange..

CHARLES F. MANSFIELD, JR. Director or Trustee of some of the Federated Fund $
Birth Date: April 10, 1945 Complex; Management Consultant.
80 South Road
Westhampton Beach, NY Previous Positions: Chief Executive Officer, PBTC
TRUSTEE International Bank; Partner, Arthur Young & Company
(now Ernst & Young LLP); Chief Financial
Officer of Retail Banking Sector, Chase
Manhattan Bank; Senior Vice President, Marine
Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra
University.

JOHN E. MURRAY, JR., J.D., Director or Trustee of the Federated Fund Complex;
S.J.D. President, Law Professor, Duquesne University;
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray; Director,
President, Duquesne University Michael Baker Corp. (engineering, construction,
Pittsburgh, PA operations and technical services).

TRUSTEE

Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law; Dean and
Professor of Law, Villanova University School of Law.

MARJORIE P. SMUTS Director or Trustee of the Federated Fund Complex;
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning.
4905 Bayard Street
Pittsburgh, PA Previous Positions: National Spokesperson, Aluminum
TRUSTEE Company of America; television producer; business

owner.

JOHN S. WALSH Director or Trustee of some of the Federated Fund $
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction temporary heaters);
Valparaiso, IN President and Director, Manufacturers Products, Inc.
TRUSTEE (distributor of portable construction heaters);
President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly,
Inc. (heavy highway contractor); formerly: Vice
President, Walsh & Kelly, Inc.

J. CHRISTOPHER DONAHUE+* President or Executive Vice President of the Federated $0
Birth Date: April 11, 1949 Fund Complex; Director or Trustee of some of the Funds
Federated Investors Tower in the Federated Fund Complex; President, Chief
1001 Liberty Avenue Executive Officer and Director, Federated Investors,
Pittsburgh, PA Inc.; President and Trustee, Federated Investment
EXECUTIVE VICE PRESIDENT AND Management Company; President and Trustee, Federated
TRUSTEE Investment Counseling; President and Director,
Federated Global Investment Management Corp.;
President, Passport Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director, Federated

Services Company.

EDWARD C. GONZALES*
Birth Date: October 22, 1930 Trustee or Director of some of the Funds in the $0
Federated Investors Tower Federated Fund Complex; President, Executive Vice
1001 Liberty Avenue President and Treasurer of some of the Funds in the
Pittsburgh, PA Federated Fund Complex; Vice Chairman, Federated
PRESIDENT, TREASURER AND Investors, Inc.; Vice President, Federated Investment
TRUSTEE Management Company and Federated Investment
Counseling, Federated Global Investment Management
Corp. and Passport Research, Ltd.; Executive Vice
President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
</TABLE>

JOHN W. MCGONIGLE Executive Vice President and Secretary of the $0 Birth date:
October 26, 1938 Federated Fund Complex; Executive Vice President, Federated
Investors Tower Secretary, and Director, Federated Investors, Inc.; 1001 Liberty
Avenue Trustee, Federated Investment Management Company and Pittsburgh, PA
Federated Investment Counseling; Director, Federated EXECUTIVE VICE PRESIDENT
AND Global Investment Management Corp., Federated Services SECRETARY Company;
and Federated Securities Corp. RICHARD B. FISHER* President or Vice President of
some of the Funds in $0 Birth Date: May 17, 1923 the Federated Fund Complex;
Director or Trustee of Federated Investors Tower some of the Funds in the
Federated Fund Complex; 1001 Liberty Avenue Executive Vice President, Federated
Investors, Inc.; Pittsburgh, PA Chairman and Director, Federated Securities
Corp. VICE PRESIDENT * AN ASTERISK DENOTES A TRUSTEE/DIRECTOR WHO IS DEEMED TO
BE AN INTERESTED PERSON AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940. # A
POUND SIGN DENOTES A MEMBER OF THE BOARD'S EXECUTIVE COMMITTEE, WHICH HANDLES
THE BOARD'S RESPONSIBILITIES BETWEEN ITS MEETINGS. + MR. DONAHUE IS THE FATHER
OF J. CHRISTOPHER DONAHUE, EXECUTIVE VICE PRESIDENT AND TRUSTEE OF THE TRUST.
++MESSRS. CUNNINGHAM , MANSFIELD AND WALSH BECAME MEMBERS OF THE BOARD OF
TRUSTEES ON JANUARY 1, 1999. THEY DID NOT EARN ANY FEES FOR SERVING THE FUND
COMPLEX SINCE THESE FEES ARE REPORTED AS OF THE FISCAL YEAR END OF THE TRUST.
INVESTMENT ADVISER The Adviser conducts investment research and makes
investment decisions for the Fund. The Adviser shall not be liable to the Trust,
the Fund, or any Fund shareholder for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or omitted by
it, except acts or omissions involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties imposed upon it by its contract
with the Trust.

<PAGE>

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling shares of the Fund
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Fund's Board.

RESEARCH SERVICES. Research services may include advice as to the advisability
of investing in securities; security analysis and reports; economic studies;
industry studies; receipt of quotations for portfolio evaluations; and similar
services. Research services may be used by the Adviser or by affiliates of
Federated Investors in advising other accounts. To the extent that receipt of
these services may replace services for which the Adviser or its affiliates
might otherwise have paid, it would tend to reduce their expenses. The Adviser
and its affiliates exercise reasonable business judgment in selecting those
brokers who offer brokerage and research services to execute securities
transactions. They determine in good faith that commissions charged by such
persons are reasonable in relationship to the value of the brokerage and
research services provided.

Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:

MAXIMUM ADMINISTRATIVE AVERAGE AGGREGATE DAILY NET ASSETS OF THE
FEE FEDERATED FUNDS
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million

The administrative fee received during any fiscal year shall be at least
$100,000 per portfolio. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP is the independent public accountant for the Fund.

FEES PAID BY THE FUND FOR SERVICES

FOR THE YEARS ENDED: 11/30/98 11/30/97 11/30/96
Advisory Fee Earned $401,923 $345,408 $237,775
Advisory Fee Reduction $80,385 $60,082 $117,537
Brokerage Commissions $29,032 $44,778 $58,348
Administrative Fee $100,000 $100,000 $100,045
12b-1 Fee N/A N/A N/A
Shareholder Services Fee N/A N/A N/A

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise performance by using the SEC standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

Unless otherwise stated, any quoted performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The Funds' performance depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's or any class of Shares' expenses; and various other factors.

Fund performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-year and since inception periods ended November
30, 1998.

Yield given for the 30-day period ended November 30, 1998.

30 -DAY PERIOD 1 YEAR SINCE INCEPTION ON
SEPTEMBER 13, 1994
Total Return 0.83% 12.80% 19.97%
Yield 0.07% N/A N/A

<PAGE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the NAV per share at the end of the period. The number of shares owned at the
end of the period is based on the number of shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD

The yield of shares is calculated by dividing: (i) the net investment income per
share earned by the shares over a thirty-day period; by (ii) the maximum
offering price per share on the last day of the period. This number is then
annualized using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each month
over a 12-month period and is reinvested every six months. The yield does not
necessarily reflect income actually earned by shares because of certain
adjustments required by the SEC and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares,
the share performance is lower for shareholders paying those fees.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or performance
comparisons of shares to certain indices;

o charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete view
of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:

LIPPER ANALYTICAL SERVICES, INC. Ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all capital gains distributions and income dividends and takes
into account any change in net asset value over a specified period of time.

MORNINGSTAR, INC. An independent rating service, is the publisher of the
bi-weekly MUTUAL FUND VALUES, which rates more than 1,000 NASDAQ-listed mutual
funds of all types, according to their risk-adjusted returns. The maximum rating
is five stars, and ratings are effective for two weeks.

STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS (S&P 500).
Composite index of common stocks in industry, transportation, and financial and
public utility companies. Can be used to compare to the total returns of funds
whose portfolios are invested primarily in common stocks. In addition, the S&P
500 assumes reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are brokerage or
other fees calculated in the S&P figures.

<PAGE>

ADDRESSES

FIRSTMERIT EQUITY FUND

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

Administrator

FEDERATED ADMINISTRATIVE SERVICES Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779

Distributor

FEDERATED SECURITIES CORP. Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779

Investment Adviser

FIRSTMERIT BANK, N.A. 121 South Main Street
Akron, Ohio 44208-1440

Custodian

STATE STREET BANK AND TRUST COMPANY P.O. Box 8600
Boston, Massachusetts 02266-8600

Transfer Agent and Dividend Disbursing Agent
FEDERATED SHAREHOLDER SERVICES COMPANY P.O. Box 8600

Boston, Massachusetts 02266-8600

Independent Public Accountants

ARTHUR ANDERSEN LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222

PROSPECTUS

FIRSTMERIT GOVERNMENT
MONEY MARKET FUND

(formerly, Newpoint Government Money Market Fund)
A Portfolio of FirstMerit Funds

(formerly, Newpoint Funds)

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

Contents

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

JANUARY 31, 2000

<PAGE>

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 397 days 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.

<PAGE>

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

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

The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.

The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's start of business through the calendar year
ended December 31, 1998. 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 percentage for the Fund for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1992
through 1998. The percentages noted are: 3.10%, 2.45%, 3.46%, 5.28%, 4.79%,
4.96% and 4.87%, respectively.

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).The total
returns displayed above are based upon net asset value.

The Fund's total return for the nine month period from January 1, 1999 to
September 30, 1999 was 3.30%.

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%.

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

Average Annual Total Return

The following table represents theAverage Annual Total Return through 12/31/98.
<TABLE>

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

</TABLE>

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

What are the Fund's Fees and Expenses?

Firstmerit government Money Market Fund

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

<S> <C>
Shareholder Fees
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

Annual Fund Operating Expenses (Before Waivers)/1/

Expenses That are Deducted From Fund Assets (as a percentage of average net assets)

Management Fee/2/ 0.50%
Distribution (12b-1) Fee None
Shareholder Services Fee None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.80%
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.

Waiver of Fund Expenses 0.20%
Total Actual Annual Fund Operating Expenses (after waivers) 0.60%

2 The adviser voluntarily 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.

</TABLE>

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.

1 Year 3 Years 5 Years 10 Years
<S> <C> <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

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 a FirstMerit
trust representative. 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 anAutomated
ClearingHouse (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 FirstMerit 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

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

Purchases and Redemptions
Through Exchanges

You may purchase or redeem Fund shares through an exchange with FirstMerit
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, 1999, the Trust Division of FirstMerit Bank had
approximately $_____ billion in assets under administration, of which it had
investment discretion over $____ billion. FirstMerit Bank has served as the
Fund's investment adviser 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 or experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses
such as the Fund that rely on computers.

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.

(To be filed by amendment).

<PAGE>

FirstMerit
Government

Money Market Fund (formerly, Newpoint Government Money Market Fund)

A Portfolio of FirstMerit Funds
(formerly, Newpoint Funds)

JANUARY 31, 2000

A Statement of Additional Information (SAI) dated January 31, 2000 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is in the Fund's SAI and Annual and Semi-Annual Reports to
shareholders. To obtain the SAI, Annual Report, Semi-Annual Report and other
information without charge, and make inquiries, call FirstMerit Securities, Inc.

or the Fund at 1-800-627-1289.

You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, D.C. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected]. or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.

FirstMerit Government Money Market Fund
5800 Corporate Drive

Pittsburgh, PA 15237-7010
1-800-341-7400

Investment Company Act File No. 811-6224
Cusip 735686107

0121703A (1/2000)

[RECYCLED LOGO]

STATEMENT OF ADDITIONAL INFORMATION JANUARY 31, 2000

FIRSTMERIT GOVERNMENT MONEY MARKET FUND
(FORMERLY, NEWPOINT GOVERNMENT MONEY MARKET FUND)
(A PORTFOLIO OF FIRSTMERIT FUNDS (FORMERLY, NEWPOINT FUNDS))

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for FirstMerit Government Money
Market Fund dated January 31, 2000. Obtain the prospectus without charge by
calling 1-800-627-1289.

CONTENTS

How is the Fund Organized? 1
Securities in Which the Fund Invests 1
What do Shares Cost? 5
Massachusetts Partnership Law 5
Account and Share Information 5
Tax Information 5
Who Manages and Provides Services to the Fund? 6
How Does the Fund Measure Performance? 10
Addresses

Federated Securities Corp., Distributor,
subsidiary of Federated Investors

CUSIP 735686107

0121703B (1/2000)

<PAGE>

HOW IS THE FUND ORGANIZED?

The Fund is a diversified portfolio of Newpoint Funds (Trust). The Trust is an
open-end management investment company that was established under the laws of
the Commonwealth of Massachusetts on November 12, 1990. The Trust changed its
name from "Portage Funds" to "Newpoint Funds" on January 31, 1995. The Trust
changed its name from "Newpoint Funds" to FirstMerit Funds on January 31, 2000.
The Trust may offer separate series of shares representing interests in separate
portfolios of securities.

SECURITIES IN WHICH THE FUND INVESTS

Following is a table that indicates which types of securities or investment
techniques are a:

o P = PRINCIPAl investment of the Fund; (shaded in chart)

o A = ACCEPTABLe (but not principal) investment of the Fund

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

- -------------------------------------- -----------
- --------------------------------------- ----------
BORROWING 1 A

- ---------------------------------------
- --------------------------------------- ----------
ILLIQUID AND RESTRICTED SECURITIES 2 A

- ---------------------------------------
- --------------------------------------- ----------
LENDING OF PORTFOLIO SECURITIES A

- ---------------------------------------
- --------------------------------------- ----------
REPURCHASE AGREEMENTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
REVERSE REPURCHASE AGREEMENTS A

- --------------------------------------- ----------
- --------------------------------------- ----------
SECURITIES OF OTHER INVESTMENT A
COMPANIES

- ---------------------------------------
- --------------------------------------- ----------
US GOVERNMENT SECURITIES P

- --------------------------------------- ----------
- --------------------------------------- ----------
WHEN-ISSUED AND DELAYED DELIVERY A
TRANSACTIONS

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS

U.S. GOVERNMENT SECURITIES. Agency securities are issued or guaranteed by a
federal agency or other government sponsored entity acting under federal
authority (a "GSE"). Some GSEs are supported by the full, faith and credit of
the United States. Other GSEs receive support through 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 risk, but
not as low as Treasury securities.

Treasury securities are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest credit
risk.

Some of the short-term U.S. government securities the Fund may purchase carry
variable interest rates. These securities have a rate of interest subject to
adjustment at least annually. This adjusted interest rate is ordinarily tied to
some objective standard, such as the 91-day U.S. Treasury bill rate.

Variable interest rates will reduce the changes in the market value of such
securities from their original purchase prices. Accordingly, the potential for
capital appreciation or capital depreciation should not be greater than the
potential for capital appreciation or capital depreciation of fixed interest
rate U.S. government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities.

The Fund may purchase variable rate U.S. government securities upon the
determination by the Board that the interest rate as adjusted will cause the
instrument to have a current market value that approximates its par value on the
adjustment date.

INVESTMENT LIMITATIONS

ISSUING SENIOR SECURITIES AND BORROWING MONEY. The Fund may borrow money,
directly or indirectly, and issue senior securities to the maximum extent
permitted under the 1940 Act.

INVESTING IN COMMODITIES. The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities.

UNDERWRITING. The Fund may not underwrite the securities of other issuers,
except that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances where it
may be considered to be an underwriter under the Securities Act of 1933.

CONCENTRATION. The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily engaged
in the same industry. Government securities, municipal securities and bank
instruments will not be deemed to constitute an industry.

In applying the Fund's concentration restriction: (a) utility companies will be
divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (b)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (c) asset-backed
securities will be classified according to the underlying assets securing such
securities.

To conform to the current view of the SEC staff that only domestic bank
instruments may be excluded from industry concentration limitations, as a matter
of non-fundamental policy, the Fund will not exclude foreign bank instruments
from industry concentration limitation tests so long as the policy of the SEC
remains in effect. In addition, investments in bank instruments, and investments
in certain industrial development bonds funded by activities in a single
industry, will be deemed to constitute investment in an industry, except when
held for temporary defensive purposes. The investment of more than 25% of the
value of the Fund's total assets in any one industry will constitute
"concentration."

RESTRICTED SECURITIES. The Fund may invest in restricted securities. Restricted
securities are any securities in which the Fund may invest pursuant to its
investment objective and policies but which are subject to restrictions on
resale under federal securities law. Under criteria established by the Trustees,
certain restricted securities are determined to be liquid. To the extent that
restricted securities are not determined to be liquid, the Fund will limit their
purchase, together with other illiquid securities, to 10% of its net assets

BUYING ON MARGIN. The Fund will not purchase securities on margin, provided that
the Fund may obtain short-term credits necessary for the clearance of purchases
and sales of securities.

REGULATORY COMPLIANCE

The Fund may follow non-fundamental operational policies that are more
restrictive than their fundamental investment limitations, as set forth in this
prospectus and Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, (the "ICA"). In particular, the Fund
will comply with the various requirements of SEC Rule 2a-7 under the ICA which
regulates money market mutual funds. For example, with limited exceptions, Rule
2a-7 prohibits the investment of more than 5% of a fund's total assets in the
securities of any one issuer, although the Fund's investment limitation only
requires such 5% diversification with respect to 75% of its assets. The Fund
will invest more than 5% of its assets in any one issuer only under the
circumstances permitted by Rule 2a-7. The Fund will also determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by the rating agencies,
according to Rule 2a-7. The Fund may change these operational policies to
reflect changes in the laws and regulations without the approval of its
shareholders.

DETERMINING MARKET VALUE OF SECURITIES

The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.

The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Fund's investment objective. The procedures
include monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of market
value. The Trustees will decide what, if any, steps should be taken if there is
a difference of more than 0.5 of 1% between the two values. The Trustees will
take any steps they consider appropriate (such as redemption in kind or
shortening the average portfolio maturity) to minimize any material dilution or
other unfair results arising from differences between the two methods of
determining net asset value.

WHAT DO SHARES COST?

Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange and Federal Reserve Wire System are open for business. The
procedure for purchasing shares of the Fund is explained in the prospectus under
"How to Purchase Shares."

It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. FirstMerit Bank and Federated
Shareholder Services Company act as the shareholder's agent in depositing checks
and converting them to federal funds.

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Trustees upon the
written request of shareholders who own at least 10% of the Trust's outstanding
shares of all series entitled to vote.

As of January 4, 1999, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding shares: SEI Trust Company, Oaks,
Pennsylvania, owned approximately 73,554,716.81 (53.76%) shares; FirstMerit
Bank, Akron, Ohio, owned approximately 19,583,280.71 (14.31%) shares; and
Citizens National Bank, Canton, Ohio, owned approximately 7,080,890.57 (5.18%)
shares.

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

As of January 4, 1999, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding shares.

TAX INFORMATION

FEDERAL INCOME TAX

<PAGE>

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

BOARD OF TRUSTEES

As of _____, the Fund's Board and Officers as a group owned less than 1% of the
Fund's outstanding Shares.

<PAGE>

NAME AGGREGATE
BIRTHDATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS FROM TRUST
POSITION WITH TRUST FOR PAST 5 YEARS

THOMAS G. BIGLEY Director or Trustee of the Federated Fund Complex;

LLP; Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of Executive
Committee, University of Pittsburgh.

Naples, FL Development Corporation.

TRUSTEE

WILLIAM J. COPELAND Director or Trustee of the Federated Fund Complex;

Birth Date: July 4, 1918 Director and Member of the Executive Committee,
One PNC Plaza-23rd Floor Michael Baker Corp. (engineering, construction,
Pittsburgh, PA operations, and technical services); Chairman,

TRUSTEE Pittsburgh Foundation; Director, Forbes Fund
(philanthropy); formerly: Vice Chairman and Director,
PNC Bank, N.A. and PNC Bank Corp.; Director, Ryan
Homes, Inc.

JOHN F. CUNNINGHAM Director or Trustee of some of the Federated Fund

NICHOLAS CONSTANTAKIS Director or Trustee of the Federated Fund Complex;
Birth Date: September 3, 1939 formerly: Partner, Andersen Worldwide SC.
175 Woodshire Drive

Pittsburgh, PA

TRUSTEE

Palm Beach, FL

TRUSTEE

Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law; Dean and
Professor of Law, Villanova University School of Law.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser shall not be liable to the Trust, the Fund, or any Fund shareholder
for any losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.

<PAGE>

BROKERAGE TRANSACTIONS

ADMINISTRATOR

The administrative fee received during any fiscal year shall be at least
$50,000 per portfolio. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP is the independent public accountant for the Fund.

FEES PAID BY THE FUND FOR SERVICES

FOR THE YEARS ENDED NOVEMBER 30 11/30/98 11/30/97 11/30/96
Advisory Fee Earned $600,375 $495,323 $435,274
Advisory Fee Reduction $240,150 $198,130 $174,100
Administrative Fee $180,112 $148,597 $130,582

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise Share performance by using the SEC standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of Shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's or any class of Shares' expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns given for the one-year, five-year and since inception periods
ended November 30, 1998.

Yield given for the 7-day period ended November 30, 1998.

7 -DAY PERIOD 1 YEAR 5 YEAR SINCE INCEPTION
ON MARCH 11, 1991
Total Return N/A 4.92% 4.63% 4.28%
Yield 4.42% N/A N/A N/A
Effective Yield 4.51% N/A N/A N/A

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise share performance by using the SEC standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

Unless otherwise stated, any quoted share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's or any class of shares' expenses; and various other factors.

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.

YIELD

The yield of shares is calculated by dividing: (i) the net investment income per
share earned by the shares over a thirty-day period; by (ii) the maximum
offering price per share on the last day of the period. This number is then
annualized using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each month
over a 12-month period and is reinvested every six months. The effective yield
is calculated by compounding the unannualized base-period return by: adding 1 to
the base-period return, raising the sum to the 365/7th power; and subtracting 1
from the result.

The yield and effective yield do not necessarily reflect income actually earned
by shares because of certain adjustments required by the SEC and, therefore, may
not correlate to the dividends or other distributions paid to shareholders.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of shares to certain indices;

o discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES, for example, is a
weekly quote of the average daily offering for selected federal agency issues
maturing in 30 days.

SALOMAN 30-DAY TREASURY BILL INDEX is a weekly quote of the most representative
yields for selected securities issued by the U.S. Treasury maturing in 30 days.

<PAGE>

ADDRESSES

FIRSTMERIT GOVERNMENT MONEY MARKET FUND

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

Administrator

FEDERATED ADMINISTRATIVE SERVICES. Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779

Distributor

FEDERATED SECURITIES CORP. Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779

Investment Adviser

FIRSTMERIT BANK, N.A. 121 South Main Street
Akron, Ohio 44208-1440

Custodian

STATE STREET BANK AND TRUST COMPANY P.O. Box 8600
Boston, Massachusetts 02266-8600

Transfer Agent and Dividend Disbursing Agent
FEDERATED SHAREHOLDER SERVICES COMPANY P.O. Box 8600
Boston, Massachusetts 02266-8600

Independent Public Accountants

ARTHUR ANDERSEN LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222

PART C. OTHER INFORMATION.
Item 23. EXHIBITS:

(a) Copy of Declaration of Trust of the Registrant; (1)

(i) Amendment No. 1 to Declaration of Trust dated
November 12, 1990; (2) (ii) Conformed Copy of
Amendment No. 2 to Declaration of Trust dated
November 12, 1990; (6) (iii) Conformed Copy of
Amendment No. 3 to Declaration of Trust dated
November 12, 1990; (6) (iv) Conformed Copy of
Amendment No. 4 to Declaration of Trust dated
November 12, 1990;(7)

(b) Copy of By-Laws of the Registrant; (1)

(i) Copy of Amendment No. 1 to By-Laws; (9)
(ii) Copy of Amendment No. 2 to By-Laws; (10)
(iii) Copy of Amendment No. 3 to By-Laws; (10)
(iv) Copy of Amendment No. 4 to By-Laws; (10)
(c) Copy of Specimen Certificate for Shares of
Beneficial Interest of the Registrant; (6)
(d) Conformed Copy of Investment Advisory Contract
of the Registrant; (8)

(i) Conformed Copy of Exhibit B to Investment
Advisory Contract of the Registrant to add
Portage Equity Fund to the present Investment
Advisory Contract; (6)

(e) (i) Conformed Copy of Distributor's Contract
of the Registrant; (8)
(ii) Conformed Copy of Exhibit to Distributor's
Contract of the Registrant; (6)
(iii) Conformed Copy of Administrative Services
Agreement; (6)

(f) Not applicable;

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

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed November 26, 1990 (File Nos. 33-37993 and
811-6224).

2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed January 4, 1991 (File Nos. 33-37993 and
811-6224).

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed July 5, 1994 (File Nos. 33-37993 and
811-6224).

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed January 27, 1995 (File Nos. 33-37993
and 811-6224).

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed January 21, 1997 (File Nos. 33-37993
and 811-6224).

9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed January 23, 1998 (File Nos. 33-37993
and 811-6224).

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed January 28, 1999 (File Nos. 33-37993
and 811-6224).

<PAGE>

(g) (i) Conformed copy of Custodian Agreement of the
Registrant; (5) (ii) Conformed copy of Custody Fee
Schedule; (9)

(h) Conformed copy of Transfer Agency and Service
Agreement of the Registrant; (5) (i) Conformed copy
of Amendment Number 1 to Transfer Agency and
Service Agreement; (5) (ii) Conformed Copy of
Shareholder Services Plan; (6) (iii) Copy of
Shareholder Services Contract; (6) (iv) Copy of
Shareholder Services Agreement; (6) (v) Conformed
Copy of Agreement for Fund Accounting, Shareholder
Recordkeeping, and Custody Services Procurement;
(7)

(i) Conformed Copy of Opinion and Consent of Counsel
as to legality of shares being registered; (8)
(j) Not applicable;
(k) Not applicable;
(l) Conformed Copy of Initial Capital Understanding;(2)
(m) (i) Conformed Copy of Distribution Plan; (6)
(ii) Copy of Sales Agreement; (6) (iii) Copy of
12b-1 Agreement; (6)

(n) Not applicable;

(o) Conformed Copy of Power of Attorney. (10)
(p) Not applicable.

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

2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed January 4, 1991 (File Nos. 33-37993 and
811-6224).

5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed January 27, 1994 (File Nos. 33-37993 and
811-6224).

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed July 5, 1994 (File Nos. 33-37993 and
811-6224).

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed January 27, 1995 (File Nos. 33-37993
and 811-6224).

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed January 21, 1997 (File Nos. 33-37993
and 811-6224).

9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed January 23, 1998 (File Nos. 33-37993
and 811-6224).

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed January 28, 1999 (File Nos. 33-37993
and 811-6224).

<PAGE>

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH FUND:

None

Item 25. INDEMNIFICATION: (1)

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:

(a) FirstMerit Bank, a national banking association formed in
1947, is a wholly-owned subsidiary of FirstMerit Corp.
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, 1999 the trust division of FirstMerit
Bank had approximately $4 billion under administration of
which it had investment discretion over $2.5 billion. The
principal executive officers of the Fund's Investment
Adviser, and the Directors of the Fund's Adviser, are set
forth in the following tables. Unless otherwise noted, the
position listed under Other Substantial Business,
Profession, Vocation or Employment is with FirstMerit Bank.

Other Substantial
Position with Business, Profession,
NAME THE ADVISER VOCATION OR EMPLOYMENT

John R. Cochran President &
Chief Executive Officer

Sid Bostic President &
Chief Operating Officer

John R. Masco Executive Vice President

Robert Brecht Executive Vice President

Jack Gravo Executive Vice President

Bruce Kephart Executive Vice President

George Paidas Executive Vice President

Charles Valentine Executive Vice President

Richard Norton Executive Vice President

Chris Maurer Executive Vice President

Terry Bichsel Executive Vice President

Terry Patton Executive Vice President

William Stansfier Executive Vice President

Danny Griffin Executive Vice President

Bill Lamb Executive Vice President

Robert Morlan Executive Vice President

Greg McDermott Executive Vice President

Gary Elek Executive Vice President

John R. Cochran Director

Sid Bostic Director

John Masco Director

Robert Brecht Director

Jack Gravo Director

Bruce Kephart Director

George Paidas Director

Terry Patton Director

Charles Valentine Director

Richard Norton Director

Chris Maurer Director

Terry Bichsel Director

William E. Stansifer Director

Bill Lamb Director

Robert Morlan Director

Larry Shoff Director

<PAGE>

ITEM 27. PRINCIPAL UNDERWRITERS:

(a) Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; Fixed Income
Securities, Inc.; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Managed Series Trust; Marshall Funds, Inc.; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
SouthTrust Funds; Tax-Free Instruments Trust; The Planters Funds; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; World
Investment Series, Inc.; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
DG Investor Series; High Yield Cash Trust; Investment Series Trust; Star Funds;
Targeted Duration Trust; The Virtus Funds; Trust for Financial Institutions.

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

(b)
<TABLE>
<CAPTION>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard B. Fisher Chairman, Chief Executive Vice President
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer
Pittsburgh, PA 15222-3779 Federated Securities Corp.

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Arthur L. Cherry Director --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ronald M. Petnuch Senior Vice President,

Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis M. Laffey Vice President,

Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Amy Michalisyn Vice President,

Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy S. Johnson Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis McAuley Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
</TABLE>

<PAGE>

Item 28. LOCATION OF ACCOUNTS AND RECORDS:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31-a through 31a-3 promulgated
thereunder are maintained at one of the following locations:

<TABLE>
<CAPTION>
<S> <C>
Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(Notices should be sent to the Agent for service at the above address)

Federated Shareholder Services Company Federated Investors Tower
("Transfer Agent, Dividend 1001 Liberty Avenue
Disbursing Agent and Pittsburgh, PA 15222-3779

Portfolio Recordkeeper")

Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

FirstMerit Bank, N.A. 121 South Main Street
("Adviser") Akron, Ohio 44308-1444

State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600

</TABLE>

Item 29. MANAGEMENT SERVICES: Not applicable.

Item 30. UNDERTAKINGS:

Registrant hereby undertakes to comply with the provisions of
Section 16 (c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, NEWPOINT FUNDS, has duly caused
this Amendment to its Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 30th day of November, 1999.

NEWPOINT FUNDS

BY: /s/ C. Todd Gibson
C. Todd Gibson, Assistant Secretary
Attorney in Fact for John F. Donahue

November 30, 1999

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE

By: /s/ C. Todd Gibson Attorney in Fact November 30, 1999
C. Todd Gibson For the Persons
ASSISTANT SECRETARY Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

Edward C. Gonzales* President, Treasurer and
Trustee (Principal Financial
and Accounting Officer)

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

Nicholas Constantakis* Trustee

William J. Copeland* Trustee

John F. Cunningham* Trustee

J. Christopher Donahue* Trustee

Lawrence D. Ellis, M.D.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield, Jr.* Trustee

John E. Murray, Jr., J.D., S.J.D.* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

* By Power of Attorney