RIMCO MONUMENT FUNDS, 497, 1994-06-29

RIMCO MONUMENT FUNDS
497, 1994-06-29

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RIMCO Monument Funds
Combined Prospectus

RIMCO Monument Funds (the "Trust"), an open-end management investment company
(a mutual fund), offers investors interests in the following four separate
investment portfolios (the "Funds"), each having a distinct investment
objective and policies:

. RIMCO Monument Prime Money Market Fund;
. RIMCO Monument U.S. Treasury Money Market Fund;
. RIMCO Monument Bond Fund; and
. RIMCO Monument Stock Fund.

This combined prospectus contains the information you should read and know
before you invest in any of the Funds in the Trust. Keep this prospectus for
future reference.

Additional information about the Trust is contained in the Trust's combined
Statement of Additional Information dated June 30, 1994 which has also been
filed with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information
free of charge, obtain other information, or make inquiries about any of the
Funds by writing to or calling the Trust.

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF THE
RIGGS NATIONAL BANK OF WASHINGTON, D.C., ARE NOT ENDORSED OR GUARANTEED BY THE
RIGGS NATIONAL BANK OF WASHINGTON, D.C., AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

THE PRIME MONEY MARKET FUND AND U.S. TREASURY MONEY MARKET FUND ATTEMPT TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE, BUT THERE IS NO ASSURANCE
THAT THESE FUNDS WILL BE ABLE TO DO SO.

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

Prospectus dated June 30, 1994

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SYNOPSIS 1
- -------------------------------------
Risk Factors 1

EXPENSES OF THE FUNDS 2
- -------------------------------------

FINANCIAL HIGHLIGHTS 4

- -------------------------------------
PERFORMANCE INFORMATION 8
- -------------------------------------
OBJECTIVE OF EACH FUND 8
- -------------------------------------
Prime Money Market Fund 8
Acceptable Investments 9
Ratings 9
Bank Instruments 9
Credit Enhancement 9

Municipal Securities 10
Variable Rate Demand Notes 10
Short-Term Credit Facilities 10
Demand Features 10
Regulatory Compliance 11
Concentration of Investments 11
Investment Limitations 11
U.S. Treasury Money Market Fund 11
Acceptable Investments 11
Investment Limitations 12
Bond Fund 12
Acceptable Investments 12
Collateralized Mortgage
Obligations 12
Participation Interests 13
Portfolio Turnover 13
Investment Limitations 14
Stock Fund 14
Acceptable Investments 14
Convertible Securities 15
Portfolio Turnover 16
Investment Limitations 16

PORTFOLIO INVESTMENTS AND
STRATEGIES 16
- -------------------------------------
Borrowing Money 16
Diversification 16
Restricted and Illiquid
Securities 16
Investing in New Issuers 17
Repurchase Agreements 17
When-Issued and Delayed Delivery
Transactions 17
Lending of Portfolio Securities 17
U.S. Government Securities 18
Put and Call Options 18
Futures and Options on Futures 18
Risks 19
Investing in Securities of Other
Investment Companies 19
Demand Master Notes 19
Foreign Investments 20
Temporary Investments 20

RIMCO MONUMENT FUNDS INFORMATION 20
- -------------------------------------
Management of RIMCO Monument
Funds 20
Board of Trustees 20
Investment Adviser 20
Advisory Fees 20
Adviser's Background 21
Distribution of Shares of the
Funds 21
Administration of the Funds 21
Administrative Services 21
Custodian 22
Transfer Agent, Dividend
Disbursing Agent and Portfolio
Accounting Services 22
Legal Counsel 22
Independent Auditors 22

NET ASSET VALUE 22
- -------------------------------------

INVESTING IN THE FUNDS 22
- -------------------------------------
Share Purchases 22
Through Riggs National Bank 23
By Mail 23
By Wire 23
Through Authorized
Broker/Dealers 23
Minimum Investment Required 23
What Shares Cost 24
Purchases at Net Asset Value 24
Purchases with Proceeds from
Redemptions of Unaffiliated
Mutual Fund Shares 24
Dealer Concession 25
Other Payments to Financial
Institutions 25
Reducing the Sales Charge 25
Quantity Discounts and
Accumulated Purchases 25
Letter of Intent 26
Reinvestment Privilege 26
Concurrent Purchases 26
Systematic Investment Program 26
Retirement Plans 26
Certificates and Confirmations 27
Dividends 27
Capital Gains 27

EXCHANGES 27
- -------------------------------------

REDEEMING SHARES 28
- -------------------------------------
By Telephone 28
By Mail 29
Redemption in Kind 29
Systematic Withdrawal Program 30
Accounts with Low Balances 30

SHAREHOLDER INFORMATION 30
- -------------------------------------
Voting Rights 30
Massachusetts Partnership Law 30

EFFECT OF BANKING LAWS 31
- -------------------------------------

TAX INFORMATION 32
- -------------------------------------
Federal Income Tax 32

ADDRESSES Inside Back Cover
- -------------------------------------

SYNOPSIS
- -------------------------------------------------------------------------------

The Trust, an open-end management investment company, was established as a
Massachusetts business trust under a Declaration of Trust dated April 1, 1991.
The Declaration of Trust permits the Trust to offer separate series of shares
of beneficial interest representing interests in separate portfolios of
securities. The shares of any one portfolio may be offered in separate
classes. The Funds are designed for customers of financial institutions such
as banks, fiduciaries, custodians of public funds and investment advisers.

As of the date of this prospectus, the Trust is comprised of the following
four Funds:

. RIMCO Monument Prime Money Market Fund ("Prime Money Market Fund")--
seeks to provide current income consistent with stability of principal
and liquidity by investing exclusively in a portfolio of money market
instruments maturing in 13 months or less;

. RIMCO Monument U.S. Treasury Money Market Fund ("U.S. Treasury Money
Market Fund" and together with the Prime Money Market Fund, the "Money
Market Funds")--seeks to provide current income consistent with stability
of principal and liquidity by investing in U.S. Treasury obligations;

. RIMCO Monument Bond Fund ("Bond Fund")--seeks to achieve current income
by investing in a diversified portfolio of investment grade securities
and will attempt to maintain an average weighted portfolio maturity of
between five and ten years; and

. RIMCO Monument Stock Fund ("Stock Fund")--seeks to provide growth of
capital and income primarily through equity investments such as common
stocks and securities convertible into common stocks.

For information on how to purchase shares of any of the Funds please refer to
"Investing in the Funds." In most cases, a minimum initial investment of
$2,500 is required for each Fund. In most cases, subsequent investments must
be in amounts of at least $100. See "Minimum Investment Required." Shares of
the Money Market Funds are sold at net asset value without a sales charge.
Shares of the Bond and Stock Funds are sold at net asset value plus a maximum
sales charge of 3.50%, which may be reduced as discussed under "What Shares
Cost." Shares of each Fund are redeemed at net asset value. Information on
redeeming shares may be found under "Redeeming Shares." The Funds are advised
by Riggs Investment Management Corp.

RISK FACTORS. Investors should be aware of the following general
considerations: market value of fixed-income securities, which constitute a
major part of the investments of several Funds, may vary inversely in response
to changes in prevailing interest rates. The foreign securities in which
several Funds may invest may be subject to certain risks in addition to those
inherent in U.S. investments. One or more Funds may make certain investments
and employ certain investment techniques that involve other risks, including
entering into repurchase agreements, lending portfolio securities and entering
into futures contracts and related options as hedges. These risks and those
associated with investing in mortgage-backed securities, when-issued
securities, options and variable rate securities are described under
"Objective of Each Fund" and "Portfolio Investments and Strategies."

EXPENSES OF THE FUNDS--MONEY MARKET FUNDS
- -------------------------------------------------------------------------------

SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price).................................................................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of of-
fering price)............................................................. None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds
as applicable)........................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........ None
Exchange Fee.............................................................. None
<CAPTION>

ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)

Prime U.S. Treasury
Money Market Money Market
Fund Fund
------------ -------------
<S> <C> <C>
Management Fee (after waiver) (1).................... 0.22% 0.30%
12b-1 Fees........................................... None None
Total Other Expenses................................. 0.21% 0.30%
Total Fund Operating Expenses (2)................ 0.43% 0.60%
</TABLE>
- --------

(1) The management fee of each Fund has been reduced to reflect the voluntary
waiver by the investment adviser. The adviser can terminate this voluntary
waiver of expenses at any time at its sole discretion. With respect to
each Fund the maximum management fee is 0.50%.

(2) Total fund operating expenses of Prime Money Market Fund were 0.71% absent
the voluntary waiver detailed in Note (1). The total fund operating
expenses for the U.S. Treasury Money Market Fund were 0.56% for the fiscal
year ended April 30, 1994 and were 0.72% absent the voluntary waiver by
the investment adviser. The total fund operating expenses for the U.S.
Treasury Money Market Fund in the table above are based on expenses
expected to be incurred during the fiscal year ending April 30, 1995.
During the course of this period, expenses may be more or less than the
average amount shown above.

THE PURPOSE OF THIS TABLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER IN THE FUNDS WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS
AND EXPENSES, SEE "RIMCO MONUMENT FUNDS INFORMATION." Wire-transferred
redemptions of less than $5,000 or in excess of one per month may be subject
to additional fees.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
--------------- --------------- --------------- ---------------
U.S. U.S. U.S. U.S.
Prime Treasury Prime Treasury Prime Treasury Prime Treasury
Money Money Money Money Money Money Money Money
Market Market Market Market Market Market Market Market
EXAMPLE Fund Fund Fund Fund Fund Fund Fund Fund
- ------- ------ -------- ------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
You would pay the
following expenses on a
$1,000 investment
assuming (1) 5% annual
return and (2)
redemption at the end of
each time period........ $4 $6 $14 $19 $24 $33 $54 $75
</TABLE>

THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

EXPENSES OF THE FUNDS--BOND FUND AND STOCK FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)................................................................... 3.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price).......................................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds
as applicable).......................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)....... None
Exchange Fee............................................................. None
<CAPION>

ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)

Bond Fund Stock Fund
--------- ----------
<S> <C> <C>
Management Fee (after waiver) (1).......................... 0.34% 0.55%
12b-1 Fees................................................. None None
Total Other Expenses....................................... 0.48% 0.45%
Total Fund Operating Expenses (2)...................... 0.82% 1.00%
</TABLE>
- --------

(2) Total fund operating expenses of the Stock Fund were 1.20% absent the
voluntary waiver detailed in Note (1). The total fund operating expenses
for the Bond Fund were 0.68% for the fiscal year ended April 30, 1994 and
were 1.16% absent the voluntary waiver by the investment adviser. The
total fund operating expenses for the Bond Fund in the table above are
based on expenses expected to be incurred during the fiscal year ending
April 30, 1995. During the course of this period, expenses may be more or
less than the average amount shown above.

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
---------- ---------- ---------- ----------
Bond Stock Bond Stock Bond Stock Bond Stock
EXAMPLE Fund Fund Fund Fund Fund Fund Fund Fund
- ------- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
You would pay the
following expenses on a
$1,000 investment assuming
(1) 5% annual return; (2)
redemption at the end of
each time period; and (3)
payment of the maximum
sales load of 3.50%. As
noted in the table above,
the Funds charge no
contingent deferred sales
charge ................... $43 $45 $60 $66 $79 $88 $133 $153
</TABLE>

THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

RIMCO MONUMENT PRIME MONEY MARKET FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The following table has been audited by Ernst & Young, the Trust's independent
auditors. Their report dated June 8, 1994 on the Trust's financial statements
for the year ended April 30, 1994 is included in the combined Annual Report,
which is incorporated by reference. This table should be read in conjunction
with the Trust's financial statements and notes thereto, which may be obtained
free of charge from the Trust.

<TABLE>
<CAPTION>
Year Ended April 30,
--------------------------
1994 1993 1992*
- ---------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------
Income from investment operations
- ----------------------------------------------
Net investment income 0.03 0.04 0.03
- ---------------------------------------------- ------ ------ ------
Less distributions
- ----------------------------------------------
Dividends to shareholders from net investment (0.03) (0.04) (0.03)
income ------ ------ ------
- ----------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- ------ ------ ------
Total return** 3.08% 3.55% 2.90%
- ----------------------------------------------
Ratios to average net assets
- ----------------------------------------------
Expenses 0.43% 0.41% 0.27%(a)
- ----------------------------------------------
Net investment income 3.02% 3.46% 4.56%(a)
- ----------------------------------------------
Expense waiver/reimbursement (b) 0.28% 0.31% 0.47%(a)
- ----------------------------------------------
Supplemental data
- ----------------------------------------------
Net assets, end of period (000 omitted) $334,765 $277,267 $111,329
- ----------------------------------------------
</TABLE>

* For the period from September 17, 1991 (date of initial public investment)
to April 30, 1992.

** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.

(a) Computed on an annualized basis.

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

RIMCO MONUMENT U.S. TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------
1994 1993 1992*
- ---------------------------------------------- -------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------
Income from investment operations
- ----------------------------------------------
Net investment income 0.03 0.03 0.02
- ---------------------------------------------- ------ ------ ------
Less distributions
- ----------------------------------------------
Dividends to shareholders from net investment (0.03) (0.03) (0.02)
income ------ ------ ------
- ----------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------- ------ ------ ------
Total return** 2.64% 2.92% 2.37%
- ----------------------------------------------
Ratios to average net assets
- ----------------------------------------------
Expenses 0.56% 0.52% 0.41%(a)
- ----------------------------------------------
Net investment income 2.61% 2.86% 4.08%(a)
- ----------------------------------------------
Expense waiver/reimbursement (b) 0.16% 0.29% 0.42%(a)
- ----------------------------------------------
Supplemental data
- ----------------------------------------------
Net assets, end of period (000 omitted) $106,948 $86,875 $51,039
- ----------------------------------------------
</TABLE>

* For the period from October 8, 1991 (date of initial public investment) to
April 30, 1992.

** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.

(a) Computed on an annualized basis.

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

RIMCO MONUMENT BOND FUND

FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
Year Ended April 30,
-----------------------
1994 1993*
- ------------------------------------------------ ---------- ----------
<S> <C> <C>
Net asset value, beginning of period $10.40 $10.00
- ------------------------------------------------
Income from investment operations
- ------------------------------------------------
Net investment income 0.53 0.60
- ------------------------------------------------
Net realized and unrealized gain (loss) on (0.38) 0.66
investments ---------- ----------
- ------------------------------------------------
Total from investment operations 0.15 1.26
- ------------------------------------------------
Less distributions
- ------------------------------------------------
Dividends to shareholders from net investment
income (0.53) (0.60)
- ------------------------------------------------
Distributions to shareholders from net realized (0.56) (0.26)
gain on investment transactions ---------- ----------
- ------------------------------------------------
Total distributions (1.09) (0.86)
- ------------------------------------------------ ---------- ----------
Net asset value, end of period $ 9.46 $10.40
- ------------------------------------------------ ---------- ----------
Total return** 1.10% 12.93%
- ------------------------------------------------
Ratios to average net assets
- ------------------------------------------------
Expenses 0.68% 0.50%(a)
- ------------------------------------------------
Net investment income 5.15% 5.95%(a)
- ------------------------------------------------
Expense waiver/reimbursement (b) 0.48% 0.65%(a)
- ------------------------------------------------
Supplemental data
- ------------------------------------------------
Net assets, end of period (000 omitted) $47,552 $44,668
- ------------------------------------------------
Portfolio turnover rate 344% 371%
- ------------------------------------------------
</TABLE>

* For the period from May 11, 1992 (date of initial public investment) to
April 30, 1993.

** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a) Computed on an annualized basis.

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

Further information about the Fund's performance is contained in the Trust's
Annual Report dated April 30, 1994, which can be obtained free of charge.

RIMCO MONUMENT STOCK FUND

FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
Year Ended April 30,
-----------------------
1994 1993*
- ------------------------------------------------ ---------- ----------
<S> <C> <C>
Net asset value, beginning of period $10.46 $10.00
- ------------------------------------------------
Income from investment operations
- ------------------------------------------------
Net investment income 0.16 0.21
- ------------------------------------------------
Net realized and unrealized gain (loss) on 1.44 0.46
investments ---------- ----------
- ------------------------------------------------
Total from investment operations 1.60 0.67
- ------------------------------------------------
Less distributions
- ------------------------------------------------
Dividends to shareholders from net investment
income (0.16) (0.21)
- ------------------------------------------------
Distributions to shareholders from net realized
gain on investment transactions (0.01) --
- ------------------------------------------------ ---------- ----------
Total distributions (0.17) (0.21)
- ------------------------------------------------ ---------- ----------
Net asset value, end of period $11.89 $10.46
- ------------------------------------------------ ---------- ----------
Total return** 15.28% 6.35%
- ------------------------------------------------
Ratios to average net assets
- ------------------------------------------------
Expenses 1.00% 0.69%(a)
- ------------------------------------------------
Net investment income 1.36% 2.18%(a)
- ------------------------------------------------
Expense waiver/reimbursement (b) 0.20% 0.47%(a)
- ------------------------------------------------
Supplemental data
- ------------------------------------------------
Net assets, end of period (000 omitted) $58,597 $37,539
- ------------------------------------------------
Portfolio turnover rate 89% 92%
- ------------------------------------------------
</TABLE>

* For the period from May 11, 1992 (date of initial public investment) to
April 30, 1993.

** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.

(a) Computed on an annualized basis.

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

Further information about the Fund's performance is contained in the Trust's
Annual Report dated April 30, 1994, which can be obtained free of charge.

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

From time to time the Bond Fund and the Stock Fund may advertise total return
and all of the Funds may advertise yield. Prime Money Market Fund and U.S.
Treasury Money Market Fund may also advertise effective yield.

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

The yields of Prime Money Market Fund and U.S. Treasury Money Market Fund
represent the annualized rate of income earned on an investment in a Fund over
a seven-day period. It is the annualized dividends earned during the period on
the investment, shown as a percentage of the investment. The effective yield
is calculated similarly to the yield, but, when annualized, the income earned
on an investment in a Fund is assumed to be reinvested daily. The effective
yield will be slightly higher than the yield because of the compounding effect
of this assumed reinvestment.

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

From time to time, the Funds may advertise their performance using certain
financial publications and/or compare their performance to certain indices.

OBJECTIVE OF EACH FUND
- -------------------------------------------------------------------------------

The investment objective and policies of each Fund appear below. The
investment objective of a Fund cannot be changed without the approval of
holders of a majority of that Fund's shares. While there is no assurance that
a Fund will achieve its investment objective, it endeavors to do so by
following the investment policies described in this prospectus.

Unless indicated otherwise, the investment policies of a Fund may be changed
by the Trustees without approval of shareholders. Shareholders will be
notified before any material change in these policies becomes effective.

Additional information about investment limitations, strategies that one or
more Funds may employ, and certain investment policies mentioned below appear
in the "Portfolio Investments and Strategies" section of this prospectus and
in the Statement of Additional Information.

PRIME MONEY MARKET FUND

The investment objective of Prime Money Market Fund is to provide current income
consistent with stability of principal and liquidity. The Fund pursues its
investment objective by investing exclusively in a portfolio of money market
instruments maturing in 13 months or less. The average maturity of the money
market instruments in the Fund's portfolio, computed on a dollar-weighted basis,
will be 90 days or less.

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

. domestic issues of corporate or municipal debt obligations, including
variable rate demand notes;

. commercial paper (including Canadian Commercial Paper and Europaper);

. certificates of deposit, demand and time deposits, savings shares,
bankers' acceptances and other instruments of domestic and foreign banks,
savings and loans and other deposit or thrift institutions ("Bank
Instruments");

. short-term credit facilities;

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

. other money market instruments.

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

RATINGS. An NRSRO's highest rating category is determined without regard for
sub-categories and gradations. For example, securities rated A-1 or A-1+ by
Standard & Poor's Corporation ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or F-1+ or F-1 by Fitch Investors Service, Inc. ("Fitch"),
are all considered rated in the highest short-term rating category. The Fund
will follow applicable regulations in determining whether a security rated by
more than one NRSRO can be treated as being in the highest short-term rating
category; currently, such securities must be rated by two NRSROs in their
highest rating category. See "Regulatory Compliance."

BANK INSTRUMENTS. The Fund only invests in Bank Instruments either issued by
an institution having capital, surplus and undivided profits over $100 million
or insured by the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF"). Bank Instruments may include Eurodollar Certificates
of Deposit ("ECDs"), Yankee Certificates of Deposit ("Yankee CDs") and
Eurodollar Time Deposits ("ETDs"). The Fund will treat securities credit-
enhanced with a bank's letter of credit as Bank Instruments.

CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may have been
credit-enhanced by a guaranty, letter of credit or insurance. The Fund will
evaluate the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "Credit Enhancer"), rather than the issuer. However, credit-
enhanced securities will generally not be treated as having been issued by the
Credit Enhancer for diversification purposes. Under certain circumstances, the
Fund would be required to do so under applicable regulations. The bankruptcy,
receivership or default of the Credit Enhancer will adversely affect the
quality and marketability of the underlying security.

MUNICIPAL SECURITIES. Municipal securities are generally issued to finance
public works, such as airports, bridges, highways, housing, hospitals, mass
transportation projects, schools, streets, and water and sewer works. They are
also issued to repay outstanding obligations, to raise funds for general
operating expenses, and to make loans to other public institutions and
facilities.

Municipal securities include private activity bonds issued by or on behalf of
public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.

The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment
of principal and interest. Interest on and principal of revenue bonds,
however, are payable only from the revenue generated by the facility financed
by the bond or other specified sources of revenue. Revenue bonds do not
represent a pledge of credit or create any debt of or charge against the
general revenues of a municipality or public authority. Bonds are typically
classified as revenue bonds.

INVESTMENT RISKS. Yields on municipal securities depend on a variety of
factors, including: the general conditions of the short-term municipal
note market and of the municipal bond market; the size of the particular
offering; the maturity of the obligations; and the rating of the issue.
The ability of the Fund to achieve its investment objective also depends
on the continuing ability of the issuers of municipal securities and
participation interests, or the guarantors of either, to meet their
obligations for the payment of interest and principal when due.

VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term corporate
or municipal debt instruments that have variable or floating interest rates
and provide the Fund with the right to tender the security for repurchase at
its stated principal amount plus accrued interest. Such securities typically
bear interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals (ranging
from daily to annually), and is normally based on a published interest rate or
interest rate index. Most variable rate demand notes allow the Fund to demand
the repurchase of the security on not more than seven days prior notice. Other
notes only permit the Fund to tender the security at the time of each interest
rate adjustment or at other fixed intervals. See "Demand Features." The Fund
treats variable rate demand notes as maturing on the later of the date of the
next interest rate adjustment or the date on which the Fund may next tender
the security for repurchase.

SHORT-TERM CREDIT FACILITIES. The Fund may enter into, or acquire
participations in, short-term borrowing arrangements with corporations,
consisting of either a short-term revolving credit facility or a master note
agreement payable upon demand. Under these arrangements, the borrower may
request advances from the Fund and may repay and reborrow funds during the
term of the facility. The Fund treats any commitment to provide such advances
as a standby commitment to purchase the borrower's notes.

DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("Demand Features") to repurchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The Demand Feature may be issued by
the issuer of the underlying securities, a dealer in the securities or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership or default by the issuer of the Demand
Feature, or a default on the underlying security or other event that terminates
the Demand Feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand Features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.

REGULATORY COMPLIANCE. The Fund may follow non-fundamental operational
policies that are more restrictive than its fundamental investment
limitations, as set forth in this prospectus and its 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, as amended. In particular, the Fund will comply with the various
requirements of Rule 2a-7, which regulates money market mutual funds. For
example, with limited exceptions, Rule 2a-7 prohibits the investment of more
than 5% of the 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 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 NRSROs, 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.

In addition, the Fund may borrow money, lend portfolio securities, invest in
restricted and illiquid securities, repurchase agreements and variable amount
demand master notes and engage in when-issued and delayed delivery
transactions. See "Portfolio Investments and Strategies."

CONCENTRATION OF INVESTMENTS. The Fund may invest more than 25% of the value
of its total assets in cash or cash items, securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities, or instruments secured
by these money market instruments (i.e., repurchase agreements).

INVESTMENT LIMITATIONS. The Fund's investment limitations are discussed below
under "Borrowing Money," "Diversification," "Restricted and Illiquid
Securities," and "Investing in New Issuers."

U.S. TREASURY MONEY MARKET FUND

The investment objective of U.S. Treasury Money Market Fund is to provide
current income consistent with stability of principal and liquidity. The Fund
pursues its investment objective by investing its assets in U.S. Treasury
obligations which are issued by the U.S. government, and are fully guaranteed
as to payment of principal and interest by the United States.

ACCEPTABLE INVESTMENTS. The Fund invests only in U.S. Treasury obligations
maturing in 13 months or less and in repurchase agreements fully
collateralized by U.S. Treasury obligations. See "Repurchase Agreements." The
average maturity of the U.S. Treasury obligations in the Fund's portfolio,
computed on a dollar-weighted basis, will be 90 days or less.

In addition, the Fund may borrow money, lend portfolio securities and engage
in when-issued and delayed delivery transactions. See "Portfolio Investments
and Strategies."

INVESTMENT LIMITATIONS. The Fund's investment limitations are discussed below
under "Borrowing Money" and "Restricted and Illiquid Securities."

BOND FUND

The investment objective of Bond Fund is to achieve current income. The Fund
pursues its investment objective by investing in the bonds and other
instruments described below. Under normal market conditions, the Fund will (1)
attempt to maintain an average weighted portfolio maturity of between five and
ten years and (2) invest at least 65% of its assets in bonds.

ACCEPTABLE INVESTMENTS. The Fund invests primarily in a professionally
managed, diversified portfolio of investment grade securities which include:

. domestic issues of corporate debt obligations and U.S. dollar denominated
debt obligations of foreign corporations and governments rated Aaa, Aa, or
A by Moody's; AAA, AA, or A by S&P; or AAA, AA, or A by Fitch;

. obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities (see "Portfolio Investments and Strategies");

. commercial paper which matures in 270 days or less so long as at least
two ratings are high quality ratings by NRSROs. Such ratings would
include: A-1 by S&P, Prime-1 by Moody's, or F-1 by Fitch and, unrated but
deemed to be of comparable quality by the investment adviser, including
Canadian Commercial Paper ("CCPs") and Europaper;

. instruments of domestic and foreign banks and savings and loans as
described above under "Prime Money Market Fund--Acceptable Investments"
and "Bank Instruments"; and

. collateralized mortgage obligations.

While the Fund will only purchase corporate debt obligations that at the time
of purchase are rated in the top three ratings categories, in the event that
any such security is downgraded to the fourth highest ratings category, the
Fund may continue to hold such a security. Obligations rated in the lowest of
the top four ratings, such as Baa by Moody's or BBB by S&P or Fitch, have
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to weakened capacity to make principal
and interest payments than higher rated bonds. In the event that any such
security is downgraded by a ratings service below the fourth highest rating
category, the Fund will dispose of the security.

The prices of fixed-income securities fluctuate inversely to the direction of
interest rates.

In addition, the Fund may borrow money, lend portfolio securities, invest in
restricted and illiquid securities, repurchase agreements, securities of other
investment companies, and variable amount demand master notes and engage in
put and call options, futures and options on futures and when-issued and
delayed delivery transactions. See "Portfolio Investments and Strategies."

COLLATERALIZED MORTGAGE OBLIGATIONS. The Fund may invest in collateralized
mortgage obligations ("CMOs") which are rated A or better by an NRSRO and which
are issued by private entities such as investment banking firms and companies
related to the construction industry. The CMOs in which the Fund may invest may
be: (i) privately issued securities which are collateralized by pools of
mortgages in which each mortgage is guaranteed as to payment of principal and
interest by an agency or instrumentality of the U.S. government; (ii) privately
issued securities which are collateralized by pools of mortgages in which
payment of principal and interest are guaranteed by the issuer and such
guarantee is collateralized by U.S. government securities; and (iii) other
privately issued securities in which the proceeds of the issuance are invested
in mortgage-backed securities and payment of the principal and interest are
supported by the credit of an agency or instrumentality of the U.S. government.
The mortgage-related securities provide for a periodic payment consisting of
both interest and principal. The interest portion of these payments will be
distributed by the Fund as income, and the capital portion will be reinvested.

PARTICIPATION INTERESTS. The Fund may purchase participation interests from
financial institutions (such as commercial banks, savings and loan associations,
and insurance companies), or from single-purpose, stand-alone finance
subsidiaries or trusts of such institutions, or from other special purpose
entities. Single-purpose, stand-alone finance subsidiaries or trusts and special
purpose entities generally do not have any significant assets other than the
receivables securing the participation interests. Participation interests give
the Fund an undivided fractional ownership interest in debt obligations. The
debt obligations may include pools of credit card receivables, automobile
installment loan contracts, corporate loans or debt securities, corporate
receivables or other types of debt obligations. In addition to being supported
by the stream of payments generated by the debt obligations, payments of
principal and interest on the participation interests may be supported up to
certain amounts and for certain periods of time by irrevocable letters of
credit, insurance policies, and/or other credit agreements issued by financial
institutions unaffiliated with the issuers and by monies on deposit in certain
bank accounts of the issuer. Payments of interest on the participation interests
may also rely on payments made pursuant to interest rate swap agreements made
with other unaffiliated financial institutions.

The participation interests described above will be rated A or better by
Moody's or by S&P. The Fund may also invest in participation interests which
are not rated but are determined by the Board of Trustees to be of comparable
quality.

If the participation interests include the unconditional written right to
demand payment at par value plus accrued interest from the issuer, the Demand
Feature will be used in determining the maturity of the participation
interest. So long as the Demand Feature can require payment by the issuer
within seven days, the participation interest will not be deemed to be
illiquid. The secondary market, if any, for certain of these obligations may
be extremely limited and any such obligations purchased by the Fund will be
regarded as illiquid, unless they include the seven-day Demand Feature. Such
illiquid obligations will be included within the 15% limitation by the Fund on
investment of its net assets in illiquid securities.

PORTFOLIO TURNOVER. Although the Fund does not intend to invest for the purpose
of seeking short-term profits, securities in its portfolio will be sold whenever
the Fund's investment adviser believes it is appropriate to do so in light of
the Fund's investment objective, without regard to the length of time a
particular security may have been held. It is not anticipated that the portfolio
trading engaged in by the Fund will result in its annual rate of portfolio
turnover exceeding 400%. A portfolio turnover rate of 100% would occur, for
example, if all the securities in the Fund's portfolio were replaced once in a
period of one year. The Fund's rate of portfolio turnover may exceed that of
certain other mutual funds with the same investment objective. A higher rate of
portfolio turnover involves correspondingly greater transaction expenses which
must be borne directly by the Fund and, thus, indirectly by its shareholders. In
addition, a high rate of portfolio turnover may result in the realization of
larger amounts of capital gains which, when distributed to the Fund's
shareholders, are taxable to them. (Further information is contained in the
Trust's Statement of Additional Information within the sections "Brokerage
Transactions" and "Tax Status"). Nevertheless, transactions for the Fund's
portfolio will be based only upon investment considerations and will not be
limited by any other considerations when the Fund's investment adviser deems it
appropriate to make changes in the Fund's portfolio.

INVESTMENT LIMITATIONS. The Fund's investment limitations are discussed below
under "Borrowing Money," "Diversification," "Restricted and Illiquid
Securities," and "Investing in New Issuers."

STOCK FUND

The investment objective of Stock Fund is to provide growth of capital and
income. The Fund pursues its investment objective primarily through equity
investments, such as common stocks and securities convertible into common
stocks.

ACCEPTABLE INVESTMENTS. The securities in which the Fund invests include, but
are not limited to:

. common stocks and securities convertible into common stocks which will be
primarily composed of issues of high quality large capitalization domestic
companies. Under normal market conditions, at least 65% of the Fund's
portfolio will be invested in stocks. These will generally be readily
recognizable companies whose earnings and dividends are growing at above
average rates;

. preferred stocks, corporate bonds, notes, warrants, and rights;

. American Depositary Receipts ("ADRs"), which are receipts typically
issued by an American bank or trust company that evidences ownership of
underlying securities issued by a foreign issuer. ADRs may not necessarily
be denominated in the same currency as the securities into which they may
be converted. Generally, ADRs, in registered form, are designed for use in
U.S. securities markets. The Fund may invest up to 20% of its net assets
in ADRs;

. commercial paper rated A-1 by S&P, Prime-1 by Moody's, or F-1 by Fitch
and money market instruments (including commercial paper) which are
unrated but deemed to be of comparable quality by the investment adviser,
including CCP and Europaper;

. instruments of domestic and foreign banks and savings and loans as
described above under "Prime Money Market Fund--Acceptable Investments"
and "Bank Instruments"; and

. securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, including those obligations purchased on a when-issued
or delayed delivery basis. See "Portfolio Investments and Strategies."

In selecting investments for the Fund, the investment adviser follows a value-
based, disciplined investment philosophy. Using a computer model and hands-on
fundamental analysis, stocks are selected based on such factors as low
price/earnings ratios relative to earnings growth and history; rising earnings
estimates; relative price strength; high or improving earnings; and credit
quality.

Computer screens based upon value criteria are applied to a listing of 750
stocks to rank them according to relative attractiveness. These rankings are
refined by additional screens focusing on earnings growth and relative price
strength. This computer model is complemented with the adviser's fundamental
analysis to produce lists of especially attractive issues.

The relative price action of each stock is monitored, and price momentum is
followed to determine when the value of a security is beginning to be
recognized by the market.

CONVERTIBLE SECURITIES. Convertible securities are fixed-income securities
which may be exchanged or converted into a predetermined number of the
issuer's underlying common stock at the option of the holder during a
specified time period. Convertible securities may take the form of
convertible bonds, convertible preferred stock or debentures, units
consisting of "usable" bonds and warrants or a combination of the features
of several of these securities. The investment characteristics of each
convertible security vary widely, which allows convertible securities to
be employed for different investment objectives.

Convertible bonds and convertible preferred stocks are fixed-income securities
that generally retain the investment characteristics of fixed- income
securities until they have been converted but also react to movements in the
underlying equity securities. The prices of fixed-income securities fluctuate
inversely to the direction of interest rates. The holder is entitled to
receive the fixed income of a bond or the dividend preference of a preferred
stock until the holder elects to exercise the conversion privilege. Usable
bonds are corporate bonds that can be used in whole or in part, customarily
at full face value, in lieu of cash to purchase the issuer's common stock.
When owned as part of a unit along with warrants, which entitle the holder
to buy the common stock, they function as convertible bonds, except that the
warrants generally will expire before the bond's maturity. Convertible
securities are senior to equity securities, and therefore have a claim to
assets of the corporation prior to the holders of common stock in the case of
liquidation. However, convertible securities are generally subordinated to
similar nonconvertible securities of the same company. The interest income
and dividends from convertible bonds and preferred stocks provide a stable
stream of income with generally higher yields than common stocks, but lower
than non-convertible securities of similar quality. The Fund will exchange
or convert the convertible securities held in its portfolio into shares of
the underlying common stocks when, in the investment adviser's opinion, the
investment characteristics of the underlying common shares will assist the
Fund in achieving its investment objective. Otherwise, the Fund will hold or
trade the convertible securities. In selecting convertible securities for
the Fund, the Fund's adviser evaluates the investment characteristics of the
convertible security as a fixed income instrument, and the investment
potential of the underlying equity security for capital appreciation. In
evaluating these matters with respect to a particular convertible security,
the Fund's adviser considers numerous factors, including the economic and
political outlook, the value of the security relative to other investment
alternatives, trends in the determinants of the issuer's profits, and the
issuer's management capability and practices.

PORTFOLIO TURNOVER. Although the Fund does not intend to invest for the
purpose of seeking short-term profits, securities in its portfolio will be
sold whenever the Fund's investment adviser believes it is appropriate to do
so in light of the Fund's investment objective, without regard to the length
of time a particular security may have been held. It is not anticipated that
the portfolio trading engaged in by the Fund will result in its annual rate of
portfolio turnover exceeding 200%. A portfolio turnover rate of 100% would
occur, for example, if all the securities in the Fund's portfolio were
replaced once in a period of one year. The Fund's rate of portfolio turnover
may exceed that of certain other mutual funds with the same investment
objective. A higher rate of portfolio turnover involves correspondingly
greater brokerage commissions and other expenses which must be borne directly
by the Fund and, thus, indirectly by its shareholders. In addition, a high
rate of portfolio turnover may result in the realization of larger amounts of
capital gains which, when distributed to the Fund's shareholders, are taxable
to them. Nevertheless, transactions for the Fund's portfolio will be based
only upon investment considerations and will not be limited by any other
considerations when the Fund's investment adviser deems it appropriate to make
changes in the Fund's portfolio.

INVESTMENT LIMITATIONS. The Fund's investment limitations are discussed below
under "Borrowing Money," "Diversification," "Restricted and Illiquid
Securities," and "Investing in New Issuers."

PORTFOLIO INVESTMENTS AND STRATEGIES
- -------------------------------------------------------------------------------

BORROWING MONEY

The Funds will not borrow money directly or through reverse repurchase
agreements (arrangements in which a Fund sells a money market instrument for a
percentage of its cash value with an agreement to buy it back on a set date)
or pledge securities except, under certain circumstances, a Fund may borrow
money up to one-third of the value of its total assets and pledge up to 10%
(in the case of Prime Money Market Fund and U.S. Treasury Money Market Fund)
or 15% (in the case of Bond Fund and Stock Fund) of the value of those assets
to secure such borrowings. This policy cannot be changed without the approval
of holders of a majority of a Fund's shares.

DIVERSIFICATION

With respect to 75% of the value of total assets, Prime Money Market Fund,
Bond Fund and Stock Fund will not invest more than 5% in securities of any one
issuer other than cash, cash items or securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities and
repurchase agreements collateralized by U.S. government securities. The Funds
will not acquire more than 10% of the outstanding voting securities of any one
issuer. This policy cannot be changed without the approval of holders of a
majority of a Fund's shares.

RESTRICTED AND ILLIQUID SECURITIES

Prime Money Market Fund, Bond Fund and Stock Fund may invest in restricted
securities. Restricted securities are any securities in which a Fund may invest
pursuant to its investment objective and policies but which are subject to
restriction on resale under federal securities law. The Bond Fund and Stock Fund
will limit investments in illiquid securities (including certain 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 their net assets. The
Prime Money Market Fund will limit investments in illiquid securities to 10% of
its net assets.

A Fund may invest in commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933. Section
4(2) commercial paper is restricted as to disposition under federal securities
law, and is generally sold to institutional investors, such as one of these
Funds, who agree that they are purchasing the paper for investment purposes and
not with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) commercial paper is normally resold to
other institutional investors through or with the assistance of the issuer or
investment dealers who make a market in Section 4(2) commercial paper, thus
providing liquidity. The Funds believe that Section 4(2) commercial paper and
certain other restricted securities, which meet the criteria for liquidity
established by the Trustees, are quite liquid. Therefore, the Funds intend to
treat these securities as liquid and not subject to the investment limitation
applicable to illiquid securities. In addition, because these securities are
liquid, the Funds will not subject such securities to the limitation otherwise
applicable to restricted securities.

INVESTING IN NEW ISSUERS

The Funds will not invest more than 5% of their total assets in securities of
issuers that have records of less than three years of continuous operations,
including the operation of any predecessor.

REPURCHASE AGREEMENTS

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

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

Each Fund may purchase securities on a when-issued or delayed delivery basis.
In when-issued and delayed delivery transactions, a Fund relies on the seller
to complete the transaction. The seller's failure to complete the transaction
may cause a Fund to miss a price or yield considered to be advantageous.

LENDING OF PORTFOLIO SECURITIES

In order to generate additional income, each Fund may lend portfolio securities
on a short-term or long-term basis, or both, up to one-third of the value of
its total assets to broker/dealers, banks, or other institutional borrowers of
securities. A Fund will only enter into loan arrangements with broker/dealers,
banks, or other institutions which the investment adviser has determined are
creditworthy under guidelines established by the Trustees and will receive
collateral in the form of cash or U.S. government securities equal to at least
100% of the value of the securities loaned. This policy cannot be changed
without the approval of holders of a majority of a Fund's shares.

U.S. GOVERNMENT SECURITIES

The U.S. government securities in which Prime Money Market Fund, Bond Fund and
Stock Fund may invest include: direct obligations of the U.S. Treasury (such as
Treasury bills, notes and bonds), and obligations issued by U.S. government
agencies or instrumentalities, including securities that are supported by the
full faith and credit of the United States (such as Government National
Mortgage Association certificates); securities that are supported by the right
of the issuer to borrow from the U.S. Treasury (such as securities of Federal
Home Loan Banks); and securities that are supported by the credit of the
instrumentality (such as Federal National Mortgage Association and Federal Home
Loan Mortgage Corporation bonds).

PUT AND CALL OPTIONS

Bond Fund and Stock Fund may purchase put options on portfolio securities.
These options will be used as a hedge to attempt to protect securities which a
Fund holds against decreases in value. These Funds may also write covered call
options on all or any portion of their portfolio to generate income. A Fund
will write call options on securities either held in its portfolio, or which it
has the right to obtain without payment of further consideration, or for which
it has segregated cash or U.S. government securities in the amount of any
additional consideration.

A Fund may purchase and write over-the-counter options on portfolio securities
in negotiated transactions with the buyers or writers of the options when
options on the portfolio securities held by a Fund are not traded on an
exchange. A Fund purchases and writes options only with investment dealers
and other financial institutions (such as commercial banks or savings and loan
associations) deemed creditworthy by the investment adviser.

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. A Fund will
not buy call options or write put options, other than to close out open option
positions, without further notification to shareholders.

FUTURES AND OPTIONS ON FUTURES

Bond Fund and Stock Fund may purchase and sell futures contracts to hedge
against the effects of changes in the value of portfolio securities due to
anticipated changes in interest rates and market conditions. Futures contracts
call for the delivery of particular debt instruments at a certain time in the
future. The seller of the contract agrees to make delivery of the type of
instrument called for in the contract and the buyer agrees to take delivery of
the instrument at the specified future time.

Stock index futures contracts are based on indexes that reflect the market
value of common stock of the firms included in the indexes. An index futures
contract is an agreement pursuant to which two parties agree to take or make
delivery of an amount of cash equal to the differences between the value of the
index at the close of the last trading day of the contract and the price at
which the index contract was originally written.

Bond Fund and Stock Fund may also write call options and purchase put options
on futures contracts as a hedge to attempt to protect their portfolio
securities against decreases in value. When a Fund writes a call option on a
futures contract, it is undertaking the obligation of selling a futures
contract at a fixed price at any time during a specified period if the option
is exercised. Conversely, as purchaser of a put option on a futures contract, a
Fund is entitled (but not obligated) to sell a futures contract at the fixed
price during the life of the option.

Bond Fund and Stock Fund may not purchase or sell futures contracts or related
options if immediately thereafter the sum of the amount of margin deposits on a
Fund's existing futures positions and premiums paid for related options would
exceed 5% of the market value of a Fund's total assets. When 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 custodian (or the
broker, if legally permitted) to collateralize the position and thereby insure
that the use of such futures contracts are unleveraged. When a 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.

RISKS. When a 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 in that
Fund's portfolio. This may cause the futures contract and any related options
to react differently than the portfolio securities to market changes. In
addition, the investment adviser could be incorrect in its expectations about
the direction or extent of market factors such as stock price movements. In
these events, a Fund may lose money on the futures contract or option.

It is not certain that a secondary market for positions in futures contracts or
for options will exist at all times. Although the investment adviser will
consider liquidity before entering into these transactions, there is no
assurance that a liquid secondary market on an exchange or otherwise will exist
for any particular futures contract or option at any particular time. A Fund's
ability to establish and close out futures and options positions depends on
this secondary market.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Funds may invest in the securities of other investment companies, but will
not own more than 3% of the total outstanding voting stock of any investment
company, invest more than 5% of total assets in any one investment company, or
invest more than 10% of total assets in investment companies in general. Prime
Money Market Fund and U.S. Treasury Money Market Fund may only invest in the
securities of other investment companies that are money market funds having
investment objectives and policies similar to their own. The Funds will invest
in other investment companies primarily for the purpose of investing short-term
cash which has not yet been invested in other portfolio instruments. The
adviser will waive its investment advisory fee on assets invested in securities
of open-end investment companies. These limitations are not applicable if the
securities are acquired in a merger, consolidation, reorganization, or
acquisition of assets.

DEMAND MASTER NOTES

Prime Money Market Fund, Bond Fund and Stock Fund may invest in variable amount
demand master notes. Demand notes are short-term borrowing arrangements between
a corporation or government agency and an institutional lender (such as a Fund)
payable upon demand by either party. The notice period for demand typically
ranges from one to seven days, and the party may demand full or partial payment.
Many master notes give a Fund the option of increasing or decreasing the
principal amount of the master note on a daily or weekly basis within certain
limits. Demand master notes usually provide for floating or variable rates of
interest.

FOREIGN INVESTMENTS

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

TEMPORARY INVESTMENTS

Bond Fund and Stock Fund may invest temporarily in cash and cash items during
times of unusual market conditions for defensive purposes and to maintain
liquidity. Cash items may include short-term obligations such as obligations
of the U.S. government or its agencies or instrumentalities and repurchase
agreements.

RIMCO MONUMENT FUNDS INFORMATION
- -------------------------------------------------------------------------------

MANAGEMENT OF RIMCO MONUMENT FUNDS

BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees (the
"Trustees"). The Trustees are responsible for managing the business affairs of
the Trust and for exercising all of the powers of the Trust except those
reserved for the shareholders. The Executive Committee of the Board of
Trustees handles the Trustees' responsibilities between meetings of the Board.

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

ADVISORY FEES. The Adviser receives an annual investment advisory fee at
annual rates equal to percentages of the relevant Fund's average net assets
as follows: Prime Money Market Fund and U.S. Treasury Money Market Fund--.50%
and Bond Fund and Stock Fund--.75%. The investment advisory contract
provides for the voluntary waiver of expenses by the Adviser from time to
time. The Adviser can terminate this voluntary waiver of expenses at any time
with respect to a Fund at its sole discretion. The Adviser has also
undertaken to reimburse the Funds for operating expenses in excess of
limitations established by certain states.

ADVISER'S BACKGROUND. RIMCO is a subsidiary of The Riggs National Bank of
Washington D.C. ("Riggs National Bank"), which is a subsidiary of Riggs
National Corporation, a bank holding company. RIMCO has advised the RIMCO
Monument Funds since September 1991, and as of April 30, 1994, provides
investment advice for assets totalling $2.5 billion. RIMCO has a varied
client base of over 30 other relationships including corporate, union and
public pension plans, foundations, endowments and associations. As part of
its regular banking operations, Riggs National Bank may make loans to public
companies. Thus, it may be possible, from time to time, for a Fund to hold or
acquire the securities of issuers which are also lending clients of Riggs
National Bank. The lending relationship will not be a factor in the selection
of securities.

Robert A. von Pentz is Chairman and Executive Director of RIMCO with overall
responsibility for all investment advisory activities, and is a member of the
Management Committee. Prior to joining RIMCO in 1989, Mr. von Pentz served as
Vice President and Director of Equity Research for ASB Capital Management,
Washington, DC, and as Vice President and Director of Research for the
Maryland National Bank. He started his career as an Equity Analyst for the
First American Bank in Washington. Mr. von Pentz has spent most of his career
designing and implementing quantitative investment techniques. Mr. von Pentz
earned a B.A. in Economics and an M.B.A. in Finance from the University of
New Mexico. He holds a C.F.A. from the Institute of Chartered Financial
Analysts. Mr. von Pentz assumed responsibility for the Stock Fund in June,
1994.

Roger W. Marshall is President and Managing Director of RIMCO and is a
member of the senior management committee. He has responsibility for fixed
income strategy and management. Prior to joining RIMCO in 1988, Mr. Marshall
had responsibility for fixed income research and portfolio management for
American and European Investment Corporation, Bethesda, Maryland. He also
held positions in research and strategic planning for Smith Barney and the
American Stock Exchange. He spent the first five years of his career doing
economic research for the Securities and Exchange Commission. Mr. Marshall
earned B.A. and M.A. degrees in Economics from the State University of New
York at Binghamton. Mr. Marshall has managed the Bond Fund since its
inception in 1992.

DISTRIBUTION OF SHARES OF THE FUNDS

Federated Securities Corp. is the principal distributor for shares of the
Funds. It is a Pennsylvania corporation organized on November 14, 1969, and is
the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.

ADMINISTRATION OF THE FUNDS

ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides the Funds with certain administrative personnel
and services necessary to operate each Fund.

Such services include shareholder servicing and certain legal and accounting
services. Federated Administrative Services provides these at an annual rate
as specified below:

<TABLE>
<CAPTION>
Maximum Average Aggregate Daily Net
Administrative Fee Assets of the Trust
------------------ ---------------------------
<S> <C>
.150 of 1% on the first $250 million
.125 of 1% on the next $250 million
.100 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>

The administrative fee received during any fiscal year shall be at least
$50,000 per Fund. Federated Administrative Services may voluntarily reimburse
a portion of its fee.

CUSTODIAN. Riggs National Bank, Washington, D.C., is custodian for the
securities and cash of the Funds. Under the Custodian Agreement, Riggs
National Bank holds the Funds' portfolio securities in safekeeping and keeps
all necessary records and documents relating to its duties.

TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO ACCOUNTING SERVICES.
Federated Services Company, Pittsburgh, Pennsylvania, a subsidiary of Federated
Invest- ors, is transfer agent for the shares of the Funds and dividend
disbursing agent for the Funds. Federated Services Company also provides certain
account- ing and recordkeeping services with respect to the portfolio
investments of the Funds.

LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.

INDEPENDENT AUDITORS. The independent auditors for the Funds are Ernst &
Young, Pittsburgh, Pennsylvania.

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

With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund,
each Fund attempts to stabilize the net asset value of its shares at $1.00 by
valuing its portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting total liabilities from
total assets and dividing the remainder by the number of shares outstanding.
Of course, Prime Money Market Fund and U.S. Treasury Money Market Fund cannot
guarantee that their net asset value will always remain at $1.00 per share.

With respect to Bond Fund and Stock Fund, net asset value per share fluctuates
and is determined by dividing the sum of the market value of all securities
and other assets, less liabilities, by the number of shares outstanding.

INVESTING IN THE FUNDS
- -------------------------------------------------------------------------------

SHARE PURCHASES

Shares of the Funds are sold on days on which the New York Stock
Exchange and the Federal Reserve Wire system are open for business except on
Martin Luther King Day, Columbus Day and Veterans' Day. Shares of the Funds may
be purchased through Riggs National Bank and its affiliate banks or through
authorized broker/dealers. In connection with the sale of shares of the Funds,
the distributor may from time to time offer certain items of nominal value to
any shareholder or investor. The Funds reserve the right to reject any purchase
request.

THROUGH RIGGS NATIONAL BANK. An investor may write to or call Riggs National
Bank to place an order to purchase shares of a Fund. (Call 202-835-4280, or
outside the Washington, D.C. metropolitan area call toll-free 1-800-934-3883.)
Representatives are available from 8:00 a.m. to 5:00 p.m. (Washington, D.C.
time). Payment may be made either by mail or federal funds or by debiting a
customer's account at Riggs National Bank. With respect to Prime Money Market
Fund and U.S. Treasury Money Market Fund, purchase orders must be received by
Riggs National Bank before 11:00 a.m. (Washington, D.C. time). Payment is
normally required on the same business day. With respect to Bond Fund and
Stock Fund, purchase orders must be received by Riggs National Bank before
4:00 p.m. (Washington, D. C. time). Payment is normally required on the next
business day. Texas residents should purchase shares through Federated
Securities Corp. at 1-800-356-2805.

Payment for shares of a Fund may be made by check or by wire.

BY MAIL. To purchase shares of a Fund by mail, send a check made payable
to "RIMCO Monument Funds" (and identify the appropriate Fund) to The Riggs
National Bank of Washington, D.C., P.O. Box 96656, Washington, D.C. 20090-
6656. Orders by mail are considered received after payment by check is
converted by Riggs National Bank into federal funds. This is normally the
next business day after Riggs National Bank receives the check.

BY WIRE. To purchase shares of a Fund by wire, call 202-835-4280 (or
outside the Washington, D.C. metropolitan area call toll-free 1-800-934-
3883).

With respect to Prime Money Market Fund and U.S. Treasury Money Market
Fund, payment by wire must be received by Riggs National Bank before 12:30
p.m. (Washington, D.C. time) on the same day as the order is placed to
earn dividends for that day. With respect to Bond Fund and Stock Fund,
payment by wire must be received by Riggs National Bank before 3.00 p.m.
(Washington, D.C. time) on the next business day after placing the order.
Shares of the Funds cannot be purchased by Federal Reserve Wire on
Columbus Day, Veterans' Day or Martin Luther King Day.

THROUGH AUTHORIZED BROKER/DEALERS. An investor may place an order through
authorized brokers and dealers to purchase shares of a Fund. Shares will
be purchased at the public offering price next determined after the Fund
receives the purchase request from Riggs National Bank. Purchase requests
through authorized brokers and dealers must be received by Riggs National
Bank and transmitted to the Fund before 3:00 p.m. (Washington, D.C. time)
in order for shares to be purchased at that day's public offering price.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in each Fund is $2,500, except for an
Individual Retirement Account ("IRA") which requires a minimum initial
investment of $500. Subsequent investments must be in amounts of at least
$100, except for an IRA, which must be in amounts of at least $50.

The minimum investment required may be waived for purchases by employees or
retirees of the Riggs National Corporation and/or its subsidiaries, employees
of Independent Financial Marketing Group, and their spouses and children under
the age of 21.

WHAT SHARES COST

Shares of the Prime Money Market Fund and the U.S. Treasury Money Market Fund
are sold at their net asset value next determined after an order is received.
There is no sales charge imposed by these Funds.

Shares of the Bond Fund and Stock Fund are sold at their public offering price
based on their net asset value per share next determined after an order is
received, plus a sales charge as follows:

<TABLE>
<S> <C> <C>
Sales Charge as a Sales Charge as a
Amount of Transaction Percentage of Public Percentage of Net
- --------------------- Offering Price Amount Invested
-------------------- -----------------
Less than $50,000........................ 3.50% 3.63%
$50,000 but less than $100,000........... 3.00% 3.09%
$100,000 but less than $500,000.......... 2.50% 2.56%
$500,000 but less than $1 million........ 1.00% 1.01%
$1 million or more....................... .00% .00%
</TABLE>

On Monday through Friday, Prime Money Market Fund and U.S. Treasury Money
Market Fund calculate net asset value at 12:00 noon (Washington, D.C. time)
and 4:00 p.m. (Washington, D.C. time), while Bond Fund and Stock Fund
calculate net asset value at the close of trading on the New York Stock
Exchange, currently 4:00 p.m. (Washington, D.C. time), except on: (i) days on
which there are not sufficient changes in the value of a Fund's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no shares of a Fund are tendered for redemption and no orders to
purchase shares are received; and (iii) on the following holidays; New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

PURCHASES AT NET ASSET VALUE. Shares of the Bond Fund and Stock Fund may be
purchased at net asset value, without a sales charge: by or through the Trust
Division or the Private Banking Division of Riggs National Bank for funds
which are held in a fiduciary, agency, custodial, or similar capacity; by
Private Banking Customers of Riggs National Bank; by directors, employees, and
retired employees of the Funds, Riggs National Corporation and/or its
subsidiaries, or Federated Securities Corp. or their affiliates, and their
spouses and children under the age of 21; by any bank or investment dealer who
has a sales agreement with Federated Securities Corp. with regard to the Bond
Fund and Stock Fund; or by anyone purchasing Shares with funds distributed by
a qualified plan currently held in custody by Riggs National Bank. A Fund's
sales charge will not be charged to a registered investment advisor (RIA)
purchasing for its discretionary accounts, provided a RIA load waiver
agreement, which specifies certain aggregate minimum and operating provisions,
is executed. This waiver is available only for shares purchased directly,
without a broker, and is unavailable if the RIA is part of an organization
principally engaged in the brokerage business.

PURCHASES WITH PROCEEDS FROM REDEMPTIONS OF UNAFFILIATED MUTUAL FUND SHARES.
Investors may purchase shares of the Bond and Stock Funds at net asset value,
without a sales charge, with the proceeds from the redemption of shares of a
mutual fund which was sold with a sales charge or commission. The purchase must
be made within 60 days of the redemption, and the distributor must be notified
by the investor in writing, or by his financial institution, at the time the
purchase is made. This offer is not available for the redemption of mutual fund
shares that were or would be subject to a contingent deferred sales charge upon
redemption.

DEALER CONCESSION. A dealer or Riggs National Bank will normally receive up to
85% of the applicable sales charge on the Bond Fund and Stock Fund. Any portion
of the sales charge which is not paid to Riggs National Bank or a dealer will
be retained by the distributor. However, the distributor, at its sole
discretion, may uniformly offer to pay to Riggs National Bank or a dealer
selling shares of the Funds all or a portion of the sales charge it normally
retains. If accepted by Riggs National Bank or a dealer, such additional
payments will be predicated upon the amount of Fund shares sold. Such payments
may take the form of cash or promotional incentives, such as payment of certain
expenses of qualified employees and their spouses to attend informational
meetings about the Funds or other special events at recreational facilities, or
items of material value. In some instances, these incentives will be made
available only to dealers whose employees have sold or may sell significant
amounts of shares.

OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor, the Adviser, or
their affiliates may also offer to pay a fee from their own assets to financial
institutions as financial assistance for providing substantial marketing and
sales support. The support may include initiating customer accounts, providing
sales literature, or participating in sales, educational and training seminars
(including those held at recreational facilities). Such assistance will be
predicated upon the amount of shares the financial institution sells or may
sell and/or upon the type and nature of sales or marketing support furnished by
the financial institution. Any payments made by the distributor may be
reimbursed by the Adviser or its affiliates.

REDUCING THE SALES CHARGE. The sales charge can be reduced through:

. quantity discounts and accumulated purchases;

. signing a 13-month letter of intent;

. using the reinvestment privilege; or

. concurrent purchases.

QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the table above,
larger purchases of the Bond Fund and Stock Fund reduce the sales charge paid.
The distributor will combine purchases made on the same day by the investor,
his spouse, and his children under age 21 when it calculates the sales charge.
In addition, the sales charge, if applicable, is reduced for purchases made at
one time by a trustee or fiduciary for a single trust estate or a single
fiduciary account.

If an additional purchase of shares in the Bond Fund or Stock Fund is made, the
distributor will aggregate such additional purchases with previous purchases of
shares of the Bond Fund or Stock Fund
provided the prior purchase is still invested in either of these Funds. For
example, if a shareholder already owns shares having a current value at the
public offering price of $40,000 and he purchases $10,000 more at the current
public offering price, the sales charge on the additional purchase according to
the schedule now in effect would be 3.00%, not 3.50%.

To receive the sales charge reduction, the distributor or Riggs National Bank
must be notified by the investor in writing at the time the purchase is made
that shares of either the Bond Fund or Stock Fund have been purchased and are
still invested or that such purchases are being combined. The distributor will
reduce the sales charge after it confirms the purchase.

LETTER OF INTENT. If a shareholder intends to purchase at least $50,000 of
shares in the Bond Fund or Stock Fund over the next 13 months, the sales
charge may be reduced by signing a letter of intent to that effect. This
letter of intent includes a provision for a sales charge adjustment depending
on the amount actually purchased within the 13-month period and a provision
for the Fund's custodian to hold up to 3.5% of the total amount intended to be
purchased in escrow (in shares of that Fund) until such purchase is completed.

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

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

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

CONCURRENT PURCHASES. For purposes of qualifying for a sales charge reduction,
a shareholder has the privilege of combining concurrent purchases in the Bond
Fund and the Stock Fund, the purchase price of which includes a sales charge.
For example, if a shareholder concurrently invested $30,000 in the Bond Fund
and $20,000 in the Stock Fund, the sales charge would be reduced.

To receive this sales charge reduction, the distributor or Riggs National Bank
must be notified in writing by the shareholder or by his financial institution
at the time the concurrent purchases are made. The distributor will reduce the
sales charge after it confirms the purchase.

SYSTEMATIC INVESTMENT PROGRAM

Once a Fund account has been opened, shareholders may add to their investment
on a regular basis in a minimum amount of $50. Under this program, funds may
be automatically withdrawn on a periodic schedule from the shareholder's
checking or savings account and invested in Fund shares at the net asset value
next determined after an order is received plus the applicable sales charge. A
shareholder may apply for participation in this program through Riggs National
Bank or an authorized broker or dealer.

RETIREMENT PLANS

Shares of the Funds can be purchased as an investment for retirement plans or
for IRA accounts. For further details, including prototype retirement plans,
contact Riggs National Bank and consult a tax adviser.

CERTIFICATES AND CONFIRMATIONS

As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder of record. Share certificates are not issued
unless requested by contacting Riggs National Bank in writing.

With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund,
shareholders will receive monthly statements showing all account activity for
the statement period which will serve as the confirmation of all reported
account activity. With respect to Bond Fund and Stock Fund, detailed
confirmations of each purchase or redemption are sent to each shareholder. In
addition, shareholders will receive monthly statements showing all account
activity for the statement period.

DIVIDENDS

With respect to Prime Money Market Fund, U.S. Treasury Money Market Fund, and
Bond Fund, dividends are declared daily and paid monthly. Unless shareholders
request cash payments by so indicating on the account application or by writing
to one of these Funds, dividends are automatically reinvested in additional
shares of the respective Fund on payment dates at net asset value on the ex-
dividend date without a sales charge.

With respect to Stock Fund, dividends are declared and paid quarterly. Unless
cash payments are requested by shareholders in writing to the Fund or by
indication on the account application, dividends are automatically reinvested
in additional shares of the Fund on payment dates at the ex-dividend date net
asset value without a sales charge.

CAPITAL GAINS

Capital gains realized by a Fund, if any, will be distributed at least once
every 12 months.

EXCHANGES
- --------------------------------------------------------------------------------

A shareholder may exchange shares of one Fund for shares of any of the other
Funds in the Trust by calling 202-835-4280 (or outside the Washington, D.C.
metropolitan area call 1-800-934-3883) or by writing to Riggs National Bank.
Shares purchased by check are eligible for exchange after seven days.

Orders to exchange shares of one Fund for shares of any of the other Funds will
be executed by redeeming the shares owned and purchasing shares of any of the
other Funds at the net asset value determined after the exchange request is
received. Orders for exchanges received by a Fund prior to 4:00 p.m.
(Washington, D.C. time) on any day that Fund is open for business will be
executed as of the close of business that day. Orders for exchanges received
after 4:00 p.m. (Washington, D.C. time) on any business day will be executed at
the close of the next business day.

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

When exchanging into and out of load and no load shares of the Funds in the
Trust, shareholders who have paid a sales load once upon purchasing shares of
any Fund, including those shares obtained through the reinvestment of
dividends, will not have to pay a sales load again on an exchange.

An excessive number of exchanges may be disadvantageous to the Trust.
Therefore, the Trust, in addition to its right to reject any exchange, reserves
the right to modify or terminate the exchange privilege at any time.
Shareholders would be notified prior to any modification or termination.

An exchange order must comply with the requirements for a redemption and must
specify the dollar value or number of shares to be exchanged. Exchanges are
subject to the minimum initial investment requirement of the Fund being
acquired. An exchange constitutes a sale for federal income tax purposes.

The exchange privilege is only available in states where shares of the Fund
being acquired may legally be sold.

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

Each Fund redeems shares at their net asset value next determined after Riggs
National Bank receives the redemption request.

Redemptions will be made on days on which a Fund computes its net asset value.
Telephone or written requests for redemption must be received in proper form by
Riggs National Bank.

BY TELEPHONE. A shareholder may redeem shares of a Fund by calling Riggs
National Bank to request the redemption. (Call 202-835-4280 or outside the
Washington, D.C. metropolitan area call 1-800-934-3883.) Shares will be
redeemed at the net asset value next determined after a Fund receives the
redemption request from Riggs National Bank. Although Riggs National Bank does
not charge for telephone redemptions, it reserves the right to charge a fee for
the cost of wire-transferred redemptions of less than $5,000, or in excess of
one per month.

With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund,
redemption requests received before 11:00 a.m. (Washington, D.C. time) will be
wired the same day, but will not be entitled to that day's dividend. Riggs
National Bank is responsible for promptly submitting redemption requests and
providing proper written redemption instructions to a Fund. If, at any time, a
Fund should determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.

With respect to Bond Fund and Stock Fund, a redemption request must be received
by Riggs National Bank before 4:00 p.m. (Washington D.C. time) in order for
shares to be redeemed at that day's net asset value.

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

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

BY MAIL. Shareholders may redeem shares of a Fund by sending a written request
to The Riggs National Bank of Washington, D.C., P.O. Box 96656, Washington,
D.C. 20090-6656. The written request should include the shareholder's name,
the Fund name, the account number, and the share or dollar
amount requested, and should be signed by each registered owner exactly as the
shares are registered. If share certificates have been issued, they must be
properly endorsed and should be sent by registered or certified mail with the
written request to Riggs National Bank.

Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with a Fund, or a
redemption payable other than to the shareholder of record must have
signatures on written redemption requests guaranteed by:

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

. a member of the New York, American, Midwest, or Pacific Stock Exchange;

. a savings bank or savings and loan association whose deposits are
insured by SAIF, which is administered by the FDIC; or

. any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.

The Funds do not accept signatures guaranteed by a notary public.

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

Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request. Upon shareholder request, the proceeds may be
credited to an account at Riggs National Bank.

REDEMPTION IN KIND

The Trust is obligated to redeem shares solely in cash up to $250,000 or 1% of
any Fund's net asset value, whichever is less, for any one shareholder within
a 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 Trust will pay
all or a portion of the remainder of the redemption in portfolio instruments,
valued in the same way as net asset value is determined. 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 transaction costs.

SYSTEMATIC WITHDRAWAL PROGRAM

Shareholders who desire to receive payments of a predetermined amount may take
advantage of the Systematic Withdrawal Program. Once a Fund account has been
opened, shareholders may withdraw from their investment on a regular basis in a
minimum amount of $50. Under this program, Fund shares are redeemed to provide
for periodic withdrawal payments in an amount directed by the shareholder.
Depending upon the amount of the withdrawal payments, the amount of dividends
paid and capital gains distributions with respect to Fund shares, and the
fluctuation of the net asset value of Fund shares redeemed under this program,
redemptions may reduce, and eventually deplete, the shareholder's investment in
the Fund. For this reason, payments under this program should not be considered
as yield or income on the shareholder's investment in the Fund. To be eligible
to participate in this program, a shareholder must have an account value of at
least $10,000. A shareholder may apply for participation in this program
through Riggs National Bank or an authorized broker or dealer. Due to the fact
that shares of the Bond and Stock Funds are sold with a sales charge, it is not
advisable for shareholders of these Funds to be purchasing shares while
participating in this program.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $1,000 due to
shareholder redemptions. Before shares are redeemed to close an account, the
shareholder is notified in writing and allowed 30 days to purchase additional
shares to meet the minimum requirement. The required minimum value may be
waived for employees or retirees of the Riggs National Corporation and/or its
subsidiaries, employees of Independent Financial Marketing Group, and their
spouses and children under 21.

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

VOTING RIGHTS

Each share of a Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each Fund in
the Trust have equal voting rights, except that in matters affecting only a
particular Fund only shareholders of that Fund are entitled to vote. As a
Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the operation of the Trust or a Fund and for the election of
Trustees under certain circumstances. As of June 14, 1994, Riggs National Bank
may for certain purposes be deemed to control the Funds because it is owner of
record of certain shares of the Funds.

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

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust. To
protect shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of shareholders for such acts or
obligations of the Trust. These documents require notice of this disclaimer to
be given in each agreement, obligation, or instrument the Trust or its Trustees
enter into or sign.

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

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

Banking laws and regulations presently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks
generally from issuing, underwriting, or distributing securities. However, such
banking laws and regulations do not prohibit such a holding company affiliate
or banks generally from acting as investment adviser, transfer agent or
custodian to such an investment company or from purchasing shares of such a
company as agent for and upon the order of such a customer. Riggs National Bank
is subject to such banking laws and regulations.

Riggs National Bank believes, based on the advice of its counsel, that RIMCO
may perform the services for any Fund contemplated by its advisory agreement
with the Trust without violation of the Glass-Steagall Act or other applicable
banking laws or regulations. Changes in either federal or state statutes and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of such or future statutes and regulations, could
prevent RIMCO from continuing to perform all or a part of the above services
for its customers and/or a Fund. If it were prohibited from engaging in these
customer-related activities, the Trustees would consider alternative advisers
and means of continuing available investment services. In such event, changes
in the operation of a Fund may occur, including possible termination of any
automatic or other Fund share investment and redemption services then being
provided by RIMCO. It is not expected that existing shareholders would suffer
any adverse financial consequences (if another adviser with equivalent
abilities to RIMCO is found) as a result of any of these occurrences.

State securities laws governing the ability of depository institutions to act
as underwriters or distributors of securities may differ from interpretations
given to the Glass-Steagall Act and, therefore, banks and financial
institutions may be required to register as dealers pursuant to state law.

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

FEDERAL INCOME TAX

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

Each Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by a Fund
will not be combined for tax purposes with those realized by any of the other
Funds.

Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares. Shareholders
are urged to consult their own tax advisers regarding the status of their
accounts under state and local tax laws.

ADDRESSES
- --------------------------------------------------------------------------------

RIMCO Monument Prime Money Market Fund
RIMCO Monument U.S. Treasury Money
Market Fund RIMCO Monument Bond Fund Federated Investors Tower
RIMCO Monument Stock Fund Pittsburgh, Pennsylvania 15222-3779

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

Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
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Investment Adviser
Riggs Investment Management Corp. 808 17th Street N.W.
Washington, D.C. 20006-3950
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Custodian
The Riggs National Bank of Washington, D.C. RIMCO Monument Funds 1120
Vermont Avenue N.W.
Washington, D.C. 20005-3598
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Transfer Agent, Dividend Disbursing Agent,
and Portfolio Accounting Services
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
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Legal Counsel
Houston, Houston & Donnelly 2150 Centre City Tower
Pittsburgh, Pennsylvania
15222
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Legal Counsel
2101 L Street N.W.
Dickstein, Shapiro & Morin, L.L.P. Washington, D.C. 20037
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Independent Auditors
Ernst & Young
One Oxford Centre
Pittsburgh, Pennsylvania
15219
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RIMCO MONUMENT FUNDS

COMBINED PROSPECTUS

An Open-End Management Investment
Company

June 30, 1994

RIMCO MONUMENT FUNDS
CONSISTS OF FOUR PORTFOLIOS:
. RIMCO MONUMENT PRIME MONEY MARKET FUND;
. RIMCO MONUMENT U.S. TREASURY MONEY MARKET FUND;
. RIMCO MONUMENT BOND FUND; AND
. RIMCO MONUMENT STOCK FUND.

STATEMENT OF ADDITIONAL INFORMATION

This combined Statement of Additional Information should be read with
the combined Prospectus of RIMCO Monument Funds (the "Trust") dated
June 30, 1994. This Statement is not a prospectus itself. To receive a
copy of the Prospectus, write or call the Trust.

FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779

Statement dated June 30, 1994

[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of FEDERATED INVESTORS

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

GENERAL INFORMATION ABOUT THE TRUST 1
- --------------------------------------

INVESTMENT OBJECTIVE AND POLICIES OF
THE FUNDS 1
- --------------------------------------

Repurchase Agreements 1
Reverse Repurchase Agreements 1
When-Issued and Delayed Delivery
Transactions 1
Lending of Portfolio Securities 1
U.S. Government Securities 2
Bank Instruments 2
Futures and Options Transactions 2
Futures Contracts 2
Put Options on Futures Contracts 3
Call Options on Futures Contracts 3
"Margin" in Futures Transactions 3
Purchasing Put Options on Portfolio
Securities 4
Writing Covered Call Options on
Portfolio Securities 4
Over-the-Counter Options 4
Collateralized Mortgage Obligations 4
Convertible Securities 4
Warrants 5
Portfolio Turnover 5
Investment Limitations 5

RIMCO MONUMENT FUNDS MANAGEMENT 7
- --------------------------------------

Officers and Trustees 7
The Funds 10
Fund Ownership 10
Trustee Liability 10

INVESTMENT ADVISORY SERVICES 10
- --------------------------------------

Adviser to the Trust 10
Advisory Fees 10

ADMINISTRATIVE SERVICES 11
- --------------------------------------

BROKERAGE TRANSACTIONS 12
- --------------------------------------

PURCHASING SHARES 12
- --------------------------------------

Conversion to Federal Funds 12

DETERMINING NET ASSET VALUE 12
- --------------------------------------

Determining Market Value of
Securities 12

Use of the Amortized Cost Method 13

REDEEMING SHARES 13
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Redemption in Kind 14

TAX STATUS 14
- --------------------------------------

The Funds' Tax Status 14
Shareholders' Tax Status 14
Capital Gains 14

TOTAL RETURN 14
- --------------------------------------

YIELD 14
- --------------------------------------

EFFECTIVE YIELD 15
- --------------------------------------

PERFORMANCE COMPARISONS 15
- --------------------------------------

FINANCIAL STATEMENTS 17
- --------------------------------------

APPENDIX 18
- --------------------------------------

GENERAL INFORMATION ABOUT THE TRUST
- --------------------------------------------------------------------------------

The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated April 1, 1991. As of the date of this Statement, the Trust
consists of four separate portfolios of securities (the "Funds") which are as
follows: RIMCO Monument Prime Money Market Fund ("Prime Money Market Fund"),
RIMCO Monument U.S. Treasury Money Market Fund ("U.S. Treasury Money Market
Fund"), RIMCO Monument Bond Fund ("Bond Fund"), and RIMCO Monument Stock Fund
("Stock Fund").

INVESTMENT OBJECTIVE AND POLICIES OF THE FUNDS
- --------------------------------------------------------------------------------

The Prospectus discusses the objective of each Fund and the policies it employs
to achieve those objectives. The following discussion supplements the
description of the Funds' investment policies in the Prospectus.

The Funds' respective investment objectives cannot be changed without approval
of shareholders. The investment policies described below may be changed by the
Board of Trustees (the "Trustees") without shareholder approval. Shareholders
will be notified before any material change in these policies becomes
effective.

REPURCHASE AGREEMENTS

The Funds or their custodian will take possession of the securities subject to
repurchase agreements and these securities will be marked to market daily. In
the event that a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by a Fund might be delayed pending court action.
The Funds believe that under the regular procedures normally in effect for
custody of a Fund's portfolio securities subject to repurchase agreements, a
court of competent jurisdiction would rule in favor of a Fund and allow
retention or disposition of such securities. The Funds 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
pursuant to guidelines established by the Trustees.

REVERSE REPURCHASE AGREEMENTS

The Funds may also enter into reverse repurchase agreements. These transactions
are similar to borrowing cash. In a reverse repurchase agreement a Fund
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agrees that on a stipulated date in the
future the Fund will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable a Fund to avoid selling portfolio instruments
at a time when a sale may be deemed to be disadvantageous, but the ability to
enter into reverse repurchase agreements does not ensure that a Fund will be
able to avoid selling portfolio instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of a 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 are maintained until the transaction is settled.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

The Funds may engage in when-issued and delayed delivery transactions. These
transactions are arrangements in which a Fund purchases securities with payment
and delivery scheduled for a future time. A Fund engages in when-issued and
delayed delivery transactions only for the purpose of acquiring portfolio
securities consistent with its investment objective and policies, not for
investment leverage. In when-issued and delayed delivery transactions, a Fund
relies on the seller to complete the transaction. The seller's failure to
complete the transaction may cause a Fund to miss a price or yield considered
to be advantageous.

These transactions are made to secure what is considered to be an advantageous
price or yield for a Fund. 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.

No fees or other expense, other than normal transaction costs, are incurred.
However, liquid assets of a Fund sufficient to make payment for the securities
to be purchased are segregated at the trade date. These securities are marked
to market daily and are maintained until the transaction is settled. As a
matter of policy, the Funds do not intend to engage in when-issued and delayed
delivery transactions to an extent that would cause the segregation of more
than 20% of the total value of their respective assets.

LENDING OF PORTFOLIO SECURITIES

The collateral received when a Fund lends portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the particular Fund. During the
time portfolio securities are on loan, the borrower pays a Fund any dividends or
interest paid on such securities. Loans are subject to termination at the option
of a Fund or the borrower. A Fund may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker.

A Fund would not have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if that were considered important with
respect to the investment.

U.S. GOVERNMENT SECURITIES

The types of U.S. government securities in which the Prime Money Market Fund,
Bond Fund and Stock Fund may invest generally include direct obligations of the
U.S. Treasury (such as U.S. Treasury bills, notes, and bonds) and obligations
issued or guaranteed by U.S. government agencies or instrumentalities. These
securities are backed by:

. the full faith and credit of the U.S. Treasury;

. the issuer's right to borrow from the U.S. Treasury;

. the discretionary authority of the U.S. government to purchase certain
obligations of the agency or instrumentality; or

. the credit of the agency or instrumentality issuing the obligations.

Examples of agencies and instrumentalities whose obligations are permissible
investments but may not always receive financial support from the U.S.
government are: Federal Land Banks; Central Bank for Cooperatives; Federal
Intermediate Credit Banks; Federal Home Loan Banks; Farmers Home
Administration; and Federal National Mortgage Association.

BANK INSTRUMENTS

Prime Money Market Fund, Bond Fund and Stock Fund may invest in the instruments
of banks and savings and loans whose deposits are insured by the Bank Insurance
Fund, which is administered by the Federal Deposit Insurance Corporation
("FDIC"), or the Savings Association Insurance Fund, which is administered by
the FDIC, such as certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances. These instruments are not necessarily
guaranteed by those organizations.

In addition, the Funds may invest in:

. Eurodollar Certificates of Deposit ("ECDs") issued by foreign branches of
U.S. or foreign banks;

. Eurodollar Time Deposits ("ETDs"), which are U.S. dollar-denominated deposits
in foreign branches of U.S. or foreign banks;

. Canadian Time Deposits, which are U.S. dollar-denominated deposits issued by
branches of major Canadian banks located in the United States; and

. Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-
denominated certificates of deposit issued by U.S. branches of foreign banks
and held in the United States.

FUTURES AND OPTIONS TRANSACTIONS

Bond Fund and Stock Fund may engage in futures and options transactions. In an
effort to reduce fluctuations in the net asset value of shares of a Fund, a
Fund may attempt to hedge all or a portion of its portfolio by buying and
selling financial futures contracts, buying put options on portfolio securities
and listed put options on futures contracts, (or over-the-counter put options
on futures contracts in the case of Bond Fund) and writing call options on
futures contracts. A Fund may also write covered call options on portfolio
securities to attempt to increase its current income. A Fund will maintain its
positions in securities, option rights, and segregated cash subject to puts and
calls until the options are exercised, closed, or have expired. With respect to
Bond Fund, an option position on financial futures contracts may be closed out
over-the-counter or on an exchange which provides a secondary market for
options of the same series. With respect to Stock Fund, an option position on
financial futures contracts may be closed out only on an exchange which
provides a secondary market for options of the same series.

FUTURES CONTRACTS

Bond Fund and Stock Fund may engage in futures contracts. A futures contract is
a firm commitment by two parties: the seller who agrees to make delivery of the
specific type of security called for in the contract ("going short") and the
buyer who agrees to take delivery of the security ("going long") at a certain
time in the future. However, a stock index futures contract is an agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of the
last trading day of the contract and the price at which the index contract was
originally written. No physical delivery of the underlying securities in the
index is made.

The purpose of the acquisition or sale of a futures contract by a Fund is to
protect the Fund from fluctuations in the value of its securities caused by
anticipated changes in interest rates or market conditions without necessarily
buying or selling the securities. For example, in the fixed income securities
market, price moves inversely to interest rates. A rise in rates means a drop in
price. Conversely, a drop in rates means a rise in price. In order to hedge its
holdings of fixed income securities against a rise in market interest rates,
Bond Fund could enter into contracts to deliver securities at a predetermined
price (i.e., "go short") to protect itself against the possibility that the
prices of its fixed income securities may decline during the Fund's anticipated
holding period. Bond Fund would "go long" (agree to purchase securities in the
future at a predetermined price) to hedge against a decline in market interest
rates.

PUT OPTIONS ON FUTURES CONTRACTS

Bond Fund and Stock Fund may engage in put options on futures contracts. A Fund
may purchase listed put options on futures contracts (or over-the-counter put
options on futures contracts in the case of Bond Fund). 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. A Fund would purchase put options on futures contracts to
protect portfolio securities against decreases in value resulting from market
factors such as an anticipated increase in interest rates.

Generally, if the hedged portfolio securities decrease in value during the term
of an option, the related futures contracts will also decrease in value and the
option will increase in value. In such an event, a Fund will normally close out
its option by selling an identical option. If the hedge is successful, the
proceeds received by a Fund upon the sale of the second option may 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, a 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.

CALL OPTIONS ON FUTURES CONTRACTS

Bond Fund and Stock Fund may engage in call options on futures contracts. In
addition to purchasing put options on futures, Bond Fund and Stock Fund may
write listed call options on futures contracts (or over-the-counter call
options on futures contracts in the case of Bond Fund) to hedge its respective
portfolio against, for example, an increase in market interest rates. When a
Fund writes a call option on a futures contract, it is undertaking the
obligation of assuming a short futures position (selling a futures contract) at
the fixed strike price at any time during the life of the option if the option
is exercised. As market interest rates rise (in the case of Bond Fund) or as
stock prices fall (in the case of Stock Fund), causing the prices of futures to
go down, a Fund's obligation under a call option on a future (to sell a futures
contract) costs less to fulfill, causing the value of a Fund's call option
position to increase.

In other words, as the underlying future's price goes down below the strike
price, the buyer of the option has no reason to exercise the call, so that a
Fund keeps the premium received for the option. This premium can help
substantially to offset the drop in value of a Fund's portfolio securities.
Prior to the expiration of a call written by a Fund, or exercise of it by the
buyer, a 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 a Fund for the initial option. The net premium income of a
Fund will then substantially offset the decrease in value of the hedged
securities.

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

"MARGIN" IN FUTURES TRANSACTIONS

Unlike the purchase or sale of a security, neither Bond Fund nor Stock Fund pay
or receive money upon the purchase or sale of a futures contract. Rather, the
Funds are required to deposit an amount of "initial margin" in cash or U.S.
Treasury bills with the custodian (or the broker, if legally permitted). The
nature of initial margin in futures transactions is different from that of
margin in securities transactions in that futures contracts initial margin does
not involve a borrowing by a Fund to finance the transactions. Initial margin is
in the nature of a performance bond or good faith deposit on the contract which
is returned to a Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied.

A futures contract held by Bond Fund or Stock Fund is valued daily at the
official settlement price of the exchange on which it is traded. Each day a
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 a Fund but
is instead settlement between a Fund and the broker of the amount one would owe
the other if the futures contract expired. In computing its daily net asset
value, a Fund will mark to market its open futures positions.

The Funds are also required to deposit and maintain margin when they write call
options on futures contracts.

PURCHASING PUT OPTIONS ON PORTFOLIO SECURITIES

Bond Fund and Stock Fund may purchase put options on portfolio securities to
protect against price movements in particular securities in their respective
portfolios. A put option gives a 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.

WRITING COVERED CALL OPTIONS ON PORTFOLIO SECURITIES

Bond Fund and Stock Fund may write covered call options to generate income. As
a writer of a call option, a Fund has the obligation upon exercise of the
option during the option period to deliver the underlying security upon payment
of the exercise price. A 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 in the amount of any
additional consideration).

OVER-THE-COUNTER OPTIONS

Bond Fund and Stock Fund may purchase and write over-the-counter options on
portfolio securities in negotiated transactions with the buyers or writers of
the options for those options on portfolio securities held by a Fund and not
traded on an exchange.

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.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

Bond Fund may invest in CMOs. Privately issued CMOs generally represent an
ownership interest in a pool of federal agency mortgage pass-through
securities, such as those issued by the Government National Mortgage
Association. The terms and characteristics of the mortgage instruments may vary
among pass-through mortgage loan pools.

The market for such CMOs has expanded considerably since its inception. The
size of the primary issuance market and the active participation in the
secondary market by securities dealers and other investors make government-
related pools highly liquid.

CONVERTIBLE SECURITIES

Stock Fund may invest in convertible securities. Convertible securities are
fixed income securities which may be exchanged or converted into a
predetermined number of the issuer's underlying common stock at the option of
the holder during a specified time period. Convertible securities may take the
form of convertible preferred stock, convertible bonds or debentures, units
consisting of "usable" bonds and warrants or a combination of the features of
several of these securities. The investment characteristics of each convertible
security vary widely, which allows convertible securities to be employed for a
variety of investment strategies.

The Fund will exchange or convert the convertible securities held in its
portfolio into shares of the underlying common stock when, in the investment
adviser's opinion, the investment characteristics of the underlying common
shares will assist the Fund in achieving its investment objectives. Otherwise
the Fund may hold or trade convertible securities. In selecting convertible
securities for the Fund, the Fund's adviser evaluates the investment
characteristics of the convertible security as a fixed income instrument, and
the investment potential of the underlying equity security for capital
appreciation. In evaluating these matters with respect to a particular
convertible security, the Fund's adviser considers numerous factors, including
the economic and political outlook, the value of the security relative to other
investment alternatives, trends in the determinants of the issuer's profits,
and the issuer's management capability and practices.

WARRANTS

Stock Fund may invest in warrants. Warrants are basically options to purchase
common stock at a specific price (usually at a premium above the market value
of the optioned common stock at issuance) valid for a specific period of time.
Warrants may have a life ranging from less than a year to twenty years or may
be perpetual. However, most warrants have expiration dates after which they are
worthless. In addition, if the market price of the common stock does not exceed
the warrant's exercise price during the life of the warrant, the warrant will
expire as worthless. Warrants have no voting rights, pay no dividends, and have
no rights with respect to the assets of the corporation issuing them. The
percentage increase or decrease in the market price of the warrant may tend to
be greater than the percentage increase or decrease in the market price of the
optioned common stock. The Fund will not invest more than 5% of the value of
its total assets in warrants. No more than 2% of this 5% may be warrants which
are not listed on the New York or American Stock Exchanges. Warrants acquired
in units or attached to securities may be deemed to be without value for
purposes of this policy.

PORTFOLIO TURNOVER

For the year ended April 30, 1994 and for the period from May 11, 1992 (date of
initial public investment), to April 30, 1993, the Bond and Stock Funds'
portfolio turnover rates were 344% and 89%; and 371% and 92%, respectively.

INVESTMENT LIMITATIONS

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Funds will not issue senior securities except that a Fund may borrow
money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amount
borrowed; and except to the extent that a Fund may enter into futures
contracts. The Funds will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of the
portfolio by enabling a Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. A Fund will not purchase any securities while any
borrowings in excess of 5% of its total assets are outstanding. During
the period any reverse repurchase agreements are outstanding, a Fund will
restrict the purchase of portfolio securities to money market instruments
maturing on or before the expiration date of the reverse repurchase
agreements, but only to the extent necessary to assure completion of the
reverse repurchase agreements.

SELLING SHORT AND BUYING ON MARGIN

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

PLEDGING ASSETS

The Funds will not mortgage, pledge, or hypothecate any assets, except to
secure permitted borrowings. In these cases Prime Money Market Fund and
U.S. Treasury Money Market Fund may pledge assets having a market value
not exceeding the lesser of the dollar amounts borrowed or 10% of the
value of total assets of a Fund at the time of the pledge, while Bond
Fund and Stock Fund may pledge assets having a value of 15% of assets
taken at cost. For purposes of this restriction, (a) the deposit of
assets in escrow in connection with the writing of covered put or call
options and the purchase of securities on a when-issued basis; and (b)
collateral arrangements with respect to (i) the purchase and sale of
stock options [and options on stock indexes] and (ii) initial or
variation margin for futures contracts will not be deemed to be pledges
of a Fund's assets. Margin deposits for the purchase and sale of futures
contracts and related options are not deemed to be a pledge.

LENDING CASH OR SECURITIES

The Funds will not lend any of their respective assets except portfolio
securities up to one-third of the value of total assets. This shall not
prevent a Fund from purchasing or holding U.S. government obligations,
money market instruments, variable amount demand master notes, bonds,
debentures, notes, certificates of indebtedness, or other debt
securities, entering into repurchase agreements, or engaging in other
transactions where permitted by a Fund's investment objective, policies,
and limitations or the Trust's Declaration of Trust.

INVESTING IN RESTRICTED SECURITIES

Prime Money Market Fund, Bond Fund and Stock Fund will not invest more
than 10% of net assets in securities subject to restrictions on resale
under the Securities Act of 1933, except for commercial paper issued
under Section 4(2) of the Securities Act of 1933 and certain other
restricted securities which meet the criteria for liquidity as
established by the Board of Trustees.

U.S. Treasury Money Market Fund will not purchase or sell securities
which are restricted as to resale under federal securities law.

INVESTING IN COMMODITIES

None of the Funds will invest in commodities, except to the extent that
Bond Fund and Stock Fund may engage in transactions involving futures
contracts or options on futures contracts.

INVESTING IN REAL ESTATE

None of the Funds will purchase or sell real estate, including limited
partnership interests, although Prime Money Market Fund, Bond Fund and
Stock Fund may invest in securities of issuers whose business involves
the purchase or sale of real estate or in securities which are secured by
real estate or interests in real estate.

DIVERSIFICATION OF INVESTMENTS

With respect to 75% of the value of its respective total assets, Prime
Money Market Fund, Bond Fund and Stock Fund will not purchase securities
issued by any one issuer (other than cash, cash items or securities
issued or guaranteed by the government of the United States or its
agencies or instrumentalities and repurchase agreements collateralized by
such securities), if as a result more than 5% of the value of its total
assets would be invested in the securities of that issuer. The Funds will
not acquire more than 10% of the outstanding voting securities of any one
issuer.

CONCENTRATION OF INVESTMENTS

No Fund will invest 25% or more of the value of its respective total
assets in any one industry (other than securities issued by the U.S.
government, its agencies, or instrumentalities or repurchase agreements
collateralized by these securities), except that Prime Money Market Fund
may invest 25% or more of the value of its total assets in cash or cash
items (including instruments issued by a U.S. branch of a domestic bank
or savings and loan having capital, surplus, and undivided profits in
excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments (i.e., repurchase
agreements).

UNDERWRITING

A Fund will not underwrite any issue of securities, except as a Fund may
be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations.

The above limitations cannot be changed with respect to a Fund without approval
of holders of a majority of that Fund's shares. The following limitations may
be changed by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these limitations becomes effective.

INVESTING IN ILLIQUID SECURITIES

The Bond Fund and Stock Fund will not invest more than 15% and the Prime
Money Market Fund will not invest more than 10% of the value of their
respective net assets in illiquid securities, including repurchase
agreements providing for settlement more than seven days after notice;
and, in the case of Bond Fund and Stock Fund, including over-the-counter
options; in the case of Prime Money Market Fund, Bond Fund and Stock
Fund, including certain restricted securities not determined by the
Trustees to be liquid; and, in the case of Prime Money Market Fund, non-
negotiable fixed income time deposits with maturities over seven days.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Funds will limit their respective investment in other investment
companies to no more than 3% of the total outstanding voting stock of any
investment company, invest no more than 5% of total assets in any one
investment company, or invest more than 10% of total assets in investment
companies in general. Prime Money Market Fund and U.S. Treasury Money
Market Fund will limit their investments in the securities of other
investment companies to those of money market funds having investment
objectives and policies similar to their own. The Funds will purchase
securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However,
these limitations are not applicable if the securities are acquired in a
merger, consolidation, reorganization, or acquisition of assets. It
should be noted that investment companies incur certain expenses such as
management fees, and, therefore, any investment by a Fund in shares of
another investment company would be subject to such customary expenses.

INVESTING IN NEW ISSUERS

A Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations, including the operation of any predecessor.

INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF
THE TRUST

A Fund will not purchase or retain the securities of any issuer if the
officers and Trustees of the Trust or a Fund's investment adviser owning
individually more than 1/2 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.

INVESTING IN MINERALS

A Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, except it may purchase the
securities of issuers which invest in or sponsor such programs.

ARBITRAGE TRANSACTIONS

A Fund will not enter into transactions for the purpose of engaging in
arbitrage.

OPTIONS AND RELATED TRANSACTIONS

A Fund will not purchase, write, or sell puts, calls, straddles, spreads,
or combinations thereof, except that Bond Fund and Stock Fund may engage
in put and call options, futures and options on futures.

PURCHASING SECURITIES TO EXERCISE CONTROL

A Fund will not purchase securities of a company for the purpose of
exercising control or management.

INVESTING IN WARRANTS

The Funds will not invest in warrants, except that Stock Fund may invest
not more than 5% of its net assets in warrants, including those acquired
in units or attached to other securities. To comply with certain state
restrictions, the Fund will limit its investment in such warrants not
listed on the New York or American Stock Exchanges to 2% of its net
assets. (If state restrictions change, this latter restriction may be
revised without notice to shareholders.) For purposes of this investment
restriction, warrants will be valued at the lower of cost or market,
except that warrants acquired by the Fund in units with or attached to
securities may be deemed to be without value.

Except with respect to the Funds' policy of 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.

To comply with registration requirements in certain states, Bond Fund and Stock
Fund (1) will limit the aggregate value of the assets underlying covered call
options or put options written by a Fund to not more than 25% of its net
assets, (2) will limit the premiums paid for options purchased by a Fund to 5%
of its net assets, and (3) will limit the margin deposits on futures contracts
entered into by a Fund to 5% of its net assets. (If state requirements change,
these restrictions may be revised without shareholder notification.)

For purposes of its policies and limitations, the Funds consider certificates
of deposit and demand and time deposits issued by a U.S. branch of a domestic
bank or savings and loan having capital, surplus, and undivided profits in
excess of $100,000,000 at the time of investment to be "cash items."

RIMCO MONUMENT FUNDS MANAGEMENT
- --------------------------------------------------------------------------------

OFFICERS AND TRUSTEES

Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Riggs Investment
Management Corporation, The Riggs National Bank of Washington D.C., Federated
Investors, Federated Securities Corp., Federated Services Company and Federated
Administrative Services. As used in this section, the "Funds" refers to certain
investment companies organized or advised by affiliates of Federated Investors.

<TABLE>
<CAPTION>
Positions with Principal Occupations
Name and Address the Trust During Past Five Years
- -------------------------------------------------------------------------------
<C> <C> <S>
John F. Donahue+* Chairman and Chairman and Trustee,
Federated Investors Tower Trustee Federated Investors; Chairman
Pittsburgh, PA and Trustee, Federated
Advisers, Federated
Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and
Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, The
Standard Fire Insurance
Company. Mr. Donahue is the
father of J. Christopher
Donahue, Vice President of the
Trust.
- -------------------------------------------------------------------------------
John T. Conroy, Jr. Trustee President, Investment
Wood/IPC Properties Corporation; Senior
Commercial Department Vice- President, John R. Wood
John R. Wood and and Associates, Inc.,
Associates, Inc., Realtors Realtors; President, Northgate
3255 Tamiami Trail North Village Development
Naples, FL Corporation; General Partner
or Trust in private real
estate ventures in Southwest
Florida; Director, Trustee or
Managing General Partner of
the Funds; formerly,
President, Naples Property
Management, Inc.
- -------------------------------------------------------------------------------

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

- -------------------------------------------------------------------------------
James E. Dowd Trustee Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
- -------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and
Trustee, University of
Pittsburgh; Director, Trustee,
or Managing General Partner of
the Funds.
- -------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Trustee Attorney-at-law; Partner,
5916 Penn Mall Meyer and Flaherty; Director,
Pittsburgh, PA Eat'N Park Restaurants, Inc.,
and Statewide Agency, Inc.;
Director, Trustee, or Managing
General Partner of the Funds;
formerly, Counsel, Horizon
Financial, F.A., Western
Region.
- -------------------------------------------------------------------------------
Edward C. Gonzales* President, Vice President, Treasurer and
Federated Investors Tower Treasurer Trustee, Federated Investors;
Pittsburgh, PA and Trustee Vice President and Treasurer,
Federated Advisers, Federated
Management, and Federated
Research; Executive Vice
President, Treasurer, and
Director, Federated Securities
Corp.; Trustee, Federated
Services Company; Chairman,
Treasurer, and Trustee,
Federated Administrative
Services; Trustee or Director
of some of the Funds; Vice
President and Treasurer
of the Funds.
- -------------------------------------------------------------------------------

Peter E. Madden Trustee Consultant; State
225 Franklin Street Representative, Commonwealth
Boston, MA of Massachusetts; Director,
Trustee or Managing General
Partner of the Funds; formerly
President, State Street Bank
and Trust Company and State
Street Boston Corporation; and
Trustee, Lahey Clinic
Foundation.

- -------------------------------------------------------------------------------
Gregor F. Meyer Trustee Attorney-at-law; Partner,
5916 Penn Mall Meyer and Flaherty; Chairman,
Pittsburgh, PA Meritcare, Inc.; Director,
Eat'N Park Restaurants, Inc.;
Director, Trustee, or Managing
General Partner of the Funds;
formerly, Vice Chairman,
Horizon Financial, F.A.
- -------------------------------------------------------------------------------

Wesley W. Posvar Trustee Professor, Foreign Policy and
1202 Cathedral of Learning Management Consultant; Trustee,
University of Pittsburgh Carnegie Endowment for
Pittsburgh, PA International Peace, RAND
Corporation, Online Computer
Library and U.S. Space
Foundation; Chairman, Czecho
Slovak Management Center;
Director, Trustee, or Managing
General Partner of the Funds;
President Emeritus, University
of Pittsburgh; formerly,
Chairman, National Advisory
Council for Environmental
Policy and Technology.

- -------------------------------------------------------------------------------
Marjorie P. Smuts Trustee Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
- -------------------------------------------------------------------------------
Craig P. Churman Vice President Vice President, Federated
Federated Investors Tower and Assistant Administrative Services; Vice
Pittsburgh, PA Treasurer President and Assistant
Treasurer of some of the Funds.
- -------------------------------------------------------------------------------
J. Christopher Donahue Vice President President and Trustee,
Federated Investors Tower Federated Investors; Trustee,
Pittsburgh, PA Federated Advisers, Federated
Management, and Federated
Research; President and
Trustee, Federated
Administrative Services;
Trustee, Federated Services
Company; President or Vice
President of the Funds;
Director, Trustee or Managing
General Partner of some of the
Funds. Mr. Donahue is the son
of John F. Donahue, Chairman
and Trustee of the Trust.
- -------------------------------------------------------------------------------
Richard B. Fisher Vice President Executive Vice President and
Federated Investors Tower Trustee, Federated Investors;
Pittsburgh, PA Chairman and Director,
Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
- -------------------------------------------------------------------------------
John W. McGonigle Vice President Vice President, Secretary,
Federated Investors Tower and Secretary General Counsel, and Trustee,
Pittsburgh, PA Federated Investors; Vice
President, Secretary and
Trustee, Federated Advisers,
Federated Management, and
Federated Research; Trustee,
Federated Services Company;
Executive Vice President,
Secretary, and Trustee,
Federated Administrative
Services and Director and
Executive Vice President,
Federated Securities Corp.;
Vice President and Secretary of
the Funds.
- -------------------------------------------------------------------------------
John A. Staley, IV Vice President Vice President and Trustee,
Federated Investors Tower Federated Investors; Executive
Pittsburgh, PA Vice President, Federated
Securities Corp.; President and
Trustee, Federated Advisers,
Federated Management, and
Federated Research; Vice
President of the Federated
Funds; Director, Trustee, or
Managing General Partner of
some of the Funds; formerly,
Vice President, The Standard
Fire Insurance Company and
President of its Federated
Research Division.
- -------------------------------------------------------------------------------
</TABLE>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940.

+ Members of Executive Committee. The Executive Committee of the Board of
Trustees handles the responsibilities of the Board of Trustees between
meetings of the Board.

THE FUNDS

"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series; Cash Trust Series II; Cash Trust Series, Inc.; D.G. Investor Series;
Edward D. Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income Trust;
Federated Income Securities Trust; Federated Index Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
U.S. Government Bond Fund; First Priority Funds; Fixed Income Securities, Inc.;
Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government Securities,
Inc.; Government Income Securities, Inc.; High Yield Cash Trust; Insight
Institutional Series, Inc.; Insurance Management Series; Intermediate Municipal
Trust; International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty Term Trust, Inc.-1999;
Liberty U.S. Government Money Market Trust; Liberty Utility Fund, Inc.; Liquid
Cash Trust; Managed Series Trust; Mark Twain Funds; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree
Funds; The Planters Funds; Portage Funds; RIMCO Monument Funds; Short-Term
Municipal Trust; Signet Select Funds; The Shawmut Funds; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds;
Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.

FUND OWNERSHIP

Officers and Trustees own less than 1% of the outstanding shares of each Fund.

The following list indicates the beneficial ownership of shareholders who are
the beneficial owners of more than 5% of the outstanding Shares of the
following Funds as of June 14, 1994: Riggs National Bank, acting in various
capacities for numerous accounts owned, of record: approximately 4,594,968
shares (90.92%) of Bond Fund; approximately 272,254 shares (85.13%) of Prime
Money Market Fund; approximately 4,327,912 shares (86.79%) of Stock Fund;
approximately 89,614,391 shares (94.30%) of U.S. Treasury Money Market Fund;
Georgetown University, Washington, D.C., owned approximately 20,071,721 shares
(6.28%) of Prime Money Market Fund..

TRUSTEE LIABILITY

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

INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------

ADVISER TO THE TRUST

The Trust's investment adviser is Riggs Investment Management Corporation
("RIMCO"). It is a subsidiary of The Riggs National Bank of Washington D.C.
("Riggs National Bank").

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

Because of the internal controls maintained by Riggs National Bank to restrict
the flow of non-public information, Fund investments are typically made without
any knowledge of Riggs National Bank's or its affiliates' lending relationships
with an issuer.

ADVISORY FEES

For its advisory services, RIMCO receives an annual investment advisory fee as
described in the prospectus. For the years ended April 30, 1994 and 1993, and
for the period from the date of initial public investment, September 17, 1991,
to April 30, 1992, the adviser earned fees from the Prime Money Market Fund of
$1,749,364, $1,359,233 and $286,319, respectively, of which $973,920, $779,685
and $239,145, respectively, were waived. For the years ended April 30, 1994 and
1993, and for the period from the start of business, June 3, 1991, to April 30,
1992, the adviser earned fees from the U.S.Treasury Money Market Fund of
$603,612, $357,883, and $111,936, respectively, of which $187,081, $211,661 and
$90,927, respectively, were waived. For the year ended April 30, 1994 and for
the period from the date of initial public investment, May 11, 1992, to April
30, 1993, the adviser earned fees from the Bond Fund of $361,465 and $274,123 of
which $230,341 and $234,520, respectively, were waived. For the year ended April
30, 1994 and for the period from the date of initial public investment, May 11,
1992, to April 30, 1993, the adviser earned fees from the Stock Fund of
$366,126, and $234,851, respectively, of which $96,024 and $150,164,
respectively, were waived.

STATE EXPENSE LIMITATIONS

The adviser has undertaken to comply with the expense limitation
established by certain states for investment companies whose shares are
registered for sale in those states. If a Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2 1/2% per year of the first $30 million of average net assets, 2%
per year of the
next $70 million of average net assets, and 1 1/2% per year of the
remaining average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.

If a Fund's monthly projected operating expenses exceed this limitation,
the investment advisory fee paid will be reduced by the amount of the
excess, subject to an annual adjustment. If the expense limitation is
exceeded, the amount to be reimbursed by the adviser will be limited, in
any single fiscal year, by the amount of the investment advisory fee.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.

ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------

Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for the
fees set forth in the prospectus. For the years ended April 30, 1994 and 1993,
and for the period from the date of initial public investment, September 17,
1991, to April 30, 1992, Federated Administrative Services earned from Prime
Money Market Fund fees equal to $462,675, $380,420 and $85,896, respectively,
of which $0, $51,642 and $25,556, respectively, were waived. For the years
ended April 30, 1994 and 1993, and for the period from the start of business,
June 3, 1991, to April 30, 1992, Federated Administrative Services earned from
the U.S. Treasury Money Market Fund fees equal to $160,619, $100,328 and
$33,581, respectively, of which $0, $0 and $2,515, respectively, were waived.
For the year ended April 30, 1994 and for the period from the date of initial
public investment, May 11, 1992, to April 30, 1993, Federated Administrative
Services earned from the Bond Fund fees equal to $64,134 and $51,181,
respectively, of which $0 and $3,654, respectively, were waived. For the year
ended April 30, 1994 and for the period from the date of initial public
investment, May 11, 1992, to April 30, 1993, Federated Administrative Services
earned from the Stock Fund fees equal to $64,944 and $43,863, respectively, of
which $0 and $1,395, respectively, were waived.

In addition, John A. Staley, IV, an officer of the Trust, holds approximately
15% of the outstanding common stock and serves as a director of Commercial Data
Services, Inc., a company which provides computer processing services to
Federated Administrative Services.

Federated Services Company ("FServ") is the Funds' portfolio accountant,
transfer agent and dividend disbursing agent. For the years ended April 30,
1994 and 1993, and for the period from the date of initial public investment,
September 17, 1991, to April 30, 1992, FServ received from the Prime Money
Market Fund fees equal to $106,071, $76,031 and $24,785, respectively. For the
years ended April 30, 1994 and 1993, and for the period from the start of
business, June 3, 1991, to April 30, 1992, FServ received from the U.S.
Treasury Money Market Fund fees equal to $45,458, $47,961 and $23,044,
respectively. For the year ended April 30, 1994 and for the period from the
date of initial public investment, May 11, 1992, to April 30, 1993, FServ
received from the Bond Fund fees equal to $78,636 and $45,062, respectively.
For the year ended April 30, 1994 and for the period from the date of initial
public investment, May 11, 1992, to April 30, 1993, FServ received from the
Stock Fund fees equal to $81,432 and $38,326, respectively.

CUSTODIAN
- --------------------------------------------------------------------------------

For its service as custodian, Riggs National Bank may receive an annual fee,
payable monthly based upon the Fund's average aggregate daily net assets. In
addition, Riggs National Bank is reimbursed for its out-of-pocket expenses.

BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better
price and execution of the order can be obtained elsewhere. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
guidelines established by the Board of Trustees.

The adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Funds or to the
adviser and may include:

. advice as to the advisability of investing in securities;

. security analysis and reports;

. economic studies;

. industry studies;

. receipt of quotations for portfolio evaluations; and

. similar services.

The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage
and research services provided.

Research services provided by brokers may be used by the adviser in advising
the Funds and other accounts. To the extent that receipt of these services may
supplant services for which the adviser or its affiliates might otherwise have
paid, it would tend to reduce their expenses.

For the year ended April 30, 1994 and for the period from May 11, 1992 (date of
initial public investment), to April 30, 1993, the Stock Fund paid $16,091 and
$117,893, respectively, as brokerage commissions on brokerage transactions.

PURCHASING SHARES
- --------------------------------------------------------------------------------

Shares of Prime Money Market Fund and U.S. Treasury Money Market Fund are sold
at their net asset value without a sales charge. Shares of Bond Fund and Stock
Fund are sold at their net asset value plus a sales charge. Shares of the Funds
are sold on days the New York Stock Exchange is open for business except on
Columbus Day, Veterans' Day or Martin Luther King Day. The procedure for
purchasing shares of the Funds is explained in the prospectus under "Investing
in the Funds."

CONVERSION TO FEDERAL FUNDS

It is the Funds' policy to be as fully invested as possible so that maximum
interest or dividends may be earned. To this end, all payments from
shareholders must be in federal funds or be converted into federal funds. Riggs
National Bank acts as the shareholder's agent in depositing checks and
converting them to federal funds.

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

Prime Money Market Fund and U.S. Treasury Money Market Fund attempt to
stabilize the value of their respective shares at $1.00. Net asset values of
Bond Fund and Stock Fund generally change each day. The days on which the net
asset value is calculated by these Funds are described in the prospectus.

DETERMINING MARKET VALUE OF SECURITIES

The market value of Bond Fund's and Stock Fund's portfolio securities are
determined as follows:

. for equity securities, according to the last sale price on a national
securities exchange, if available;

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

. for unlisted equity securities, the latest bid prices;

. for bonds and other fixed income securities, as determined by an independent
pricing service;

. for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service or for short-term
obligations with remaining maturities of less than 60 days, at the time of
purchase, at amortized cost; or

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

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may reflect: institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.

The Funds will value futures contracts, options, and put options on futures and
at their market values established by the exchanges at the close of option
trading on such exchanges unless the Board of Trustees determine in good faith
that another method of valuing option positions is necessary to appraise their
fair value.

USE OF THE AMORTIZED COST METHOD

With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund,
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.

A 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 a Fund's investment objective.

Under the Rule a Fund is permitted to purchase instruments which are subject to
demand features or standby commitments. As defined by the Rule, a demand
feature entitles a Fund to receive the principal amount of the instrument from
the issuer or a third party on (1) no more than 30 days' notice or (2) at
specified intervals not exceeding one year on no more than 30 days' notice. A
standby commitment entitles a Fund to achieve same day settlement and to
receive an exercise price equal to the amortized cost of the underlying
instrument plus accrued interest at the time of exercise.

MONITORING PROCEDURES

The Trustees' 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.

INVESTMENT RESTRICTIONS

The Rule requires that a Fund limit its investments to instruments that,
in the opinion of the Board of Trustees, present minimal credit risk and
that, if rated, meet minimum rating standards set forth in the Rule. If
the instruments are not rated, the Trustees must determine that they are
of comparable quality. Shares of investment companies purchased by the
Funds will meet these same criteria and will have investment policies
consistent with Rule 2a-7. The Rule also requires a Fund to maintain a
dollar-weighted average portfolio maturity (not more than 90 days)
appropriate to the objective of maintaining a stable net asset value of
$1.00 per share. In addition, no instrument with a remaining maturity of
more than 13 months can be purchased by a Fund.

Should the disposition of a portfolio security result in a dollar-
weighted average portfolio maturity of more than 90 days, a Fund will
invest its available cash to reduce the average maturity to 90 days or
less as soon as possible.

A Fund may attempt to increase yield by trading portfolio securities to take
advantage of short-term market variations. This policy may, from time to time,
result in high portfolio turnover. Under the amortized cost method of
valuation, 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
a Fund computed by dividing the annualized daily income on a 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 indicated daily yield on shares of the
Fund computed the same way may tend to be lower than a similar computation made
by using a method of calculation based upon market prices and estimates.

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

Each Fund redeems shares at the next computed net asset value after Riggs
National Bank receives the redemption request. Redemption procedures are
explained in the prospectus under "Redeeming Shares."

REDEMPTION IN KIND

Although the Trust intends to redeem shares in cash, it reserves the right
under certain circumstances to pay the redemption price in whole or in part by
a distribution of securities from a Fund's portfolio. To the extent available,
such securities will be readily marketable.

Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the Board
of Trustees determine to be fair and equitable.

The Trust has elected to be governed by Rule 18f-1 of the Investment Company
Act of 1940 under which the Trust is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of a Fund's net
asset value during any 90-day period.

TAX STATUS
- --------------------------------------------------------------------------------

THE FUNDS' TAX STATUS

The Funds will pay no federal income tax because they expect to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, each Fund must,
among other requirements:

. derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;

. derive less than 30% of its gross income from the sale of securities held
less than three months;

. invest in securities within certain statutory limits; and

. distribute to its shareholders at least 90% of its net income earned during
the year.

SHAREHOLDERS' TAX STATUS

Shareholders are subject to federal income tax on dividends received as cash or
additional shares. With respect to the Prime Money Market Fund, U.S. Treasury
Money Market Fund, and Bond Fund, no portion of any income dividend paid by a
Fund is expected to be eligible for the dividends received deduction available
to corporations. With respect to the Stock Fund, the dividends received
deduction for corporations will apply to ordinary income distributions to the
extent the distribution represents amounts that would qualify for the dividends
received deduction to a particular fund if that fund were a regular corporation
and to the extent designed by a fund as so qualifying. These dividends, and any
short-term capital gains, are taxable as ordinary income.

CAPITAL GAINS

Capital gains experienced by Prime Money Market Fund and U.S. Treasury Money
Market Fund could result in an increase in dividends. Capital losses could
result in a decrease in dividends. If for some extraordinary reason these Funds
realize net long-term capital gains, such net long-term capital gains will be
distributed at least once every 12 months.
With respect to Bond Fund and Stock Fund, long-term capital gains distributed
to shareholders will be treated as long-term capital gains regardless of how
long shareholders have held shares.

TOTAL RETURN
- --------------------------------------------------------------------------------

The Bond Fund's average annual total returns for the one-year and since
inception (May 11, 1992) periods ended April 30, 1994 were -2.47% and 5.05%,
respectively.

The Stock Fund's average annual total returns the one-year and since inception
(May 11, 1992) periods ended April 30, 1994 were 11.23% and 8.93%,
respectively.

The Funds' average annual total return 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 net
asset value 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 load, adjusted
over the period by any additional shares, assuming the monthly or quarterly, as
applicable, reinvestment of all dividends and distributions.

YIELD
- --------------------------------------------------------------------------------

The yields for the seven-day period ended April 30, 1994 for the Prime Money
Market Fund and U.S. Treasury Money Market Fund were 3.57% and 2.97%,
respectively.

The Bond Fund's yield for the thirty-day period ended April 30, 1994 was 5.11%.

The Stock Fund's yield for the thirty-day period ended April 30, 1994 was
1.43%.

Prime Money Market Fund and U.S. Treasury Money Market Fund calculate yield
daily, based upon the seven days ending on the day of the calculation, called
the "base period." This yield is computed by:

. determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net change
excluding capital changes but including the value of any additional shares
purchased with dividends earned from the original one share and all dividends
declared on the original and any purchased shares;

. dividing the net change in the account's value by the value of the account at
the beginning of the base period to determine the base period return; and

. multiplying the base period return by 365/7.

The yield for Bond Fund and Stock Fund is determined by dividing the net
investment income per share (as defined by the Securities and Exchange
Commission) earned by the Fund over a thirty-day period by the maximum offering
price per share of the Fund on the last day of the period. This value is then
annualized using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each month
over a twelve-month period and is reinvested every six months. The yield does
not necessarily reflect income actually earned by the Fund because of certain
adjustments required by the Securities and Exchange Commission and, therefore,
may not correlate to the dividends or other distributions paid to shareholders.

To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in a Fund,
the performance will be reduced for those shareholders paying those fees.

EFFECTIVE YIELD
- --------------------------------------------------------------------------------

The effective yields for the seven-day period ended April 30, 1994 for the
Prime Money Market Fund and U.S. Treasury Money Market Fund were 3.64% and
3.01%, respectively.

The effective yield of Prime Money Market Fund and U.S. Treasury Money Market
Fund is computed 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.

PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------

Each Fund's performance depends upon such variables as:

. portfolio quality;

. average portfolio maturity;

. type of instruments in which the portfolio is invested;

. changes in interest rates on money market instruments in the case of Prime
Money Market Fund and U.S. Treasury Money Market Fund, or changes in interest
rates and market value of portfolio securities in the case of Bond Fund and
Stock Fund;

. changes in each Fund's expenses; and

. the relative amount of each Fund's cash flow.

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

PRIME MONEY MARKET FUND:

. 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, if any.
From time to time, the Fund will quote its Lipper ranking in advertising and
sales literature.

. BANK RATE MONITOR NATIONAL INDEX, Miami Beach, Florida, is a financial
reporting service which publishes weekly average rates of 50 leading bank and
thrift institution money market deposit accounts. The rates published in the
index are an average of the personal account rates offered on the Wednesday
prior to the date of publication by ten of the largest banks and thrifts in
each of the five largest Standard Metropolitan Statistical Areas. Account
minimums range upward from $2,500 in each institution and compounding methods
vary. If more than one rate is offered, the lowest rate is used. Rates are
subject to change at any time specified by the institution.

. SALOMON 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.

U.S. TREASURY MONEY MARKET FUND:

. LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all income dividends and capital gains distributions, if any.
From time to time, the Fund will quote its Lipper ranking in advertising and
sales literature.

. SALOMON 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.

. MONEY, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day compound (effective)
yield. From time to time, the Fund will quote its Money ranking in
advertising and sales literature.

BOND FUND:

. LEHMAN BROTHERS GOVERNMENT INDEX is an unmanaged index comprised of all
publicly issued, non-convertible domestic debt of the U.S. government, or any
agency thereof, or any quasi-federal corporation and of corporate debt
guaranteed by the U.S. government. Only notes and bonds with a minimum
outstanding principal of $1 million and a minimum maturity of one year are
included.

. LEHMAN BROTHERS GOVERNMENT/CORPORATE (TOTAL) INDEX is comprised of
approximately 5,000 issues which include non-convertible bonds publicly
issued by the U.S. government or its agencies; corporate bonds guaranteed by
the U.S. government and quasi-federal corporations; and publicly issued,
fixed rate, non-convertible domestic bonds of companies in industry, public
utilities and finance. The average maturity of these bonds approximates nine
years. Tracked by Shearson Lehman Brothers, Inc., the index calculates total
returns for one month, three month, twelve month and ten year periods and
year-to-date.

. LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund categories
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 specific period of time. From time to time, the Fund
will quote its Lipper ranking in advertising and sales literature.

. LEHMAN BROTHERS AGGREGATE BOND INDEX is a total return index measuring both
the capital price changes and income provided by the underlying universe of
securities, weighted by market value outstanding. The Aggregate Bond Index is
comprised of the Shearson Lehman Government Bond Index, Corporate Bond Index,
Mortgage-Backed Securities Index and the Yankee Bond Index. These indices
include: U.S. Treasury obligations, including bonds and notes; U.S. agency
obligations, including those of the Federal Farm Credit Bank, Federal Land
Bank and the Bank for Co-Operatives; foreign obligations, U.S. investment-
grade corporate debt and mortgage-backed obligations. All corporate debt
included in the Aggregate Bond Index has a minimum S&P rating of BBB, a
minimum Moody's rating of Baa, or a minimum Fitch rating of BBB.

. MERRILL LYNCH CORPORATE AND GOVERNMENT INDEX includes issues which must be in
the form of publicly placed, nonconvertible, coupon-bearing domestic debt and
must carry a term of maturity of at least one year. Par amounts outstanding
must be no less than $10 million at the start and at the close of the
performance measurement period. Corporate instruments must be rated by S&P or
by Moody's as investment grade issues (i.e., BBB/Baa or better).

. MERRILL LYNCH DOMESTIC MASTER INDEX includes issues which must be in the form
of publicly placed, nonconvertible, coupon-bearing domestic debt and must
carry a term to maturity of at least one year. Par amounts outstanding must
be no less than $10 million at the start and at the close of the performance
measurement period. The Domestic Master Index is a broader index than the
Merrill Lynch Corporate and Government Index and includes, for example,
mortgage related securities. The mortgage market is divided by agency, type
of mortgage and coupon and the amount outstanding in each agency/type/coupon
subdivision must be no less than $200 million at the start and at the close
of the performance measurement period. Corporate instruments must be rated by
S&P or by Moody's as investment grade issues (i.e., BBB/Baa or better).

STOCK FUND:

. 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 specific period of
time. From time to time, the Fund will quote its Lipper ranking in
advertising and sales literature

. DOW JONES INDUSTRIAL AVERAGE ("DJIA") represents share prices of selected
blue-chip industrial corporations. The DJIA indicates daily changes in the
average price of stock in these corporations. It also reports total sales for
this group. Because it represents the top corporations of America, the DJIA
index is a leading economic indicator for the stock market as a whole.

. STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS, a composite
index of common stocks in industry, transportation, and financial and public
utility companies. The Standard & Poor's index assumes reinvestment of all
dividends paid by stocks listed on the index. Taxes due on any of these
distributions are not included, nor are brokerage or other fees calculated in
the Standard & Poor's figures.

Advertisements and other sales literature for the Funds may quote total returns
which are calculated on non-standardized base periods. These total returns also
represent the historic change in the value of an investment in the Funds based
on monthly reinvestment of dividends over a specified period of time.
Advertisements may quote performance information which does not reflect the
effect of the sales load of the Bond Fund or Stock Fund.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The financial statements for the fiscal year ended April 30, 1994, are
incorporated herein by reference to the Trust's Annual Report dated April 30,
1994 (File No. 811-6309). A copy of the Annual Report may be obtained without
charge by contacting the Trust at the address located on the back cover of the
prospectus.

APPENDIX
- --------------------------------------------------------------------------------
STANDARD & POOR'S CORPORATION CORPORATE BOND RATING DEFINITIONS

AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

NR--NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy.

Standard and Poor's may apply a plus (+) or minus (-) to the above rating
classifications to show relative standing within the classifications.

MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATING DEFINITIONS

Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa--Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
NR--Not rated by Moody's.

Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

FITCH INVESTORS SERVICE, INC. CORPORATE BOND RATING DEFINITIONS

AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA--Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA." Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated "A-
1+."

A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.

BBB--Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore, impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.

NR--NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "AAA" category.

STANDARD & POOR'S CORPORATION COMMERCIAL PAPER RATING DEFINITIONS

A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) designation.

A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."

MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS

PRIME-1--Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following characteristics:

. Leading market positions in well-established industries.

. High rates of return on funds employed.

. Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

. Well-established access to a range of financial markets and assured sources
of alternate liquidity.

PRIME-2--Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

FITCH INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS

Plus or minus signs are used with a rating symbol to indicate the relative
position of the credit within the rating category:

F-1+--Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1--Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.

1061803B (6/94)