RIGGS FUNDS, 485BPOS, 1999-12-01

RIGGS FUNDS
485BPOS, 1999-12-01

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1933 Act File No. 33-40428
1940 Act File No. 811-6309

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---

Pre-Effective Amendment No. ............................... _
-------- ---

Post-Effective Amendment No. 19 .................................. X
---- ---

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 19 ................................................. X
---- ---

RIGGS FUNDS

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7910

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire,

Federated Investors Tower,

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b).
_X on December 10, 1999 pursuant to paragraph (b).
_ 60 days after filing pursuant to paragraph (a) (i).

on pursuant to paragraph (a) (i).
_ 75 days after filing pursuant to paragraph (a)(ii).

on _________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

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

Copies To:

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

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

PROSPECTUS

RIGGS FUNDS

CLASS Y SHARES

Riggs Stock Fund
Riggs Small Company Stock Fund
Riggs U.S. Government Securities Fund
Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

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

CONTENTS

Fund Goals, Strategies, Performance and Risk 2
What are the Funds' Fees and Expenses? 8
Principal Securities in Which the Funds Invest 9
Specific Risks of Investing in the Funds 13
What do Shares Cost? 15
How are the Funds Sold? 15
How to Purchase Shares 15
How to Redeem and Exchange Shares 17
Account and Share Information 20
Who Manages the Funds? 21
Financial Information 22

december 13, 1999

<PAGE>

FUND GOALS, STRATEGIES, PERFORMANCE AND RISK

Riggs Funds offer nine portfolios, including three equity funds, four
income funds and two money market funds. The following describes the investment
goals, strategies, and principal risks of Riggs Stock Fund (Stock Fund), Riggs
Small Company Stock Fund (Small Company Stock Fund), Riggs U.S. Government
Securities Fund (U.S. Government Securities Fund), Riggs Prime Money Market Fund
(Prime Money Market Fund) and Riggs U.S. Treasury Money Market Fund (U.S.
Treasury Money Market Fund) (collectively, the "Funds"). There can be no
assurance that a Fund will achieve its goal.

The investment goal of each Fund described in this section may only be
changed upon the approval of a majority of the outstanding Shares of the Fund
which would be affected by the change. The investment strategies may be changed
without Shareholder approval.

The Shares offered by this prospectus are not deposits or obligations of
any bank including Riggs Bank N.A., and are not endorsed or guaranteed by any
bank and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency.

RIGGS STOCK FUND

GOAL

Seeks to provide growth of capital and income.

STRATEGY

The Fund pursues its investment objective by investing at least 65% of its
assets in common stocks of improving quality, large capitalization U.S.
companies. These will generally be companies whose market capitalizations are $5
billion or more, and whose earnings and dividends are growing at above average
rates relative to the historic growth rates of such companies, and relative to
the current growth rates of other companies comprising the Standard & Poor's 500
Index. The adviser uses the "value" style of investing, selecting stocks which
it believes are undervalued based on such factors as low price/earnings ratios
relative to earnings growth and history; rising earnings estimates; relative
price strength; high or improved earnings, and credit quality. The adviser may
sell a portfolio security if it determines that the issuer's prospects have
deteriorated or if it finds an attractive security which it deems to have
superior risk and return characteristics to a security held by the Fund.

RISK/RETURN BAR CHART AND TABLE

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

The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 10% up to 40%.

The `x' axis represents calculation periods from 1993 through the calendar year
ended 1998. The light gray shaded chart features six distinct vertical bars,
each shaded in charcoal, and each visually representing by height the total
return percentages for the calendar year stated directly at its base. The
calculated total return percentage for the Fund for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1993 through
1998. The percentages noted are:

18.51%, 3.44%, 37.59%, 19.90%, 27.75% and 16.50% respectively.

THE TOTAL RETURNS SHOWN HERE ARE FOR CLASS R SHARES WHICH IS ANOTHER CLASS OF
SHARES OFFERED BY THE STOCK FUND. CLASS R SHARES ARE NOT OFFERED IN THIS
PROSPECTUS. THE TOTAL RETURNS FOR CLASS R SHARES ARE DISCLOSED HERE BECAUSE
CLASS Y SHARES HAVE ONLY BEEN OFFERED SINCE DECEMBER 13, 1999. THESE TOTAL
RETURNS WOULD BE SUBSTANTIALLY SIMILAR TO THE ANNUAL RETURNS FOR CLASS Y SHARES
OVER THE SAME PERIOD AND WOULD DIFFER ONLY TO THE EXTENT THAT THE TWO CLASSES DO
NOT HAVE THE SAME EXPENSES. IT IS ANTICIPATED THAT EXPENSES OF CLASS Y SHARES
WILL NOT EXCEED THOSE OF THE CLASS R SHARES. THE BAR CHART SHOWS THE VARIABILITY
OF THE FUND'S CLASS R SHARES TOTAL RETURNS ON A CALENDAR YEAR-END BASIS. THE
TOTAL RETURNS DISPLAYED FOR THE FUND'S CLASS R SHARES DO NOT REFLECT THE PAYMENT
OF ANY SALES CHARGES OR RECURRING SHAREHOLDER ACCOUNT FEES. IF THESE CHARGES OR
FEES HAD BEEN INCLUDED, THE RETURNS SHOWN WOULD HAVE BEEN LOWER. THE FUND'S
CLASS R SHARES TOTAL RETURN FOR THE NINE-MONTH PERIOD FROM JANUARY 1, 1999 TO
SEPTEMBER 30, 1999 WAS (9.38)%. WITHIN THE PERIOD SHOWN IN THE CHART, THE FUND'S
CLASS R SHARES HIGHEST QUARTERLY RETURN WAS 22.00% (QUARTER ENDED DECEMBER 31,
1998). ITS LOWEST QUARTERLY RETURN WAS (14.71)% (QUARTER ENDED SEPTEMBER 30,
1998). AVERAGE ANNUAL TOTAL RETURN TABLE The following table represents the
Fund's Class R Shares Average Annual Total Returns for the calendar periods
ended December 31, 1998. The table shows the Fund's Class R Shares total returns
averaged over a period of years relative to the Standard & Poor's 500 Index
("S&P 500"), a broad-based market index. The S&P 500 is unmanaged, and it is not
possible to invest directly in an index.

- -------------------------------------------------------
CALENDAR PERIOD CLASS S&P 500

- -------------------------------------------------------
- -------------------------------------------------------
1 Year 14.50% 28.58%
- -------------------------------------------------------
- -------------------------------------------------------
5 Years 20.32% 23.89%
- -------------------------------------------------------
- -------------------------------------------------------
Start of Performance1 18.67% 20.41%
- -------------------------------------------------------
1 THE FUND'S CLASS R SHARES START OF PERFORMANCE DATE WAS MAY 11, 1992.

PAST PERFORMANCE DOES NOT NECESSARILY PREDICT FUTURE PERFORMANCE. THIS
INFORMATION PROVIDES YOU WITH HISTORICAL PERFORMANCE INFORMATION SO THAT YOU
CAN ANALYZE WHETHER THE FUND'S INVESTMENT RISKS ARE BALANCED BY ITS POTENTIAL
RETURNS.

RIGGS SMALL COMPANY STOCK FUND

GOAL

Seeks to provide long-term capital appreciation.

STRATEGY

The Fund pursues its investment objective by investing at least 65% of its
assets in a diversified portfolio of stocks of small-sized U.S. companies which
are either listed on the New York or American Stock Exchange or Nasdaq, or trade
in the over-the-counter market and which, in the opinion of the Fund's adviser,
have potential to become significant factors in their respective industries in
terms of market Share. The Fund seeks to invest primarily in companies whose
market capitalizations are less than $1.2 billion. In selecting securities, the
investment adviser uses the "value" style of investing described on the previous
page with respect to Riggs Stock Fund. The adviser may sell a portfolio security
if it determines that the issuer's prospects have deteriorated or if it finds an
attractive security which it deems to have superior risk and return
characteristics to a security held by the Fund.

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Riggs Small Company Stock Fund as of the calendar
year-end for each of three years.

The `y' axis reflects the "% Total Return" beginning with "-20%" and increasing
in increments of 20% up to 40%.

The `x' axis represents calculation periods from 1996 through the calendar year
ended 1998. The light gray shaded chart features three distinct vertical bars,
each shaded in charcoal, and each visually representing by height the total
return percentages for the calendar year stated directly at its base. The
calculated total return percentage for the Fund for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1996 through
1998. The percentages noted are:

21.92%, 38.90%, and -10.44% respectively.

THE TOTAL RETURNS SHOWN HERE ARE FOR CLASS R SHARES WHICH IS ANOTHER CLASS OF
SHARES OFFERED BY SMALL COMPANY STOCK FUND. CLASS R SHARES ARE NOT OFFERED IN
THIS PROSPECTUS. THE TOTAL RETURNS FOR CLASS R SHARES ARE DISCLOSED HERE BECAUSE
CLASS Y SHARES HAVE ONLY BEEN OFFERED SINCE DECEMBER 13, 1999. THESE TOTAL
RETURNS WOULD BE SUBSTANTIALLY SIMILAR TO THE ANNUAL RETURNS FOR CLASS Y SHARES
OVER THE SAME PERIOD AND WOULD DIFFER ONLY TO THE EXTENT THAT THE TWO CLASSES DO
NOT HAVE THE SAME EXPENSES.

IT IS ANTICIPATED THAT EXPENSES OF CLASS Y SHARES WILL NOT EXCEED THOSE OF THE
CLASS R SHARES. THE BAR CHART SHOWS THE VARIABILITY OF THE FUND'S CLASS R SHARES
TOTAL RETURNS ON A CALENDAR YEAR-END BASIS.

THE FUND'S CLASS R SHARES TOTAL RETURN FOR THE NINE-MONTH PERIOD FROM
JANUARY 1, 1999 TO SEPTEMBER 30, 1999 WAS 9.38%.

WITHIN THE PERIOD SHOWN IN THE CHART, THE FUND'S CLASS R SHARES HIGHEST
QUARTERLY RETURN WAS 23.16% (QUARTER ENDED SEPTEMBER 30, 1997). ITS LOWEST
QUARTERLY RETURN WAS (29.19)% (QUARTER ENDED SEPTEMBER 30, 1998).

<PAGE>

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Class R Shares Average Annual Total
Returns for the calendar periods ended December 31, 1998. The table shows the
Fund's Class R Shares total returns averaged over a period of years relative to
the Russell 2000 Index ("Russell 2000"), a broad-based market index. The Russell
2000 Index is unmanaged, and it is not possible to invest directly in an index.

- --------------------------------------------------------
CALENDAR PERIOD CLASS R RUSSELL
SHARES 2000

- --------------------------------------------------------
- --------------------------------------------------------
1 Year (11.)% (2.55)%
- --------------------------------------------------------
- --------------------------------------------------------
Start of Performance1 17.6% 15.78%
- --------------------------------------------------------
1 The Fund's Class R Shares start of performance date was February 27, 1995.

RIGGS U.S. GOVERNMENT SECURITIES FUND

GOAL

Seeks to achieve current income.

STRATEGY

The Fund pursues its investment objective by investing at least 65% of its
assets in U.S. Treasury and government agency securities. The Fund may also
invest in non-governmental debt securities, such as investment grade debt
securities issued by corporations or banks, and in privately issued
collateralized mortgage obligations. The adviser uses a broad, overall analysis
of the U.S. credit markets as a basis for its selection of portfolio securities.
In so doing, it assesses a variety of factors, including the current and
expected U.S. economic growth, interest rates and inflation rates. Under
ordinary market conditions, the Fund's duration, as determined by the adviser,
will be within 80% to 120% of the duration of the Merrill Lynch U.S. Government
Master Index. The adviser may sell a portfolio security if it determines that
the issuer's prospects have deteriorated or if it finds an attractive security
which it deems to have superior risk and return characteristics to a security
held by the Fund.

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Riggs U.S. Government Securities Fund as of the calendar
year-end for each of six years.

The `y' axis reflects the "% Total Return" beginning with "-5%" and increasing
in increments of 5% up to 20%.

11.06%, -4.39%, 17.28%, 1.81%, 8.63% and 8.88% respectively.

THE TOTAL RETURNS SHOWN HERE ARE FOR CLASS R SHARES WHICH IS ANOTHER CLASS OF
SHARES OFFERED BY U.S. GOVERNMENT SECURITIES FUND. CLASS R SHARES ARE NOT
OFFERED IN THIS PROSPECTUS. THE TOTAL RETURNS FOR CLASS R SHARES ARE DISCLOSED
HERE BECAUSE CLASS Y SHARES HAVE ONLY BEEN OFFERED SINCE DECEMBER 13, 1999.
THESE TOTAL RETURNS WOULD BE SUBSTANTIALLY SIMILAR TO THE ANNUAL RETURNS FOR
CLASS Y SHARES OVER THE SAME PERIOD AND WOULD DIFFER ONLY TO THE EXTENT THAT THE
TWO CLASSES DO NOT HAVE THE SAME EXPENSES.

THE TOTAL RETURNS DISPLAYED FOR THE FUND'S CLASS R SHARES DO NOT REFLECT THE
PAYMENT OF ANY SALES CHARGES OR RECURRING SHAREHOLDER ACCOUNT FEES. IF THESE
CHARGES OR FEES HAD BEEN INCLUDED, THE RETURNS SHOWN WOULD HAVE BEEN LOWER. THE
FUND'S CLASS R SHARES TOTAL RETURN FOR THE NINE-MONTH PERIOD FROM JANUARY 1,
1999 TO SEPTEMBER 30, 1999 WAS (1.56)%. WITHIN THE PERIOD SHOWN IN THE CHART,
THE FUND'S CLASS R SHARES HIGHEST QUARTERLY RETURN WAS 6.49% (QUARTER ENDED JUNE
30, 1995). ITS LOWEST QUARTERLY RETURN WAS (3.03)% (QUARTER ENDED MARCH 31,
1994).

<PAGE>

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Class R Shares Average Annual Total
Returns for the calendar periods ended December 31, 1998. The table shows the
Fund's Class R Shares total returns averaged over a period of years relative to
the Lehman Brothers Government/Corporate (Total) Index ("LBGCTI"), a broad based
market index. The LBGCTI is unmanaged, and it is not possible to invest directly
in an index.

- -------------------------------------------------------
CALENDAR PERIOD CLASS LBGCTI

- -------------------------------------------------------
- -------------------------------------------------------
1 Year 6.88% 9.47%
- -------------------------------------------------------
- -------------------------------------------------------
5 Years 5.89% 7.30%
- -------------------------------------------------------
- -------------------------------------------------------
Start of Performance1 7.43% 8.42%
- -------------------------------------------------------
1 THE FUND'S START OF PERFORMANCE DATE WAS MAY 11, 1992.

RIGGS PRIME MONEY MARKET FUND

GOAL

Seeks to provide current income consistent with stability of principal and
liquidity.

STRATEGY

The Fund pursues its investment objective by investing exclusively in a
portfolio of corporate, municipal, U.S. government and other money market
instruments (high-quality, short-term debt securities) maturing in 397 days or
less. The dollar-weighted average maturity of the Fund's portfolio will be 90
days or less. The securities in which the Fund invests must be rated in the
highest short-term category by two recognized rating services or be of
comparable quality to securities having such ratings. The adviser uses a broad,
overall analysis of the U.S. credit markets as a basis for its selection of
portfolio securities. In so doing, it assesses a variety of factors including
the current and expected U.S. economic growth, interest rates and inflation
rates.

RISK/RETURN BAR CHART AND TABLE

[CHART GOES HERE]

HISTORICALLY, THE FUND HAS MAINTAINED A CONSTANT $1.00 NET ASSET VALUE PER
SHARE. THE BAR CHART SHOWS THE VARIABILITY OF THE FUND'S CLASS Y SHARES TOTAL
RETURNS ON A CALENDAR YEAR-END BASIS. THE FUND'S SHARES ARE SOLD WITHOUT A SALES
CHARGE (LOAD). THE TOTAL RETURNS DISPLAYED ABOVE ARE BASED UPON NET ASSET VALUE.

THE FUND'S TOTAL RETURN FOR THE NINE-MONTH PERIOD FROM JANUARY 1, 1999 TO
SEPTEMBER 30, 1999 WAS 3.34%.

WITHIN THE PERIOD SHOWN IN THE CHART, THE FUND'S CLASS Y SHARES HIGHEST
QUARTERLY RETURN WAS 1.43% (QUARTER ENDED JUNE 30, 1995). ITS LOWEST QUARTERLY
RETURN WAS 0.72% (QUARTER ENDED DECEMBER 31, 1993). AVERAGE ANNUAL TOTAL RETURN
TABLE The following table represents the Fund's Class Y Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

- -------------------------------------------------
CALENDAR PERIOD CLASS

- -------------------------------------------------
- -------------------------------------------------
1 Year 4.99%
- -------------------------------------------------
- -------------------------------------------------
5 Years 5.00%
- -------------------------------------------------
- -------------------------------------------------
Start of Performance1 4.59%

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

1 THE FUND'S CLASS Y SHARES START OF PERFORMANCE DATE WAS SEPTEMBER 17, 1991.
THE FUND'S CLASS Y SHARES 7-DAY NET YIELDS AS OF DECEMBER 31, 1998 WAS
4.66%. YOU MAY CALL THE FUND AT (202) 835-5300 OR OUTSIDE THE WASHINGTON
D.C. METROPOLITAN AREA TOLL-FREE AT 1-800-934-3883 FOR THE CURRENT 7-DAY
NET YIELD.

PAST PERFORMANCE DOES NOT NECESSARILY PREDICT FUTURE PERFORMANCE. THIS
INFORMATION PROVIDES YOU WITH HISTORICAL PERFORMANCE INFORMATION SO THAT YOU CAN
ANALYZE WHETHER THE FUND'S INVESTMENT RISKS ARE BALANCED BY ITS POTENTIAL
RETURNS.

RIGGS U.S. TREASURY MONEY MARKET FUND

GOAL

Seeks to provide current income consistent with stability of principal and
liquidity.

STRATEGY

The Fund pursues its investment objective by investing only in a portfolio of
short-term U.S. Treasury obligations maturing in 397 days or less and repurchase
agreements fully collateralized by U.S. Treasury obligations. The
dollar-weighted average maturity of the Fund's portfolio will be 90 days or
less. U.S. Treasury obligations are issued by the U.S. government, and are fully
guaranteed as to payment of principal and interest by the United States. The
adviser uses a broad, overall analysis of the U.S. credit markets as a basis for
its selection of portfolio securities. In doing so, it assesses a variety of
factors, including the current and expected U.S. economic growth interest rates
and inflation rates.

RISK/RETURN BAR CHART AND TABLE

[CHART GOES HERE]

THE FUND'S TOTAL RETURN FOR THE NINE-MONTH PERIOD FROM JANUARY 1, 1999 TO
SEPTEMBER 30, 1999 WAS 3.10%.

WITHIN THE PERIOD SHOWN IN THE CHART, THE FUND'S CLASS Y SHARES HIGHEST
QUARTERLY RETURN WAS 1.38% (QUARTER ENDED JUNE 30, 1995). ITS LOWEST QUARTERLY
RETURN WAS 0.64% (QUARTER ENDED DECEMBER 31, 1993). AVERAGE ANNUAL TOTAL RETURN
TABLE The following table represents the Fund's Class Y Shares Average Annual
Total Returns for the calendar periods ended December 31, 1998.

- --------------------------------------------
CALENDAR PERIOD CLASS

- --------------------------------------------
- --------------------------------------------
1 Year 4.75%
- --------------------------------------------
- --------------------------------------------
5 Years 4.71%
- --------------------------------------------
- --------------------------------------------
Start of Performance1 4.23%

- --------------------------------------------
1 THE FUND'S CLASS Y SHARES START OF PERFORMANCE DATE WAS OCTOBER 8, 1991. THE
FUND'S CLASS Y SHARES 7-DAY NET YIELDS AS OF DECEMBER 31, 1998 WAS 4.20%.

YOU MAY CALL THE FUND AT (202) 835-5300 OR OUTSIDE THE WASHINGTON D.C.
METROPOLITAN AREA TOLL-FREE AT 1-800-934-3883 FOR THE CURRENT 7-DAY NET YIELD.

<PAGE>

PRINCIPAL RISKS OF THE FUNDS

SET FORTH BELOW ARE RISKS SPECIFIC TO AN INVESTMENT IN A PARTICULAR FUND, OR
FUNDS. FOR MORE INFORMATION ON THESE RISKS, SEE "SPECIFIC RISKS OF INVESTING IN
THE FUNDS." In addition, all Funds are subject to the risk that a Fund's Share
price may decline and an investor could lose money. Thus, although the Prime
Money Market Fund and the Treasury Money Market Fund seek to preserve the value
of your investment at $1.00 per Share, it is possible to lose money by investing
in any of the Riggs Funds. Also, there is no assurance that a Fund will achieve
its investment objective.

- ------------------------------- ------------ ----------- ------------ ----------- -----------
RISKS STOCK FUND SMALL U.S. PRIME U.S.
COMPANY GOVERNMENT MONEY TREASURY
STOCK FUND SECURITIES MARKET MONEY
FUND FUND MARKET

FUND
<S> <C> <C> <C> <C> <C>
- ------------------------------- ------------ ----------- ------------ ----------- -----------
STOCK MARKET RISKS (1) o o

- ------------------------------- ------------ ----------- ------------ ----------- -----------
LIQUIDITY RISKS (2) o

- ------------------------------- ------------ ----------- ------------ ----------- -----------
RISKS RELATED TO INVESTING o o
FOR VALUE (3)

- ------------------------------- ------------ ----------- ------------ ----------- -----------
RISKS RELATED TO COMPANY SIZE o

(4)

- ------------------------------- ------------ ----------- ------------ ----------- -----------
CREDIT RISKS (5) o o

(1) The value of equity securities rise and fall.

(2) Limited trading opportunities for certain securities and the inability to
sell a security at will could result in losses to a Fund. (3) Value stocks
depend less on price changes for returns and may lag behind growth stock in an
up market. (4) The smaller the capitalization of a company, the less liquid its
stock and the more volatile its price. Companies with smaller market
capitalizations also tend to have

unproven track records and are more likely to fail than companies with
larger market capitalizations. (5) An issuer may possibly default on a security
by failing to pay interest or principal when due. (6) Prices of fixed income
securities rise and fall in response to interest rate changes.

(7) When interest rates decline, unscheduled prepayments of principal could
accelerate and require the Fund to reinvest the proceeds of the prepayments
at lower interest rates.

(8) Because a Fund may allocate relatively more assets to certain sectors than
others, a Fund's performance may be more susceptible to any developments
which affect those sectors emphasized by a Fund. In addition, because
companies providing credit enhancement with regard to the Prime Money Market
Fund's securities may be concentrated in certain industry sectors, the
creditworthiness of the Prime Money Market Fund's securities may be
adversely affected by developments which adversely affect such sectors.

<PAGE>

WHAT ARE THE FUND'S FEES AND EXPENSES?

RIGGS STOCK FUND, RIGGS SMALL COMPANY STOCK FUND, RIGGS U.S. GOVERNMENT
SECURITIES FUND, RIGGS PRIME MONEY MARKET FUND AND RIGGS U.S. TREASURY MONEY
MARKET CLASS Y SHARES

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold Shares of the Stock Fund, Small Company Stock Fund, U.S. Government
Securities Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund.

SHAREHOLDER FEES STOCK SMALL U.S. PRIME U.S.
FUND COMPANY GOVERNMENT MONEY TREASURY

STOCK SECURITIES MARKETMONEY
FUND FUND FUND MARKET

FUND

FEES PAID DIRECTLY FROM YOUR INVESTMENT
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a None None None None None
percentage of offering price)
Maximum Deferred Sales Charge (Load) (as a percentage of None None None None None
original purchase price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None None None
(and other Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if None None None None None
applicable)
Exchange Fee None None None None None

ANNUAL FUND OPERATING EXPENSES (Before Waivers)1
EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS (AS A PERCENTAGE
OF AVERAGE NET ASSETS)

Management Fee 0.75% 0.80% 0.75% 2 0.50% 0.50%
Distribution (12b-1) Fee None None None None None
Shareholder Services Fee 3 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.29% 0.45% 4 0.36% 4 0.19% 0.22%
4

Total Annual Fund Operating Expenses (Before Waivers)1 1.29% 1.50% 1.36% 0.94%
0.97% 1 Although not contractually obligated to do so, the Adviser and
shareholder services

provider voluntarily waived certain amounts. These are shown below along with
the net expenses the Funds ACTUALLY PAID for the fiscal year ended April 30,
1999. The Stock Fund, Small Company Stock Fund, and U.S. Government Securities
Fund reflect expenses expected to be paid for the fiscal year ending April 30,
2000.

Total Waivers of Fund Expenses 0.15% 0.15% 0.55% 0.25% 0.25%
Total Annual Fund Operating Expenses (after waivers ) 1.14% 1.35% 0.81% 0.69% 0.72%

</TABLE>

2 The Adviser voluntarily waived a portion of the management fee. The Adviser
can terminate this voluntary waiver at any time. The management fee paid by
the U.S. Government Securities Fund (after voluntary waiver) was 0.35% for the
fiscal year ended April 30, 1999.

3 The shareholder services provider voluntarily waived a portion of the Class Y
Shares shareholder services fee. The shareholder services provider can
terminate this voluntary waiver at any time. The shareholder services fee paid
by U.S. Treasury Money Market Fund and Prime Money Market Fund, was 0.00% and
0.00%, respectively for the fiscal year ended April 30, 1999. It is
anticipated that the shareholder services fee will be 0.10% for the U.S.
Government Securities Fund, Stock Fund, and Small Company Stock Fund for the
fiscal year ending April 30, 1999.

4 Other expenses for the Stock Fund, Small Company Stock Fund, and U.S.
Government Securities Fund are based on estimated amounts for the fiscal year
ending April 30, 2000.

<PAGE>

EXAMPLE

This Example is intended to help you compare the cost of investing in a Funds'
Class Y Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in a Fund's Class Y Shares for the
time periods indicated and then redeem all of your Shares at the end of those
periods. Expenses assuming no redemption are also shown. The Example also
assumes that your investment has a 5% return each year and that a Funds' Class Y
Shares operating expenses are BEFORE WAIVERS as estimated in the table and
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be: CLASS Y SHARES 1 YEAR 3 YEARS 5 YEAR10
YEARS

STOCK FUND

Expenses assuming redemption $131 $409 $708 $1556
Expenses assuming no $131 $409 $708 $1556
redemption
SMALL COMPANY STOCK FUND

Expenses assuming redemption $153 $474 $818 $1791
Expenses assuming no $153 $474 $818 $1791
redemption
U.S. GOVERNMENT SECURITIES
FUND

Expenses assuming redemption $138 $431 $745 $1635
Expenses assuming no $138 $431 $745 $1635
redemption
PRIME MONEY MARKET FUND

Expenses assuming redemption $96 $300 $520 $1,155
Expenses assuming no $96 $300 $520 $1,155
redemption
U.S. TREASURY MONEYMARKET
FUND

Expenses assuming redemption $99 $309 $536 $1,190
Expenses assuming no $99 $309 $536 $1,190
redemption

PRINCIPAL SECURITIES IN WHICH THE FUNDS INVEST

EQUITY SECURITIES

Equity securities held represent a Share of an issuer's earnings and assets,
after the issuer pays its liabilities. The Funds cannot predict the income they
will receive from equity securities because issuers generally have discretion as
to the payment of any dividends or distributions. However, equity securities
offer greater potential for appreciation than many other types of securities,
because their value increases directly with the value of the issuer's business.

The following describes the principal type of equity security in which a Fund
may invest.

COMMON STOCKS

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

FIXED INCOME SECURITIES

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

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

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

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of
the United States. Treasury securities held by the Funds are generally
regarded as having the lowest credit risks.

AGENCY SECURITIES

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

The Funds treat mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it
does not reduce the market and prepayment risks of these mortgage backed
securities.

CORPORATE DEBT SECURITIES

Corporate debt securities are fixed income securities issued by
businesses. Notes, bonds, debentures and commercial paper are the most
prevalent types of corporate debt securities. A Fund may also purchase
interests in bank loans to companies. The credit risks of corporate debt
securities vary widely among issuers. In addition, the credit risk of an
issuer's debt security may vary based on its priority for repayment. For
example, higher ranking (senior) debt securities have a higher priority
than lower ranking (subordinated) securities. This means that the issuer
might not make payments on subordinated securities while continuing to
make payments on senior securities. In addition, in the event of
bankruptcy, holders of senior securities may receive amounts otherwise
payable to the holders of subordinated securities. Some subordinated
securities, such as trust preferred and capital securities notes, also
permit the issuer to defer payments under certain circumstances. For
example, insurance companies issue securities known as surplus notes
that permit the insurance company to defer any payment that would reduce
its capital below regulatory requirements.

COMMERCIAL PAPER

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

DEMAND INSTRUMENTS

Demand instruments are corporate debt securities that the issuer
must repay upon demand. Other demand instruments require a third
party, such as a dealer or bank, to repurchase the security for
its face value upon demand. The Funds treat demand instruments as
short-term securities, even though their stated maturity may
extend beyond one year.

MUNICIPAL SECURITIES

Municipal securities are issued by states, counties, cities and other
political subdivisions and authorities. Although many municipal
securities are exempt from federal income tax, the Fund may invest in
taxable municipal securities.

<PAGE>

MORTGAGE BACKED SECURITIES

The mortgage backed securities represent interests in pools of
mortgages. The mortgages that comprise a pool normally have similar
interest rates, maturities and other terms. Mortgages may have fixed or
adjustable interest rates. Interests in pools of adjustable rate
mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have
extremely complicated terms. The simplest form of mortgage backed
securities are pass-through certificates. An issuer of pass-through
certificates gathers monthly payments from an underlying pool of
mortgages. Then, the issuer deducts its fees and expenses and passes the
balance of the payments onto the certificate holders once a month.
Holders of pass-through certificates receive a pro rata share of all
payments and pre-payments from the underlying mortgages. As a result,
the holders assume all the prepayment risks of the underlying mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

CMOs, including interests in real estate mortgage investment
conduits (REMICs), allocate payments and prepayments from an
underlying pass-through certificate among holders of different
classes of mortgage backed securities. This creates different
prepayment and interest rate risks for each CMO class. The degree
of increased or decreased prepayment risks depends upon the
structure of the CMOs. However, the actual returns on any type of
mortgage backed security depend upon the performance of the
underlying pool of mortgages, which no one can predict and will
vary among pools.

SEQUENTIAL CMOS

In a sequential pay CMO, one class of CMOs receives all
principal payments and prepayments. The next class of CMOs
receives all principal payments after the first class is
paid off. This process repeats for each sequential class
of CMO. As a result, each class of sequential pay CMOs
reduces the prepayment risks of subsequent classes. The
degree of increased or decreased prepayment risks depends
upon the structure of the CMOs.

BANK INSTRUMENTS

Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Yankee instruments are denominated in U.S. dollars and
issued by U.S. branches of foreign banks. Eurodollar instruments are denominated
in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees
to pay amounts due on a fixed income security if the issuer defaults. In
some cases the company providing credit enhancement makes all payments
directly to the security holders and receives reimbursement from the
issuer. Normally, the credit enhancer has greater financial resources
and liquidity than the issuer. For this reason, the Adviser usually
evaluates the credit risk of a fixed income security based solely upon
its credit enhancement.

Common types of credit enhancement include guarantees, letters of
credit, bond insurance and surety bonds. Credit enhancement also
includes arrangements where securities or other liquid assets secure
payment of a fixed income security. If a default occurs, these assets
may be sold and the proceeds paid to security's holders. Either form of
credit enhancement reduces credit risks by providing another source of
payment for a fixed income security.

TAX EXEMPT SECURITIES

Tax exempt securities are fixed income securities that pay interest that is not
subject to regular federal income taxes. Typically, states, counties, cities and
other political subdivisions and authorities issue tax exempt securities. The
market categorizes tax exempt securities by their source of repayment.

VARIABLE RATE DEMAND INSTRUMENTS

Variable rate demand instruments are tax exempt securities that require
the issuer or a third party, such as a dealer or bank, to repurchase the
security for its face value upon demand. The securities also pay
interest at a variable rate intended to cause the securities to trade at
their face value. The Fund treats demand instruments as short-term
securities, because their variable interest rate adjusts in response to
changes in market rates, even though their stated maturity may extend
beyond thirteen months.

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. A Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the adviser.

A Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risks.

INVESTMENT RATINGS FOR PRIME MONEY MARKET FUND

The securities in which the Prime Money Market Fund invests must be rated in the
highest short-term category by two recognized rating services or be of
comparable equality to securities having such ratings.

INVESTMENT RATINGS FOR CORPORATE FIXED INCOME SECURITIES

The Adviser will determine whether a security is investment grade based upon the
credit ratings given by one or more nationally recognized rating services. For
example, Standard and Poor's, a rating service, assigns ratings to securities
(AAA, AA, A, BBB and below) based on their assessment of the likelihood of the
issuer's inability to pay interest or principal (default) when due on each
security. Lower credit ratings correspond to higher credit risk. If a security
has not received a rating, a Fund must rely entirely upon the Adviser's credit
assessment that the security is comparable to a rated security.

If a security is downgraded below the minimum quality grade discussed in a
Fund's investment strategy, the adviser will reevaluate the security, but will
not be required to sell it.

PORTFOLIO TURNOVER

The U.S. Government Securities Fund, Stock Fund and Small Company Stock Fund
actively trades their portfolio securities in an attempt to achieve their
investment objectives. Active trading will cause a Fund to have an increased
portfolio turnover rate, which is likely to generate shorter-term gains (losses)
for its Shareholders, which are taxed at a higher rate than longer-term gains
(losses). Actively trading portfolio securities increases a Fund's trading costs
and may have an adverse impact on a Fund's performance.

TEMPORARY DEFENSIVE INVESTMENTS

The U.S. Government Securities Fund, Stock Fund and Small Company Stock Fund may
temporarily depart from their principal investment strategy by investing their
assets in cash and shorter-term debt securities and similar obligations. The
Funds may do this to minimize potential losses and maintain liquidity to meet
Shareholder redemptions during adverse market conditions. This may cause the
Funds to give up greater investment returns to maintain the safety of principal,
that is, the original amount invested by Shareholders. Temporary investments
will be of comparable quality to other securities in which the Funds invest.

SPECIFIC RISKS OF INVESTING IN THE FUNDS

STOCK MARKET RISKS

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

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

LIQUIDITY RISKS - FIXED INCOME SECURITIES

o Trading opportunities are more limited for fixed income securities that
have not received any credit ratings, have received ratings below
investment grade or are not widely held.

o Trading opportunities are more limited for CMOs that have complex terms or
that are not widely held. These features may make it more difficult to sell
or buy a security at a favorable price or time. Consequently, the Fund may
have to accept a lower price to sell a security, sell other securities to
raise cash or give up an investment opportunity, any of which could have a
negative effect on the Fund's performance. Infrequent trading of securities
may also lead to an increase in their price volatility.

O Liquidity risk also refers to the possibility that the Fund may not be able
to sell a security when it wants to. If this happens, the Fund will be
required to continue to hold the security or keep the position open, and the
Fund could incur losses.

LIQUIDITY RISKS - EQUITY SECURITIES

Trading opportunities are more limited for equity securities that are
not widely held. This may make it more difficult to sell or buy a security at
a favorable price or time. Consequently, a Fund may have to accept a lower
price to sell a security, sell other securities to raise cash or give up an
investment opportunity, any of which could have a negative effect on a Fund's
performance. Infrequent trading of securities may also lead to an increase in
their price volatility.

Liquidity risk also refers to the possibility that a Fund may not be
able to sell a security when it wants to. If this happens, a Fund will be
required to continue to hold the security and a Fund could incur losses.

RISKS RELATED TO INVESTING FOR VALUE

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

RISKS RELATED TO COMPANY SIZE

o Generally, the smaller the market capitalization of a company, the fewer the
number of Shares traded daily, the less liquid its stock and the more
volatile its price. Market capitalization is determined by multiplying the
number of its outstanding Shares by the current market price per Share.

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

CREDIT RISKS

o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, a
Fund will lose money.

<PAGE>

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not
received a rating, a Fund must rely entirely upon the Adviser's credit
assessment.

o Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable maturity
(the spread) measures the additional interest paid for risk. Spreads may
increase generally in response to adverse economic or market conditions. A
security's spread may also increase if the security's rating is lowered, or
the security is perceived to have an increased credit risk. An increase in
the spread will cause the price of the security to decline.

o Credit risk includes the possibility that a party to a transaction involving
a Fund will fail to meet its obligations. This could cause a Fund to lose the
benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.

INTEREST RATE RISKS

o Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates
rise, prices of fixed income securities fall. However, market factors, such
as the demand for particular fixed income securities, may cause the price of
certain fixed income securities to fall while the prices of other securities
rise or remain unchanged.

o Interest rate changes have a greater effect on the price of fixed income
securities with longer durations.

PREPAYMENT RISKS

o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate
mortgages when mortgage rates fall. This results in the prepayment of
mortgage backed securities with higher interest rates. Conversely,
prepayments due to refinancings decrease when mortgage rates increase. This
extends the life of mortgage backed securities with lower interest rates.
Other economic factors can also lead to increases or decreases in
prepayments. Increases in prepayments of high interest rate mortgage backed
securities, or decreases in prepayments of lower interest rate mortgage
backed securities, may reduce their yield and price. These factors,
particularly the relationship between interest rates and mortgage
prepayments, makes the price of mortgage backed securities held by a Fund
more volatile than many other types of fixed income securities with
comparable credit risks.

o Mortgage backed securities generally compensate for greater prepayment risk
by paying a higher yield. The difference between the yield of a mortgage
backed security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk.
Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security is
perceived to have an increased prepayment risk or perceived to have less
market demand. An increase in the spread will cause the price of the
security to decline.

o The Fund may have to reinvest the proceeds of mortgage prepayments in other
fixed income securities with lower interest rates, higher prepayment risks,
or other less favorable characteristics.

SECTOR RISKS

o A substantial part of the Fund's portfolio may be comprised of securities
issued or credit enhanced by companies in similar businesses or with other
similar characteristics. As a result, the Fund will be more susceptible to
any economic, business, political, or other developments which generally
affect these issuers.

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

WHAT DO SHARES COST?

You can purchase, redeem, or exchange Shares any day the New York Stock Exchange
(NYSE) is open. When a Fund receives your transaction request in proper form (as
described in the prospectus) it is processed at the next calculated net asset
value (NAV). The Funds do not charge a front-end sales charge. The NAV for the
Stock Fund, Small Company Stock Fund and U.S. Government Securities Fund is
determined at the end of regular trading (normally 4:00 p.m. Washington, D.C.
time) each day the NYSE is open. The NAV for the Prime Money Market Fund and
U.S. Treasury Money Market Fund (together, the Money Market Funds) is determined
at 12:00 noon and 4:00 p.m. (Washington, D.C.

time).

A Fund's NAV is determined as follows: The Money Market Funds attempt to
stabilize the NAV of their Shares at $1.00 by valuing the portfolio securities
at amortized cost. The Money Market Funds cannot guarantee that their NAVs will
always remain at $1.00 per Share. Equity securities are generally valued at the
last sale price in the market in which they are primarily traded (either a
national securities exchange or the over-the-counter market). Fixed income
securities are valued at the last sale price on a national securities exchange,
if available, and otherwise, as determined by an independent pricing service. A
Fund values short-term obligations according to the mean between bid and asked
prices as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as determined
in good faith by the Board.

The minimum initial investment in each Fund is $100,000. Subsequent investments
must be in amounts of at least $____. An investor's minimum investment will be
calculated by combining all mutual fund accounts it maintains in the Riggs
Funds.

The minimum investment required may be waived for purchases by employees or
retirees of the Riggs National Corporation and/or its subsidiaries, and their
spouses and children under the age of 21. The minimum investment may also be
waived for investors participating in a payroll deduction program. Keep in mind
that investment professionals may charge you fees for their services in
connection with your Share transactions.

HOW ARE THE FUNDS SOLD?

U.S. Government Securities Fund, Prime Money Market Fund and U.S. Treasury Money
Market Fund offer Class R Shares and Class Y Shares; and Stock Fund and Small
Company Stock Fund offer Class R Shares, Class B Shares and Class Y Shares. Each
class represents interests in a single portfolio of securities. This prospectus
relates only to Class Y Shares. Each Share class has different expenses which
affect their performance. Class R Shares are subject to a 0.25% Rule 12b-1 fee
(0.50% in the case of Prime Money Market Fund and U.S. Treasury Money Market
Fund), and a 0.25% Shareholder services fee, and impose a 2% CDSC. Class B
Shares are subject to a 0.75% Rule 12b-1 fee and a 0.25% Shareholder services
fee, and impose a (maximum) 5% CDSC. For more information concerning Class R
Shares or Class B Shares, contact Riggs Investment Corp. at (202) 835-5300 or
outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

The Funds' Distributor, Federated Securities Corp., markets the Shares described
in this prospectus. Class Y Shares of the Funds are sold primarily to trusts,
fiduciaries and institutions, and to persons and entities ("Class A
Shareholders") who held Class Y Shares (formerly known as "Class A Shares") of
U.S. Treasury Money Market Fund and Prime Money Market Fund (together, the
"Money Market Funds") on June 30, 1998.

HOW TO PURCHASE SHARES

You may purchase Shares through Riggs Investment Corp. or Riggs Bank, or
through an exchange from another Riggs Fund. The Funds reserve the right to
reject any request to purchase or exchange Shares.

THROUGH RIGGS INVESTMENT CORP.

To place an order to purchase Shares of a Fund, an investor may write to or
call Riggs Investment Corp. at (202) 835-5300 or outside the Washington, D.C.
metropolitan area toll-free at 1-800-934-3883. Representatives are available
from 8:30 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 Bank. With
respect to U.S. Treasury Money Market Fund and Prime Money Market Fund, purchase
orders must be received by Riggs Investment Corp. before 11:00 a.m. (Washington,
D.C. time). Payment is normally required on the same business day. With respect
to Stock Fund, Small Company Stock Fund and U.S. Government Securities Fund,
purchase orders must be received by Riggs Investment Corp. before 4:00 p.m.
(Washington, D.C. time). Payment is normally required on the next business day.

BY WIRE

To purchase Shares of a Fund by wire, call the number on the front page of this
prospectus.

With respect to Prime Money Market Fund and U.S. Treasury Money Market
Fund, payment by wire must be received by Riggs Investment Corp. 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 Stock Fund, Small Company Stock Fund and
U.S. Government Securities Fund, payment by wire must be received by Riggs
Investment Corp. before 3:00 p.m. (Washington, D.C. time) on the next business
day after placing the order. You cannot purchase Shares by wire on holidays when
wire transfers are restricted.

BY CHECK

Make your check payable to RIGGS FUNDS, note the name of the Fund and the Share
class on the check, and mail it to:

Riggs Investment Corp.
P.O. Box 96656
Washington, D.C. 20090-6656

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Riggs Investment Corp.
808 17th Street, N.W. - 11th Floor

Washington, D.C. 20006

Orders received by mail are considered received after payment by check is
converted by Riggs Bank into federal funds. This is normally the next business
day.

THROUGH AUTOMATIC INVESTING PROGRAMS OFFERED THROUGH RIGGS BANK

If you were a holder of Class Y Shares of a Money Market Fund at December 31,
1999, you may establish an account with Riggs Investment Corp., or Riggs Bank to
automatically purchase Class Y Shares of Prime Money Market Fund or U.S.
Treasury Money Market Fund when your bank account reaches a certain level.
Prospective investors in an Automatic Investing Program should refer to the
Riggs Investment Corp. or Riggs Bank Service Agreement for details regarding the
services, fees, restrictions, and limitations related to the Automatic
Investment Program. You should read this prospectus along with the Service
Agreement.

BY SYSTEMATIC INVESTMENT PROGRAM

If you were a holder of Class Y Shares of a Money Market fund at December 31,
1999 you may add to your 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 or an account in one
of the Riggs Funds and invested in Fund Shares at the net asset value next
determined after an order is received. Shareholders may apply for participation
in this program through Riggs Investment Corp., Riggs Bank or an authorized
broker or dealer.

Due to the nature of the Automatic Investing Programs, systematic investment
privileges are unavailable to participants in these programs.

BY AUTOMATED CLEARING HOUSE (ACH)

If you were a holder of Class Y Shares of a Money Market Fund at December 31,
1999 you may purchase additional Shares through a depository institution that is
an ACH member. This purchase option can be established by completing the
appropriate sections of the New Account Form.

THROUGH RIGGS FUNDS ONLINE SM

If you were a holder of Class Y Shares of a Money Market Fund at December 31,
1999 you may purchase Fund Shares via the Internet through Riggs Funds OnLineSM
at http://www.riggsbank.com. See "Fund Transactions through Riggs Funds OnLine
sm" in the Account and Share Information Section.

RETIREMENT INVESTMENTS

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

HOW TO REDEEM AND EXCHANGE SHARES

Each Fund redeems Class Y Shares at their net asset value (with the exception of
the Money Market Funds, unless the Money Market Fund Shares were acquired in
exchange for Class R Shares or Class B Shares of a Fund which is not a Money
Market Fund) next determined after Riggs Investment Corp. receives the
redemption request.

Redemptions will be made on days on which both the New York Stock Exchange and
Federal Reserve Wire system are open for business. Telephone or written requests
for redemption must be received in proper form by Riggs Bank.

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem or exchange Shares by calling Riggs Investment Corp. An
authorization form permitting a Fund to accept telephone redemption requests
must first be completed. Although Riggs Investment Corp. 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 the Money Market Funds, if you call before 11:00 a.m.
(Washington, D.C. time) your redemption will be wired to you the same day. You
will not receive that day's dividend. If you call after 11:00 a.m. (Washington,
D.C. time) your redemption will be wired to you the following business day. You
will receive that day's dividend.

With respect to the Stock Fund, Small Company Stock Fund and U.S. Government
Securities Fund, if you call before the end of regular trading on the NYSE
(normally 4:00 p.m. Washington, D.C. time) you will receive a redemption amount
based on that day's NAV.

BY MAIL

You may redeem or exchange Shares by mailing a written request to:

Riggs Investment Corp.
P.O. Box 96656
Washington, D.C. 20090-6656

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Riggs Investment Corp.
808 17th Street, N.W. - 11th Floor
Washington, D.C. 20006

All requests must include:

o Fund Name, Share Class and account number;

o amount to be redeemed or exchanged;

o signatures of all Shareholders exactly as registered; and

o IF EXCHANGING, the Fund Name and Share Class, account number and account
registration into which you are exchanging.

SIGNATURE GUARANTEES Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days; or

o if exchanging (transferring) into another fund with a different Shareholder
registration.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a
Federal Reserve System member.

REDEMPTION IN KIND

Although the Funds intend to pay Share redemptions in cash, they reserve the
right to pay the redemption price in whole or in part by a distribution of the
Funds' portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

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

o to allow your purchase to clear;

o during periods of market volatility; or

o when a Shareholder's trade activity or amount adversely impacts the
Funds' ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from a Fund if
those checks are undeliverable and returned to a Fund.

REDEMPTIONS FROM RETIREMENT ACCOUNTS

In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in a Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.

CHECKWRITING

If you were a holder of Class Y Shares of a Money Market Fund at December 31,
1999, and have a minimum balance of $5,000, you can redeem Shares by writing a
check in the amount of at least $100. Shareholders must complete the
checkwriting section of the account application or complete a subsequent
checkwriting application form which can be obtained from Riggs Investment Corp.
The Fund will then provide checks. Checks cannot be used to close a
Shareholder's account. Checkwriting is not permitted with respect to Shares held
in IRA accounts, corporate accounts, or an Automatic Investing Program. For
further information, contact Riggs Funds Shareholder Services at (202) 835-5300
or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

SYSTEMATIC WITHDRAWAL PROGRAM

If you were a holder of Class Y Shares of a Money Market Fund at December 31,
1999, you may automatically redeem Shares in a minimum amount of $50 on a
regular basis. 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 Investment Corp., Riggs Bank or an
authorized broker or dealer. This program may reduce, and eventually deplete,
your account. Payments should not be considered yield or income.

Due to the nature of the Automatic Investment Programs, systematic withdrawal
privileges are not available to participants in those programs.

EXCHANGE PRIVILEGE

A Shareholder may generally exchange Class Y Shares of one Fund for Class Y
Shares of any of the other Funds in the Trust (with the exception of Prime Money
Market Fund) at net asset value by writing to or calling Riggs Funds Shareholder
Services (RFSS).

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.

To execute an order to exchange you must first:

o complete an authorization form permitting the Fund to accept telephone
exchange requests;

o ensure that the account registrations are identical;

o meet any minimum initial investment requirements;

o specify the dollar value or number of Shares to be exchanged; and

o receive a prospectus for the Fund into which you wish to exchange.

An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction.

The Funds may modify or terminate the exchange privilege at any time. The Funds'
management or investment adviser may determine from the amount, frequency and
pattern of exchanges that a Shareholder is engaged in excessive trading that is
detrimental to a Fund and other Shareholders. If this occurs, a Fund may
terminate the availability of exchanges to that Shareholder.

Shareholders may obtain further information on the exchange privilege by calling
RFSS at (202) 835-5300 or outside the Washington, D.C. metropolitan area
toll-free at 1-800-934-3883.

SYSTEMATIC EXCHANGE PROGRAM

If you were a holder of Class Y Shares of a Money Market Fund at December 31,
1999, you may automatically exchange Shares of a predetermined amount on a
monthly, quarterly or annual basis by taking advantage of a systematic exchange
privilege. The minimum amount that may be exchanged is $50. Shareholders
interested in participating in this program should contact RFSS.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Funds will record your telephone instructions. If a Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

The Funds no longer issues Share certificates. If you are redeeming or
exchanging Shares represented by certificates previously issued by a Fund, you
must return the certificates with your written redemption or exchange request.
For your protection, send your certificates by registered or certified mail, but
do not endorse them.

ACCOUNT AND SHARE INFORMATION

FUND TRANSACTIONS THROUGH RIGGS FUNDS ONLINE SM.

If you have previously established an account with the Funds, and have signed
the Riggs Funds OnLineSM Agreement, you may purchase Shares through the Riggs
Funds Internet Site on the World Wide Web (http://www.riggsbank.com) (the Web
Site). You may also check your Fund account balance(s) and historical
transactions through the Web Site. You cannot, however, establish a new Fund
account through the Web Site--you may only establish a new Client account under
the methods described in the How to Purchase Shares section.

Trust customers of Riggs Bank N.A. should contact their account officer for
information on the availability of transactions over the Internet.

You should contact RFSS at (202) 835-5300 or outside the Washington D.C.
metropolitan area toll-free at 1-800-934-3883 to get started. RFSS will provide
instructions on how to create and activate your Personal Identification Number
(PIN). If you forget or lose your PIN number, contact RFSS.

ONLINE CONDITIONS

Because of security concerns and costs associated with maintaining the Web Site,
purchases through the Web Site are subject to the following daily minimum and
maximum transaction amounts:

MINIMUMMAXIMUM

Purchases $____ $_________

Your transactions through the Web Site are effective at the time they are
received by the Fund, and are subject to all of the conditions and procedures
described in this prospectus.

Shareholders may not change their address of record, registration, or wiring
instructions through the Web Site. The Web Site privilege may be modified at any
time, but you will be notified in writing of any termination of the privilege.

ONLINE RISKS

Shareholders that utilize the Web Site for account histories or transactions
should be aware that the Internet is an unsecured, unstable, unregulated and
unpredictable environment. Your ability to use the Web Site for transactions is
dependent upon the Internet and equipment, software, systems, data and services
provided by various vendors and third parties (including telecommunications
carriers, equipment manufacturers, firewall providers and encryption system
providers).

While the Funds and their service providers have established certain security
procedures, the Funds, their distributor and transfer agent cannot assure you
that inquiries or trading activity will be completely secure. There may also be
delays, malfunctions or other inconveniences generally associated with this
medium. There may be times when the Web Site is unavailable for Fund
transactions, which may be due to the Internet or the actions or omissions of
any third party--should this happen, you should consider purchasing, redeeming
or exchanging Shares by another method. The Riggs Funds, its transfer agent,
distributor and RFSS are not responsible for any such delays or malfunctions,
and are not responsible for wrongful acts by third parties, as long as
reasonable security procedures are followed.

CONFIRMATIONS AND ACCOUNT STATEMENTS

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

DIVIDENDS AND CAPITAL GAINS

With respect to the Money Market Funds and U.S. Government Securities Fund,
dividends are declared daily and paid monthly. With respect to the Stock Fund
and Small Company Stock Fund, dividends are declared and paid quarterly. 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.

In addition, the Funds pay any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.

If you purchase Shares just before a Fund declares a dividend or capital gain
distribution, you will pay the full price for the Shares and then receive a
portion of the price back in the form of a taxable distribution, whether or not
you reinvest the distribution in Shares. Therefore, you should consider the tax
implications of purchasing Shares shortly before a Fund declares a dividend or
capital gain.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, accounts may be
closed if redemptions or exchanges cause the account balance to fall below the
minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
The required minimum may be waived for employees or retirees of the Riggs
National Corporation and/or its subsidiaries, employees of any broker/dealer
operating on the premises of Riggs Bank, and their spouses and children under
21.

TAX INFORMATION

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

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

WHO MANAGES THE FUNDS?

The Board of Trustees governs the Funds. The Board selects and oversees the
Adviser, Riggs Bank, N.A. ("Adviser"). The Adviser manages the Funds' assets,
including buying and selling portfolio securities. The Adviser's address is 800
17th Street N.W., Washington, D.C. 20006.

The Adviser has delegated daily management of the Funds assets to the
Sub-Adviser, Riggs Investment Management Corp. ("RIMCO") which is paid by the
Adviser and not by the Funds. The Sub-Adviser's address is: Riggs Investment
Management Corp. 800 17th Street N.W. Washington, D.C. 20006.

Riggs Bank, N.A. is a subsidiary of Riggs National Corporation, a bank
holding company. Riggs Bank, N.A., or its subsidiary Riggs Investment Management
Corp. ("RIMCO"), has advised the Riggs Funds since September 1991, and as of
April 30, 1999, provides investment advice for assets approximating $2.7
billion. Riggs Bank, N.A. has a varied client base of approximately 100 other
relationships including corporate, union and public pension plans, foundations,
endowments and associations.

The Funds' portfolio managers are:

NATHAN REISCHER, is Director and Chief Fixed Income Strategist of RIMCO. He
is responsible for formulating the firm's fixed income investment strategy and
directing management of its fixed income portfolios. Mr. Reischer has more than
20 years of fixed income management experience. He was Director and Senior
Domestic Strategist for Barclays Capital, Inc. in New York from 1995 until
joining RIMCO in 1998. From 1983 to 1994, he served as Fixed Income Portfolio
Manager and Director of Cash Management at GM Investment Management Company in
New York. He brings additional asset/liability management experience having been
a consultant to financial institutions at IMA, Inc. in Seattle, and Vice
President and Manager of the Investment Portfolio Department at Seattle First
National Bank. Mr. Reischer earned his B.B.A. in Economics from the University
of Houston and his M.B.A. from Bernard M. Baruch College. He assumed portfolio
management responsibilities for the U.S. Government Securities Fund in September
1998.

PHILIP D. TASHO, is the Chief Executive Officer and Chief Investment Officer of
RIMCO and served as the manager of the Stock Fund from its inception through
June 1994. Most recently, Mr. Tasho was a Vice President at Shawmut Investment
Advisers in Boston, MA from 1994 to 1995. Prior to that, Mr. Tasho served as a
Managing Director of RIMCO and was a member of the senior management committee
from 1990 to 1994. He also served as a Senior Portfolio Manager for the Sovran
Bank in Bethesda and as Director of Research for the same bank at its Richmond
head office. He started his career as a Trust Investment Officer for the First
American Bank in Washington. Mr. Tasho earned a B.A. in Russian from Grinnel
College and an M.B.A. in Finance and Investments from George Washington
University. He holds a CFA from the Institute of Chartered Financial Analysts.
Mr. Tasho assumed portfolio management responsibility of the Stock Fund and
Small Company Stock Fund in November 1995.

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: Stock Fund and
U.S. Government Securities Fund--0.75%; Small Company Stock Fund--0.80%; and
Prime Money Market Fund and U.S. Treasury Money Market Fund--0.50%. The Adviser
may voluntarily waive a portion of its fee or reimburse the Funds for certain
operating expenses.

YEAR 2000 READINESS

The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or experience other date-related problems. The Year 2000 problem may cause
systems to process information incorrectly and could disrupt businesses, such as
the Funds', that rely on computers.

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

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

Year 2000 problems would also increase the risks of the Funds' investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Funds
may purchase. However, this may be difficult with certain issuers. For example,
funds dealing with foreign service providers or investing in foreign securities
will have difficulty determining the Year 2000 readiness of these entities.

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

<PAGE>

FINANCIAL INFORMATION

FINANCIAL HIGHLIGHTS

The Stock Fund, Small Company Stock Fund and U.S. Government Securities Funds'
fiscal year end is April 30. As this is these Funds' first fiscal year as Class
Y Shares, financial information is not yet available.

The following Financial Highlights will help you understand the financial
performance of the Prime Money Market Fund and U.S. Treasury Money Market Fund
for the past five fiscal years, or since inception, if the life of a Fund is
shorter. Some of the information is presented on a per Share basis. Total
returns represent the rate an investor would have earned (or lost) on an
investment in the Funds, assuming reinvestment of any dividends and capital
gains. This information has been audited by Arthur Andersen LLP whose report,
along with the Funds' audited financial statements, is included in the Annual
Report.

<PAGE>

RIGGS FUNDS
FINANCIAL HIGHLIGHTS

(For a Share outstanding throughout each period)

The following table for the fiscal years ended April 30, 1995, 1996, 1997 and
1998 has been audited by Ernst & Young LLP, the Trust's former independent
auditors. The financial highlights for the fiscal year ended April 30, 1999 have
been audited by Arthur Andersen LLP. Arthur Andersen's report dated June 22,
1999, on the Trust 's financial statements for the year ended April 30, 1999, is
included in the Combined Annual Report, which is incorporated herein by
reference. This table should be read in conjunction with the Fund's financial
statements and notes thereto, which may be obtained free of charge from the
Trust.

<S> <C> <C> <C> <C> <C> <C> <C>
YEAR NET ASSET NET NET TOTAL DISTRIBUTIONS DISTRIBUTIONS CAPITAL
ENDED VALUE, INVESTMENT REALIZED FROM FROM NET FROM NET CONTRIBUTION
APRIL 30, BEGINNING INCOME AND INVESTMENT INVESTMENT REALIZED GAINS
OF PERIOD (LOSS) UNREALIZED OPERATIONS INCOME
GAIN (LOSS)
ON
INVESTMENTS

- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
1995 $ 1.00 0.04 -- 0.04 (0.04) -- --
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
1996 $ 1.00 0.05 -- 0.05 (0.05) -- --
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
1997 $ 1.00 0.05 -- 0.05 (0.05) -- --
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
1998 $ 1.00 0.05 -- 0.05 (0.05) -- --
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
1999 $ 1.00 0.04 -- 0.04 (0.04) -- --
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
PRIME MONEY MARKET FUND Y SHARES

1 BASED ON NET ASSET VALUE, WHICH DOES NOT REFLECT THE SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE, IF APPLICABLE. 2 DURING THE PERIOD CERTAIN
FEES WERE VOLUNTARILY WAIVED. IF SUCH WAIVERS HAD NOT OCCURRED, THE RATIOS WOULD
HAVE BEEN AS INDICATED. 3 TOTAL RETURN WOULD HAVE REMAINED AT 4.84% ABSENT THE
CAPITAL CONTRIBUTION BY RIGGS NATIONAL CORP.

<PAGE>

- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS

- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL NET TOTAL EXPENSES2 NET EXPENSES NET NET PORTFOLIO
DISTRIBUTIONASSET RETURN1 INVESTMENT (AFTER INVESTMENT ASSETS, TURNOVER

VALUE, INCOME WAIVERS) INCOME END OF
END OF (LOSS)2 (LOSS) PERIOD
PERIOD (AFTER (000
WAIVERS) OMITTED)

- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(0.04) $ 1.00 4.39% 0.80% 4.13% 0.60% 4.33% $81,089 --
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(0.05) $ 1.00 5.28% 0.78% 4.99% 0.60% 5.17% $107,104 --
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(0.05) $ 1.00 4.83% 0.70% 4.61% 0.57% 4.74% $141,011 --
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(0.05) $ 1.00 5.00% 0.71% 4.80% 0.63% 4.88% $117,424 --
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
(0.04) $ 1.00 4.49% 0.97% 4.14% 0.72% 4.39% $138,097 --
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------

<PAGE>

RIGGS FUNDS

CLASS Y SHARES

Riggs Stock Fund
Riggs Small Company Stock Fund
Riggs U.S. Government Securities Fund
Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

A Statement of Additional Information (SAI) dated December 13, 1999 is
incorporated by reference into this prospectus. Additional information about the
Funds' and their investments is contained in the Funds' SAI, and Annual and
Semi-Annual Reports to Shareholders as they become available. The Annual Report
discusses market conditions and investment strategies that significantly
affected the Funds' performance during their last fiscal year. To obtain the
SAI, the Annual Report, Semi-Annual Report and other information without charge,
call your investment professional or Riggs Funds Shareholder Services at (202)
835-5300 or outside the Washington, DC metropolitan area toll-free at
1-800-934-3883.

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

INVESTMENT COMPANY ACT FILE NO. 811-6309

CUSIP 76656A 781 CUSIP 76656A 799 CUSIP 76656A 773 CUSIP 76656A 401 CUSIP 76656A
807 G02713-02 (12/99)

RIGGS FUNDS

RIGGS STOCK FUND

CLASS R SHARES

CLASS Y SHARES

CLASS B SHARES

RIGGS SMALL COMPANY STOCK FUND

CLASS R SHARES

CLASS Y SHARES

CLASS B SHARES

RIGGS LARGE CAP GROWTH FUND

CLASS R SHARES

CLASS B SHARES

RIGGS U.S. GOVERNMENT SECURITIES FUND

CLASS R SHARES

CLASS Y SHARES

RIGGS BOND FUND

CLASS R SHARES

RIGGS INTERMEDIATE TAX FREE BOND FUND

CLASS R SHARES

RIGGS LONG TERM TAX FREE BOND FUND

CLASS R SHARES

RIGGS PRIME MONEY MARKET FUND

CLASS R SHARES

CLASS Y SHARES

RIGGS U.S. TREASURY MONEY MARKET FUND

CLASS R SHARES

CLASS Y SHARES

STATEMENT OF ADDITIONAL INFORMATION

DECEMBER 13, 1999

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses of the Riggs Funds dated December 13,
1999.

This SAI incorporates by reference the Funds' Annual Report. Obtain the
prospectuses or the Annual Report without charge by calling Riggs Funds
Shareholder Services at (202) 835-5300 or outside the Washington, D.C.
metropolitan area toll-free at 1-800-934-3883.

CONTENTS

HOW ARE THE FUNDS ORGANIZED?............................2
SECURITIES IN WHICH THE FUNDS INVEST....................2
WHAT DO SHARES COST?....................................18
HOW ARE THE FUNDS SOLD?.................................18
SUBACCOUNTING SERVICES..................................19
REDEMPTION IN KIND......................................19
MASSACHUSETTS PARTNERSHIP LAW...........................20
ACCOUNT AND SHARE INFORMATION...........................20
TAX INFORMATION.........................................21
WHO MANAGES AND PROVIDES SERVICES TO THE FUNDS..........22
FEES PAID BY THE FUNDS FOR SERVICES.....................26
HOW DO THE FUNDS MEASURE PERFORMANCE?...................26
FINANCIAL INFORMATION...................................31
APPENDIX................................................32
ADDRESSES........................................BACK COVER

Federated Securities Corp., Distributor,
subsidiary of Federated Investors, Inc.

G02713-03 (12/99)

<PAGE>

HOW ARE THE FUNDS ORGANIZED

Riggs Funds (Trust) is a diversified, open-end, management investment company
that was established under the laws of the Commonwealth of Massachusetts on
April 1, 1991. The Trust changed its name from RIMCO Monument Funds to RIGGS
Funds on June 30, 1998. The Trust may offer separate series of Shares
representing interests in separate portfolios of securities. The Board of
Trustees (the Board) has established three classes of Shares known as Class R
Shares Class Y Shares and Class B Shares. This SAI relates to all three classes
of Shares. The Funds' investment adviser is Riggs Bank, N.A. (Adviser).

SECURITIES IN WHICH THE FUNDS INVEST

In pursuing their investment strategy, the Funds may invest in the following
securities for any purpose that is consistent with their investment objective.

Following tables indicate which types of securities are a: o P = PRINCIPAl
investment of a Fund; o A = ACCEPTABLe (but not principal) investment of a Fund;
or o N = NOT AN ACCEPTABLe investment of a Fund.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
SECURITIES STOCK SMALL LARGE U.S. BOND INTERMEDIATELONG PRIME U.S.
FUND COMPANY CAP GOVERNMENT FUND TAX FREE TERM MONEY TREASURY
STOCK GROWTH SECURITIES BOND FUND TAX MARKET MONEY
FUND FUND FUND FREE FUND MARKET

BOND FUND

FUND

- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
COMMERCIAL PAPER 2, 3 A A A A P A A P N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
COMMON STOCKS P P P N A P N N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
CONVERTIBLE SECURITIES A A A N P A A N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
CORPORATE DEBT OBLIGATIONS A A A A P A A P N
4
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
CREDIT ENHANCEMENT 5 N N A N A A P P N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
DEMAND INSTRUMENTS A A A A A A A A N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
FOREIGN SECURITIES A A A N A A N N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
FUTURES AND OPTIONS A A A A A A A N N
TRANSACTIONS

- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
GENERAL OBLIGATION BONDS N N N N N N P A N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
INSURANCE CONTRACTS N N N N A N N A N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
INVERSE FLOATERS N N N N A N P N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
MORTGAGE BACKED SECURITIES N N N P A N N N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
MUNICIPAL SECURITIES N N N N P N P N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
PREFERRED STOCKS A A P N P P N N P
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
PRIVATE ACTIVITY BONDS N N N N N N P A N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
REAL ESTATE INVESTMENT N A A N A A N N N
TRUSTS

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

<PAGE>

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

- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
SPECIAL REVENUE BONDS N N N N N N P A N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
TREASURY SECURITIES A A A P A A A P P
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
VARIABLE RATE DEMAND NOTES A A A A A A P P N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
WARRANTS A A A N A A N N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
WHEN-ISSUED TRANSACTIONS A A P A P P P A A
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
ZERO COUPON SECURITIES N N N N P N P N N
- ----------------------------- ------ -------- -------- ---------- ------ ----------- -------- ------- --------
</TABLE>

<PAGE>

1. The Stock Fund and Small Company Stock Fund may invest up to 20% of
their total assets in ADRs.

2. The U.S. Government Securities Fund may invest in commercial paper that
has at least two high quality ratings by a nationally recognized statistical
rating organization (NRSRO).

3. The Stock Fund and Small Company Stock Fund may invest in commercial
paper rated A-1 by S&P, Prime-1 by Moody's or F-1+ or F-1 by Fitch.

4. The U.S. Government Securities Fund may invest in corporate debt
obligations and U.S. dollar denominated debt obligations of foreign corporations
and governments rated Baa or better, Aaa, Aa or A by Moody's Investor Services,
Inc. (Moody's); BBB or better, AAA, AA or A by Standard & Poor's (S&P); or BBB
or better, AAA, AA, or A by Fitch IBCA, Inc. (Fitch). The Fund will limit its
investment in bonds rated in the lowest investment grade category to 10% of its
total assets. In the event that any such security is downgraded below the fourth
highest rating category, the Fund will dispose of the security.

5. The Prime Money Market Fund may have more than 25% of its total assets
invested in securities credit-enhanced by banks.

<PAGE>

SECURITIES DESCRIPTIONS AND TECHNIQUES

EQUITY SECURITIES

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

COMMON STOCKS

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

PREFERRED STOCKS

Preferred stocks have the right to receive specified dividends or
distributions before the issuer makes payments on its common stock. Some
preferred stocks also participate in dividends and distributions paid on
common stock. Preferred stocks may also permit the issuer to redeem the
stock. A Fund may treat such redeemable preferred stock as a fixed income
security.

REAL ESTATE INVESTMENT TRUSTS (REITS)

REITs are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax
if they limit their operations and distribute most of their income. Such tax
requirements limit a REIT's ability to respond to changes in the commercial
real estate market.

WARRANTS

Warrants give a Fund the option to buy the issuer's equity securities at a
specified price (the exercise price) at a specified future date (the
expiration date). A Fund may buy the designated securities by paying the
exercise price before the expiration date. Warrants may become worthless if
the price of the stock does not rise above the exercise price by the
expiration date. This increases the market risks of warrants as compared to
the underlying security.

Rights are the same as warrants, except companies typically issue rights to
existing stockholders.

FIXED INCOME SECURITIES

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

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

AGENCY SECURITIES

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

The Funds treat mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does
not reduce the market and prepayment risks of these mortgage

CORPORATE DEBT SECURITIES

In addition, the credit risk of an issuer's debt security may vary based on
its priority for repayment. For example, higher ranking (senior) debt
securities have a higher priority than lower ranking (subordinated)
securities. This means that the issuer might not make payments on
subordinated securities while continuing to make payments on senior
securities. In addition, in the event of bankruptcy, holders of senior
securities may receive amounts otherwise payable to the holders of
subordinated securities. Some subordinated securities, such as trust
preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer
any payment that would reduce its capital below regulatory requirements.

COMMERCIAL PAPER

Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for
current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If
the issuer cannot continue to obtain liquidity in this fashion, its
commercial paper may default.

DEMAND INSTRUMENTS

Demand instruments are corporate debt securities that the issuer must
repay upon demand. Other demand instruments require a third party, such
as a dealer or bank, to repurchase the security for its face value upon
demand. The Funds treat demand instruments as short-term securities,
even though their stated maturity may extend beyond one year.

MUNICIPAL SECURITIES

Municipal securities are issued by states, counties, cities and other
political subdivisions and authorities. Although many municipal securities
are exempt from federal income tax, the Fund may invest in taxable municipal
securities.

MORTGAGE BACKED SECURITIES

Mortgage backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates,
maturities and other terms. Mortgages may have fixed or adjustable interest
rates. Interests in pools of adjustable rate mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage backed securities are
pass-through certificates. An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer
deducts its fees and expenses and passes the balance of the payments on to
the certificate holders once a month. Holders of pass-through certificates
receive a pro rata Share of all payments and pre-payments from the
underlying mortgages. As a result, the holders assume all the prepayment
risks of the underlying mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

CMOs, including interests in real estate mortgage investment conduits
(REMICs), allocate payments and prepayments from an underlying
pass-through certificate among holders of different classes of mortgage
backed securities. This creates different prepayment and interest rate
risks for each CMO class. The degree of increased or decreased
prepayment risks depends upon the structure of the CMOs. However, the
actual returns on any type of mortgage backed security depend upon the
performance of the underlying pool of mortgages, which no one can
predict and will vary among pools.

SEQUENTIAL CMOS

In a sequential pay CMO, one class of CMOs receives all principal
payments and prepayments. The next class of CMOs receives all
principal payments after the first class is paid off. This process
repeats for each sequential class of CMO. As a result, each class of
sequential pay CMOs reduces the prepayment risks of subsequent
classes.

PACS, TACS AND COMPANION CLASSES

More sophisticated CMOs include planned amortization classes (PACs)
and targeted amortization classes (TACs). PACs and TACs are issued
with companion classes. PACs and TACs receive principal payments and
prepayments at a specified rate. The companion classes receive
principal payments and prepayments in excess of the specified rate.
In addition, PACs will receive the companion classes' Share of
principal payments, if necessary, to cover a shortfall in the
prepayment rate.

This helps PACs and TACs to control prepayment risks by increasing
the risks to their companion classes.

IOS AND POS

CMOs may allocate interest payments to one class (Interest Only or
IOs) and principal payments to another class (Principal Only or POs).
POs increase in value when prepayment rates increase. In contrast,
IOs decrease in value when prepayments increase, because the
underlying mortgages generate less interest payments. However, IOs
tend to increase in value when interest rates rise (and prepayments
decrease), making IOs a useful hedge against interest rate risks.

FLOATERS AND INVERSE FLOATERS

Another variant allocates interest payments between two classes of
CMOs. One class (Floaters) receives a Share of interest payments
based upon a market index such as the London Interbank Offered Rate
(LIBOR). The other class (Inverse Floaters) receives any remaining
interest payments from the underlying mortgages. Floater classes
receive more interest (and Inverse Floater classes receive
correspondingly less interest) as interest rates rise. This shifts
prepayment and interest rate risks from the Floater to the Inverse
Floater class, reducing the price volatility of the Floater class and
increasing the price volatility of the Inverse Floater class.

Z CLASSES AND RESIDUAL CLASSES

CMOs must allocate all payments received from the underlying
mortgages to some class. To capture any unallocated payments, CMOs
generally have an accrual (Z) class. Z classes do not receive any
payments from the underlying mortgages until all other CMO classes
have been paid off. Once this happens, holders of Z class CMOs
receive all payments and prepayments. Similarly, REMICs have residual
interests that receive any mortgage payments not allocated to another
REMIC class.

The degree of increased or decreased prepayment risks depends upon
the structure of the CMOs. However, the actual returns on any type of
mortgage backed security depend upon the performance of the
underlying pool of mortgages, which no one can predict and will vary
among pools.

ASSET BACKED SECURITIES

Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial
debts with maturities of less than ten years. However, almost any type
of fixed income assets (including other fixed income securities) may be
used to create an asset backed security. Asset backed securities may
take the form of commercial paper, notes, or pass through certificates.
Asset backed securities have prepayment risks. Like CMOs, asset backed
securities may be structured like Floaters, Inverse Floaters, IOs and
POs.

ZERO COUPON SECURITIES

Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred
to as a coupon payment). Investors buy zero coupon securities at a price
below the amount payable at maturity. The difference between the purchase
price and the amount paid at maturity represents interest on the zero coupon
security. Investors must wait until maturity to receive interest and
principal, which increases the market and credit risks of a zero coupon
security. A zero coupon step-up security converts to a coupon security
before final maturity.

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

BANK INSTRUMENTS

INSURANCE CONTRACTS

Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Fund treats these contracts as fixed income securities.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security.

CONVERTIBLE SECURITIES

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

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

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

TAX EXEMPT SECURITIES

GENERAL OBLIGATION BONDS

General obligation bonds are supported by the issuer's power to exact
property or other taxes. The issuer must impose and collect taxes sufficient
to pay principal and interest on the bonds. However, the issuer's authority
to impose additional taxes may be limited by its charter or state law.

SPECIAL REVENUE BONDS

Special revenue bonds are payable solely from specific revenues received by
the issuer such as specific taxes, assessments, tolls, or fees. Bondholders
may not collect from the municipality's general taxes or revenues. For
example, a municipality may issue bonds to build a toll road, and pledge the
tolls to repay the bonds.

Therefore, a shortfall in the tolls normally would result in a default on
the bonds.

<PAGE>

PRIVATE ACTIVITY BONDS

Private activity bonds are special revenue bonds used to finance private
entities. For example, a municipality may issue bonds to finance a new
factory to improve its local economy. The municipality would lend the
proceeds from its bonds to the company using the factory, and the company
would agree to make loan payments sufficient to repay the bonds. The bonds
would be payable solely from the company's loan payments, not from any other
revenues of the municipality. Therefore, any default on the loan normally
would result in a default on the bonds.

The interest on many types of private activity bonds is subject to the
federal alternative minimum tax (AMT). A Fund may invest in bonds subject to
AMT.

TAX INCREMENT FINANCING BONDS

Tax increment financing (TIF) bonds are payable from increases in taxes or
other revenues attributable to projects financed by the bonds. For example,
a municipality may issue TIF bonds to redevelop a commercial area. The TIF
bonds would be payable solely from any increase in sales taxes collected
from merchants in the area. The bonds could default if merchants' sales, and
related tax collections, failed to increase as anticipated.

VARIABLE RATE DEMAND INSTRUMENTS

Variable rate demand instruments are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the
security for its face value upon demand. The securities also pay interest at
a variable rate intended to cause the securities to trade at their face
value. The Funds treat demand instruments as short-term securities, because
their variable interest rate adjusts in response to changes in market rates,
even though their stated maturity may extend beyond thirteen months.

MUNICIPAL NOTES

Municipal notes are short-term tax exempt securities. Many municipalities
issue such notes to fund their current operations before collecting taxes or
other municipal revenues. Municipalities may also issue notes to fund
capital projects prior to issuing long-term bonds. The issuers typically
repay the notes at the end of their fiscal year, either with taxes, other
revenues or proceeds from newly issued notes or bonds.

FOREIGN SECURITIES

Foreign securities are securities of issuers based outside the United States. A
Fund considers an issuer to be based outside the United States if:

o it is organized under the laws of, or has a principal office located in,
another country;

o the principal trading market for its securities is in another country; or

o it (or its subsidiaries) derived in its most current fiscal year at least
50% of its total assets, capitalization, gross revenue or profit from goods
produced, services performed, or sales made in another country.

The foreign securities in which a Fund invests are primarily denominated in U.S.
dollars. Along with the risks normally associated with domestic securities of
the same type, foreign securities are subject to risks of foreign investing.

DEPOSITARY RECEIPTS

Depositary receipts represent interests in underlying securities issued by a
foreign company. Depositary receipts are not traded in the same market as
the underlying security. The foreign securities underlying American
Depositary Receipts (ADRs) are traded in the United States. ADRs provide a
way to buy Shares of foreign-based companies in the United States rather
than in overseas markets. ADRs are also traded in U.S. dollars, eliminating
the need for foreign exchange transactions. The foreign securities
underlying European Depositary Receipts (EDRs), Global Depositary Receipts
(GDRs), and International Depositary Receipts (IDRs), are traded globally or
outside the United States. Depositary receipts involve many of the same
risks of investing directly in foreign securities, including currency risks
and risks of foreign investing.

<PAGE>

DERIVATIVE CONTRACTS

Derivative contracts are financial instruments that require payments based upon
changes in the values of designated (or underlying) securities, currencies,
commodities, financial indices or other assets. Some derivative contracts (such
as futures, forwards and options) require payments relating to a future trade
involving the underlying asset. Other derivative contracts (such as swaps)
require payments relating to the income or returns from the underlying asset.
The other party to a derivative contract is referred to as a counterparty.

Many derivative contracts are traded on securities or commodities exchanges. In
this case, the exchange sets all the terms of the contract except for the price.
Investors make payments due under their contracts through the exchange. Most
exchanges require investors to maintain margin accounts through their brokers to
cover their potential obligations to the exchange. Parties to the contract make
(or collect) daily payments to the margin accounts to reflect losses (or gains)
in the value of their contracts. This protects investors against potential
defaults by the counterparty. Trading contracts on an exchange also allows
investors to close out their contracts by entering into offsetting contracts.

For example, a Fund could close out an open contract to buy an asset at a future
date by entering into an offsetting contract to sell the same asset on the same
date. If the offsetting sale price is more than the original purchase price, the
Fund realizes a gain; if it is less, the Fund realizes a loss. Exchanges may
limit the amount of open contracts permitted at any one time. Such limits may
prevent a Fund from closing out a position. If this happens, a Fund will be
required to keep the contract open (even if it is losing money on the contract),
and to make any payments required under the contract (even if it has to sell
portfolio securities at unfavorable prices to do so). Inability to close out a
contract could also harm a Fund by preventing it from disposing of or trading
any assets it has been using to secure its obligations under the contract.

A Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the Fund and the counterparty. OTC
contracts do not necessarily have standard terms, so they cannot be directly
offset with other OTC contracts. In addition, OTC contracts with more
specialized terms may be more difficult to price than exchange traded contracts.

Depending upon how a Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the underlying asset,
derivative contracts may increase or decrease a Fund's exposure to market and
currency risks, and may also expose a Fund to liquidity and leverage risks. OTC
contracts also expose a Fund to credit risks in the event that a counterparty
defaults on the contract.

A Fund may trade in the following types of derivative contracts.

FUTURES CONTRACTS

Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a specified
price, date, and time. Entering into a contract to buy an underlying asset
is commonly referred to as buying a contract or holding a long position in
the asset. Entering into a contract to sell an underlying asset is commonly
referred to as selling a contract or holding a short position in the asset.
Futures contracts are considered to be commodity contracts. Futures
contracts traded OTC are frequently referred to as forward contracts.

OPTIONS

Options are rights to buy or sell an underlying asset for a specified price
(the exercise price) during, or at the end of, a specified period. A call
option gives the holder (buyer) the right to buy the underlying asset from
the seller (writer) of the option. A put option gives the holder the right
to sell the underlying asset to the writer of the option. The writer of the
option receives a payment, or premium, from the buyer, which the writer
keeps regardless of whether the buyer uses (or exercises) the option.

The Stock Fund, Small Company Stock Fund, Large Cap Growth Fund, U.S.
Government Securities Fund, Bond Fund, Intermediate Tax Free Bond Fund and
the Long Term Tax Free Bond Fund may:

Buy call options on portfolio securities and on futures contracts in
anticipation of an increase in the value of the underlying asset.;

Buy put options on portfolio securities and on futures contracts in
anticipation of a decrease in the value of the underlying asset.; and

Buy or write options to close out existing options positions.

The Stock Fund, Small Company Stock Fund, Large Cap Growth Fund, U.S.
Government Securities Fund, Bond Fund, Intermediate Tax Free Bond Fund and
the Long Term Tax Free Bond Fund may also write call options to generate
income from premiums, and in anticipation of a decrease or only limited
increase in the value of the underlying asset. If a call written by a Fund
is exercised, the Fund foregoes any possible profit from an increase in the
market price of the underlying asset over the exercise price plus the
premium received.

When a Fund writes options on futures contracts, it will be subject to
margin requirements similar to those applied to futures contracts.

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting a Fund's
return on the transaction. This return is unrelated to the interest rate on the
underlying security. The Funds will enter into repurchase agreements only with
banks and other recognized financial institutions, such as securities dealers,
deemed creditworthy by the Adviser.

Repurchase agreements are subject to counterparty risks.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which a Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by a Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because a Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.

DELAYED DELIVERY TRANSACTIONS

Delayed delivery transactions, including when issued transactions, are
arrangements in which a Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to a Fund. A Fund records the transaction when it agrees
to buy the securities and reflects their value in determining the price of its
Shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create market
risks for the Fund. Delayed delivery transactions also involve credit risks in
the event of a counterparty default. These transactions create leverage risks.

SECURITIES LENDING

A Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.

A Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.

Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
they will terminate a loan in anticipation of any important vote. The Fund may
pay administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.

Securities lending activities are subject to market risks and credit risks.
These transactions create leverage risks.

<PAGE>

ASSET COVERAGE

In order to secure their obligations in connection with derivatives contracts or
special transactions, a Fund will either own the underlying assets, enter into
an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds the Fund's obligations. Unless a Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations without entering into an offsetting derivative contract or
terminating a special transaction. This may cause a Fund to miss favorable
trading opportunities or to realize losses on derivative contracts or special
transactions.

HEDGING

Hedging transactions are intended to reduce specific risks. For example, to
protect a Fund against circumstances that would normally cause a Fund's
portfolio securities to decline in value, a Fund may buy or sell a derivative
contract that would normally increase in value under the same circumstances. The
Fund may also attempt to hedge by using combinations of different derivatives
contracts, or derivatives contracts and securities. A Fund's ability to hedge
may be limited by the costs of the derivatives contracts. A Fund may attempt to
lower the cost of hedging by entering into transactions that provide only
limited protection, including transactions that (1) hedge only a portion of its
portfolio, (2) use derivatives contracts that cover a narrow range of
circumstances or (3) involve the sale of derivatives contracts with different
terms. Consequently, hedging transactions will not eliminate risk even if they
work as intended. In addition, hedging strategies are not always successful, and
could result in increased expenses and losses to a Fund.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

A Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.

INVESTMENT 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 ("S&P"), Prime-1 by Moody's Investors Service, Inc.
("Moody's"), or F-1+ or F-1 by Fitch IBCA, Inc. ("Fitch"), are all considered
rated in the highest short-term rating category.

INVESTMENT RATINGS FOR CORPORATE FIXED INCOME SECURITIES

If a security is downgraded below the minimum quality grade discussed in a
Fund's investment strategy, the adviser will reevaluate the security, but will
not be required to sell it.

INVESTMENT RISKS

There are many factors which may affect an investment in the Funds. The Funds'
risks are described below.

STOCK MARKET RISKS

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

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

INTEREST RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of a
fixed income security to changes in interest rates.

PREPAYMENT RISKS

Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate mortgages
when mortgage rates fall. This results in the prepayment of mortgage backed
securities with higher interest rates. Conversely, prepayments due to
refinancings decrease when mortgage rates increase. This extends the life of
mortgage backed securities with lower interest rates. Other economic factors can
also lead to increases or decreases in prepayments. Increases in prepayments of
high interest rate mortgage backed securities, or decreases in prepayments of
lower interest rate mortgage backed securities, may reduce their yield and
price. These factors, particularly the relationship between interest rates and
mortgage prepayments makes the price of mortgage backed securities more volatile
than many other types of fixed income securities with comparable credit risks.

Mortgage backed securities generally compensate for greater prepayment risk by
paying a higher yield. The difference between the yield of a mortgage backed
security and the yield of a U.S. Treasury security with a comparable maturity
(the spread) measures the additional interest paid for risk. Spreads may
increase generally in response to adverse economic or market conditions. A
security's spread may also increase if the security is perceived to have an
increased prepayment risk or perceived to have less market demand. An increase
in the spread will cause the price of the security to decline.

A Fund may have to reinvest the proceeds of mortgage prepayments in other fixed
income securities with lower interest rates, higher prepayment risks, or other
less favorable characteristics.

RISKS RELATED TO INVESTING FOR GROWTH

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

RISKS RELATED TO INVESTING FOR VALUE

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

RISKS RELATED TO COMPANY SIZE

Generally, the smaller the market capitalization of a company, the fewer the
number of Shares traded daily, the less liquid its stock and the more volatile
its price. Market capitalization is determined by multiplying the number of its
outstanding Shares by the current market price per Share.

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

LIQUIDITY RISKS

Trading opportunities are more limited for equity securities that are not widely
held and for fixed income securities that have not received any credit ratings,
have received ratings below investment grade or are not widely held. This may
make it more difficult to sell or buy a security at a favorable price or time.
Consequently, the Fund may have to accept a lower price to sell a security, sell
other securities to raise cash or give up an investment opportunity, any of
which could have a negative effect on the Fund's performance. Infrequent trading
of securities may also lead to an increase in their price volatility.

Liquidity risk also refers to the possibility that a Fund may not be able to
sell a security or close out a derivative contract when it wants to. If this
happens, a Fund will be required to continue to hold the security or keep the
position open, and the Fund could incur losses.

OTC derivative contracts generally carry greater liquidity risk than
exchange-traded contracts.

o Trading opportunities are more limited for fixed income securities that
have not received any credit ratings, have received ratings below
investment grade or are not widely held.

o Trading opportunities are more limited for CMOs that have complex terms or
that are not widely held. These features may make it more difficult to sell
or buy a security at a favorable price or time. Consequently, a Fund may have
to accept a lower price to sell a security, sell other securities to raise
cash or give up an investment opportunity, any of which could have a negative
effect on the Fund's performance. Infrequent trading of securities may also
lead to an increase in their price volatility.

o Liquidity risk also refers to the possibility that a Fund may not be able to
sell a security when it wants to. If this happens, the Fund will be required
to continue to hold the security or keep the position open, and the Fund
could incur losses.

LEVERAGE RISKS

Leverage risk is created when an investment exposes a Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Funds' risk of loss and potential for gain.

Investments can have these same results if their returns are based on a multiple
of a specified index, security, or other benchmark.

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, a Fund
will lose money.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, a Fund must rely entirely upon the Adviser's credit assessment.

Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.

Credit risk includes the possibility that a party to a transaction involving a
Fund will fail to meet its obligations. This could cause a Fund to lose the
benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.

CURRENCY RISKS

o Exchange rates for currencies fluctuate daily. The combination of currency
risk and market risks tends to make securities traded in foreign markets more
volatile than securities traded exclusively in the U.S.

o The Adviser attempts to manage currency risk by limiting the amount the Fund
invests in securities denominated in a particular currency. However,
diversification will not protect the Fund against a general increase in the
value of the U.S. dollar relative to other currencies.

RISKS OF FOREIGN INVESTING

Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.

Foreign companies may not provide information (including financial statements)
as frequently or to as great an extent as companies in the United States.
Foreign companies may also receive less coverage than United States companies by
market analysts and the financial press. In addition, foreign countries may lack
uniform accounting, auditing and financial reporting standards or regulatory
requirements comparable to those applicable to U.S. companies. These factors may
prevent a Fund and its Adviser from obtaining information concerning foreign
companies that is as frequent, extensive and reliable as the information
available concerning companies in the United States.

Foreign countries may have restrictions on foreign ownership of securities or
may impose exchange controls, capital flow restrictions or repatriation
restrictions which could adversely affect the liquidity of a Fund's investments.

TAX RISKS

In order to be tax-exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest received
and distributed by the Fund to Shareholders to be taxable.

Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

SECTOR RISKS

A substantial part of a Fund's portfolio may be comprised of securities issued
or credit enhanced by companies in similar businesses, or with other similar
characteristics. As a result, the Fund will be more susceptible to any economic,
business, political, or other developments which generally affect these issuers.

NONINVESTMENT GRADE SECURITIES RISKS

Securities rated below investment grade, also known as junk bonds, generally
entail greater market, credit and liquidity risks than investment grade
securities. For example, their prices are more volatile, economic downturns and
financial setbacks may affect their prices more negatively, and their trading
market may be more limited.

CALL RISKS

Call risk is the possibility that an issuer may redeem a fixed income security
before maturity (a call) at a price below its current market price. An increase
in the likelihood of a call may reduce the security's price.

If a fixed income security is called, the Fund may have to reinvest the proceeds
in other fixed income securities with lower interest rates, higher credit risks,
or other less favorable characteristics.

FUNDAMENTAL INVESTMENT OBJECTIVE

RIGGS STOCK FUND seeks to provide growth of capital and income.

RIGGS SMALL COMPANY STOCK FUND seeks to provide long-term capital appreciation.

RIGGS LARGE CAP GROWTH FUND seeks to provide capital appreciation.

RIGGS U.S. GOVERNMENT SECURITIES FUND seeks to achieve current income.

RIGGS BOND FUND seeks to provide as high a level of current income as is
consistent with the preservation of capital.

RIGGS INTERMEDIATE TAX FREE BOND FUND seeks to provide a high level of current
income which is exempt from federal income tax consistent with the preservation
of principal.

RIGGS LONG TERM TAX FREE BOND FUND seeks to provide a high level of current
income which is exempt from federal income tax.

RIGGS PRIME MONEY MARKET FUND seeks to provide current income consistent with
stability of principal and liquidity.

RIGGS U.S. TREASURY MONEY MARKET FUND seeks to provide current income consistent
with stability of principal and liquidity.

The above listed fundamental investment objectives cannot be changed by the
Fund's Trustees without Shareholder approval.

INVESTMENT LIMITATIONS

BORROWING MONEY AND ISSUING SENIOR SECURITIES

The Funds may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

LENDING

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

INVESTING IN COMMODITIES

The Funds may not purchase or sell physical commodities, provided that the Funds
may purchase securities of companies that deal in commodities.

INVESTING IN REAL ESTATE

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

DIVERSIFICATION

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

CONCENTRATION

The Funds will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry.

UNDERWRITING

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

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

PLEDGING ASSETS

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

BUYING ON MARGIN

The Stock Fund, Small Company Stock Fund, Large Cap Growth Fund, U.S. Government
Securities Fund, Bond Fund, Intermediate Tax Free Bond Fund and the Long Term
Tax Free Bond Fund will not purchase securities on margin, provided that the
Funds may obtain short-term credits necessary for the clearance of purchases and
sales of securities, and further provided that the Funds may make margin
deposits in connection with their use of financial options and futures, forward
and spot currency contracts, swap transactions and other financial contracts or
derivative instruments.

The Prime Money Market Fund and the U.S. Treasury Money Market Fund will not
purchase securities on margin, provided that the Funds may obtain short-term
credits necessary for the clearance of purchases and sales of securities.

ILLIQUID SECURITIES

The Stock Fund, Small Company Stock Fund, Large Cap Growth Fund, U.S. Government
Securities Fund, Bond Fund, Intermediate Tax Free Bond Fund, Long Term Tax Free
Bond Fund and Prime Money Market Fund will not purchase securities for which
there is no readily available market, or enter into repurchase agreements or
purchase time deposits maturing in more than seven days if immediately after and
as a result, the value of such securities would exceed, in the aggregate, 15% of
the net assets of the Stock Fund, Small Company Stock Fund, Large Cap Growth
Fund, U.S. Government Securities Fund, Bond Fund, Intermediate Tax Free Bond
Fund and Long Term Tax Free Bond Fund, and 10% of the nets assets of the Prime
Money Market Fund.

INVESTING IN OTHER INVESTMENT COMPANIES

Each Fund may invest its assets in securities of other investment
companies as an efficient means of carrying out its investment policies. It
should be noted that investment companies incur certain expenses, such as
management fees, and, therefore, any investment by the Funds in Shares of other
investment companies may be subject to such duplicate expenses. At the present
time, each Fund expects that its investments in other investment companies may
include Shares of money market funds, including funds affiliated with the Fund's
investment adviser.

The Funds may invest in the securities of affiliated money market funds
as an efficient means of managing the Fund's uninvested cash.

<PAGE>

For purposes of the concentration policy, to conform to the current view of the
SEC staff that only domestic bank instruments may be excluded from industry
concentration limitations the Fund will not exclude foreign bank instruments
from industry concentration tests so long as the policy of the SEC remains in
effect. The Fund will consider concentration to be the investment of more than
25% of the value of its total assets in any one industry.

DETERMINING MARKET VALUE OF SECURITIES

With respect to the Prime Money Market Fund and the 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.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on Shares of 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 opposite may be true.

The Funds' 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. The procedures
include monitoring the relationship between the amortized cost value per Share
and the net asset value per Share based upon available indications of market
value. The Trustees will decide what, if any, steps should be taken if there is
a difference of more than 0.5 of 1% between the two values. The Trustees will
take any steps they consider appropriate (such as redemption in kind or
shortening the average portfolio maturity) to minimize any material dilution or
other unfair results arising from differences between the two methods of
determining net asset value.

With respect to the Stock Fund, Small Company Stock Fund, Large Cap Growth Fund,
U.S. Government Securities Fund, Bond Fund, Intermediate Tax Free Fund and the
Long Term Tax Free Bond Fund, the market values of the Funds' portfolio
securities are determined as follows:

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

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

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

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

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

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

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

<PAGE>

TRADING IN FOREIGN SECURITIES

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

WHAT DO SHARES COST?

The NAV for each class of Shares may differ due to the variance in daily net
income realized by each class. Such variance will reflect only accrued net
income to which the Shareholders of a particular class are entitled.

REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE

YOU WILL NOT BE CHARGED A CDSC WHEN REDEEMING SHARES:

o as a Shareholder who acquired Shares prior to July 1, 1998 (including
Shares acquired in exchange for Shares acquired prior to July 1, 1998);

o purchased with reinvested dividends or capital gains;

o following the death or disability, as defined in Section 72(m)(7) of the
Internal Revenue Code of 1986, of the last surviving Shareholder;

o representing minimum required distributions from an Individual Retirement
Account or other retirement plan to a Shareholder who has attained the age
of 701/2;

o if a Fund redeems your Shares and closes your account for not meeting the
minimum balance; and

o which are qualifying redemptions of Shares under a Systematic Withdrawal
Program.

IN ADDITION, (WITH THE EXCEPTION OF THE CLASS B SHARES OF THE STOCK FUND AND THE
SMALL COMPANY STOCK FUND), YOU WILL NOT BE CHARGED A CDSC:

o on Shares held by Trustees, employees and retired employees of the Funds,
Riggs National Corporation and/or its subsidiaries, or Federated Securities
Corp. and/or its affiliates, and their spouses and children under the age
of 21;

o on Shares originally purchased (i) through the Trust Division or the
Private Banking Division of Riggs Bank; (ii) through an investment adviser
registered under the Investment Advisers Act of 1940; (iii) through
retirement plans where the third party administrator has entered into
certain arrangements with Riggs Bank or its affiliates; or (iv) by any bank
or dealer (in each case for its own account) having a sales agreement with
Federated Securities Corp.; and

o on Shares purchased through entities having no transaction fee agreements
or wrap accounts with Riggs Bank or its affiliates.

HOW ARE THE FUNDS SOLD?

Under the Distributor's Contract with the Funds, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.

RULE 12B-1 PLAN (CLASS R SHARES AND CLASS B SHARES)

As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of banks, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Funds achieve economies of scale, reduce per Share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Funds' service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.

The Funds may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Funds pay for any expenses of the Distributor
that exceed the maximum Rule 12b-1 Plan fee.

For some classes of Shares, the maximum Rule 12b-1 Plan fee that can be paid in
any one year may not be sufficient to cover the marketing-related expenses the
Distributor has incurred. Therefore, it may take the Distributor a number of
years to recoup these expenses.

SHAREHOLDER SERVICES

The Funds may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing Shareholder services and
maintaining Shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.

SUPPLEMENTAL PAYMENTS

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

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

SUBACCOUNTING SERVICES

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

REDEMPTION IN KIND

Although the Funds intend to pay Share redemptions in cash, they reserve the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Funds' portfolio securities.

Because the Funds have elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Funds are obligated to pay Share redemptions to any one
Shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Funds' Board determines that payment should be in kind. In such a
case, the Funds will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Funds determine their NAV.
The portfolio securities will be selected in a manner that the Funds' Board
deems fair and equitable and, to the extent available, such securities will be
readily marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, Shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

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

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

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

Each Share of each Fund gives the Shareholder one vote in Trustee elections and
other matters submitted to Shareholders for vote. All Shares of each Fund have
equal voting rights, except that in matters affecting only a particular Fund
class are entitled to vote.

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

As of November 17, 1999, the following Shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares of the following Funds:

STOCK FUND - CLASS R SHARES

EAMCO - Riggs Funds, Washington, D.C., owned approximately 3,717,662 Shares
(60.00%); EAMCO Trustee #01769201, FBO Collier Shannon Profit Sharing,
Washington, D.C., owned approximately 404,757 Shares (6.53%); EAMCO for Nuclear
Energy Institute Employees Saving Plan #02121601, owned approximately 346,670
Shares (5.59%); and EAMCO Trustee #01769101, FBO Collier Shannon 401k,
Washington, D.C., owned approximately 318,853 Shares (5.15%).

STOCK FUND - CLASS B SHARES

Riggs Bank N.A., Custodian for the IRA of Roger D. Winston, Rockville, MD, owned
approximately 3,120 Shares (46.45%); Riggs Bank, N.A., Custodian for the IRA of
Jeanne C. Nash, Oakton, VA, owned approximately 684 Shares (10.18%); Donaldson
Lufkin Jenrette Securities Corporation, Inc., Jersey City, NJ, owned
approximately 602 Shares (8.96%); and Roberto Palacios, Washington, D.C., owned
approximately 368 Shares (5.48%).

SMALL COMPANY STOCK FUND - CLASS R SHARES

EAMCO - Riggs Funds, Washington, D.C., owned approximately 2,620,044 Shares
(83.80%).

SMALL COMPANY STOCK FUND - CLASS B SHARES

Donaldson Lufkin Jenrette Securities Corporation Inc., Jersey City, NJ, owned
approximately 3,715 Shares (37.69%); Riggs Bank N.A., custodian for the IRA of
Roger D. Winston, Rockville, MD, owned approximately 1,705 Shares (17.30%);
Riggs Bank N.A., custodian for the IRA of Jeanne C. Nash, Oakton, VA, owned
approximately 781 Shares (7.93%); Issa J. Boullata and Marita S. Boullata,
Montreal, Quebec, Canada, owned approximately 551 Shares (5.60%); and Carmel M.
Horton, Washington, D.C., owned approximately 533 Shares (5.41%).

U.S. GOVERNMENT SECURITIES FUND - CLASS R SHARES

EAMCO - Riggs Funds, Washington, D.C., owned approximately 2,978,704 Shares
(80.20%).

PRIME MONEY MARKET FUND - CLASS R SHARES

Libron Group, Inc., Sarasota, FL, owned approximately 521,375 Shares (18.30%);
Kathleen M. Caputo, Washington, D.C., owned approximately 256,900 Shares
(9.02%); Community Development Co., Rockville, MD, owned approximately 205,445
Shares (7.21%); Network Security Technologies, Inc., Leesburg, VA, owned
approximately 201,902 Shares (7.09%); The Better Business Bureau of Metropolitan
Washington, D.C., Washington, D.C., owned approximately 191,013 Shares (6.71%);
and Jean S. Seline, Washington, D.C., owned approximately 157,555 Shares
(5.53%).

PRIME MONEY MARKET FUND - CLASS Y SHARES

EAMCO - Riggs Funds, Washington, D.C., owned approximately 163,256,560 Shares
(57.08%): Riggs Bank N.A., Washington, D.C., owned approximately 45,300,000
Shares (15.84%); and National Geographic Society, Washington, D.C., owned
approximately 22,229,388 Shares (7.77%).

U.S. TREASURY MONEY MARKET FUND - CLASS R SHARES

Peter N.G. Schwartz, Washington, D.C., owned approximately 1,216,997 Shares
(42.24%); St. Alban's Episcopal Church, Washington, D.C., owned approximately
757,254 Shares (26.28%); McClure Gerard & Neuenschwander, Inc., Washington,
D.C., owned approximately 350,937 Shares (12.18%); and Janet B. Nunnelley
Trustee, Washington, D.C., owned approximately 201,467 Shares (6.99%).

U.S. TREASURY MONEY MARKET FUND - CLASS Y SHARES

EAMCO - Riggs Funds, Washington, D.C., owned approximately 75,918,206 Shares
(61.01%); Hare & Co., New York, NY, owned approximately 12,246,305 Shares
(9.84%); EAMCO Trustee #02138901, FBO Monumental Investment Group Profit Sharing
Plan, Washington, D.C., owned approximately 10,632,683 Shares (8.54%); and Riggs
Bank N.A., Washington, D.C., owned approximately 7,275,000 Shares (5.85%).

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

TAX INFORMATION

FEDERAL INCOME TAX

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

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

FOREIGN INVESTMENTS

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

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

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

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

WHO MANAGES AND PROVIDES SERVICES TO THE FUNDS?

BOARD OF TRUSTEES

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

As of November 17, 1999, the Funds' Board and Officers as a group owned less
than 1% of the Funds' outstanding Class R, Y and B Shares.

<PAGE>

NAME AGGREGATE
BIRTH DATE COMPENSATION
ADDRESS FROM TRUST
POSITION WITH TRUST PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS

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

THOMAS G. BIGLEY Director or Trustee of the Federated Fund $1412.26
Birth Date: February 3, Complex; Director, Member of Executive
1934 Committee, Children's Hospital of Pittsburgh;
15 Old Timber Trail Director, Robroy Industries, Inc. (coated
Pittsburgh, PA steel conduits/computer storage equipment);
TRUSTEE formerly: Senior Partner, Ernst & Young LLP;
Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of
Executive Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated Fund $1553.73
Birth Date: June 23, Complex; President, Investment Properties
1937 Corporation; Senior Vice President,
Wood/Commercial Dept. John R. Wood and Associates, Inc., Realtors;
John R. Wood Partner or Trustee in private real estate
Associates, Inc. ventures in Southwest Florida; formerly:
Realtors President, Naples Property Management, Inc.
3255 Tamiami Trial and Northgate Village Development Corporation.

North Naples, FL

TRUSTEE

NICHOLAS CONSTANTAKIS Director or Trustee of the Federated Fund $1412.26
Birth Date: September Complex; formerly: Partner, Andersen
3, 1939 Worldwide SC.
175 Woodshire Drive

Pittsburgh, PA

TRUSTEE

JOHN F. CUNNINGHAM Director or Trustee of some of the Federated $0
Birth Date: March 5, Fund Complex; Chairman, President and Chief
1943 Executive Officer, Cunningham & Co., Inc.
353 El Brillo Way (strategic business consulting); Trustee
Palm Beach, FL Associate, Boston College; Director, Iperia
TRUSTEE Corp. (communcations/software); formerly:
Director, Redgate Communications and EMC Corporation
(computer storage systems).

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

Inc.

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund $1412.26
Birth Date: October 11, Complex; Professor of Medicine, University of
1932 Pittsburgh; Medical Director, University of
3471 Fifth Avenue Pittsburgh Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and Internist,
Pittsburgh, PA University of Pittsburgh Medical Center;
TRUSTEE Member, National Board of Trustees, Leukemia
Society of America.

PETER E. MADDEN Director or Trustee of the Federated Fund $1446.23
Birth Date: March 16, Complex; formerly: Representative,
1942 Commonwealth of Massachusetts General Court;
One Royal Palm Way President, State Street Bank and Trust
100 Royal Palm Way Company and State Street Corporation.
Palm Beach, FL

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

CHARLES F. MANSFIELD, Director or Trustee of some of the Federated $0
JR. Fund Complex; Management Consultant.

Birth Date: April 10,

1945 Previous Positions: Chief Executive Officer,
80 South Road PBTC International Bank; Partner, Arthur
Westhampton Beach, NY Young & Company (now Ernst & Young LLP);
TRUSTEE Chief Financial Officer of Retail Banking

Sector, Chase Manhattan Bank; Senior Vice
President, Marine Midland Bank; Vice
President, Citibank; Assistant Professor of
Banking and Finance, Frank G. Zarb School of
Business, Hofstra University.

JOHN E. MURRAY, JR., Director or Trustee of the Federated Fund $1446.23
J.D., S.J.D. Complex; President, Law Professor, Duquesne
Birth Date: December University; Consulting Partner, Mollica &
20, 1932 Murray; Director, Michael Baker Corp.
President, Duquesne (engineering, construction, operations, and
University technical services).
Pittsburgh, PA
TRUSTEE Previous Positions: Dean and Professor of
Law, University of Pittsburgh School of Law; Dean and
Professor of Law, Villanova University School of Law.

MARJORIE P. SMUTS Director or Trustee of the Federated Fund $1412.26
Birth Date: June 21, Complex; Public
1935 Relations/Marketing/Conference Planning.
4905 Bayard Street
Pittsburgh, PA Previous Positions: National Spokesperson,
TRUSTEE Aluminum Company of America; television
producer; business owner.

JOHN S. WALSH Director or Trustee of some of the Federated $339.20
Birth Date: November Fund Complex; President and Director, Heat
28, 1957 Wagon, Inc. (manufacturer of construction
2007 Sherwood Drive temporary heaters); President and Director,
Valparaiso, IN Manufacturers Products, Inc. (distributor of
TRUSTEE portable construction heaters); President,
Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh
& Kelly, Inc. (heavy highway contractor);
formerly: Vice President, Walsh & Kelly, Inc.

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

<PAGE>

EDWARD C. GONZALES* Trustee or Director of some of the Funds in
Birth Date: October 22, the Federated Fund Complex; President, $0
1930 Executive Vice President and Treasurer of
Federated Investors some of the Funds in the Federated Fund
Tower Complex; Vice Chairman, Federated Investors,
1001 Liberty Avenue Inc.; Vice President, Federated Investment
Pittsburgh, PA Management Company and Federated Investment

PRESIDENT AND TREASURER Counseling, Federated Global Investment
Management Corp. and Passport Research, Ltd.;
Executive Vice President and Director,
Federated Securities Corp.; Trustee,
Federated Shareholder Services Company.

JOHN W. MCGONIGLE Executive Vice President and Secretary of the
Birth Date: October 26, Federated Fund Complex; Executive Vice $0
1938 President, Secretary, and Director, Federated
Federated Investors Investors, Inc.; Trustee, Federated
Tower Investment Management Company and Federated
1001 Liberty Avenue Investment Counseling; Director, Federated
Pittsburgh, PA Global Investment Management Corp., and
EXECUTIVE VICE Federated Services Company and Federated
PRESIDENT AND SECRETARY Securities Corp.

RICHARD B. FISHER President or Vice President of some of the

Birth Date: May 17, 1923 Funds in the Federated Fund Complex; Director $0
Federated Investors or Trustee of some of the Funds in the

Tower Federated Fund Complex; Executive Vice
1001 Liberty Avenue President, Federated Investors, Inc.;
Pittsburgh, PA Chairman and Director, Federated Securities Corp.

VICE PRESIDENT

- ------------------------------------------------------------------------------------------
JOSEPH S. MACHI Vice President and Assistant Treasurer of $0
Birth Date: May 22, 1962 some of the Funds.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA

</TABLE>

VICE PRESIDENT

* AN ASTERISK DENOTES A TRUSTEE WHO IS DEEMED TO BE AN INTERESTED PERSON AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940.

# A POUND SIGN DENOTES A MEMBER OF THE BOARD'S EXECUTIVE COMMITTEE, WHICH
HANDLES THE BOARD'S RESPONSIBILITIES BETWEEN ITS MEETINGS.

+ MR. DONAHUE IS THE FATHER OF J. CHRISTOPHER DONAHUE, EXECUTIVE VICE
PRESIDENT OF THE TRUST.

++ MR. WALSH BECAME A MEMBER OF THE BOARD OF TRUSTEES ON JANUARY 1, 1999.
MESSRS. CUNNINGHAM AND MANSFIELD BECAME MEMBERS OF THE BOARD ON JUNE 15,
1999. MESSRS. CUNNINGHAM AND MANSFIELD DID NOT RECEIVE ANY FEES AS OF THE
FISCAL YEAR END OF THE TRUST.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for
the Funds. The Adviser and Riggs Investment Management Corp. ("RIMCO") are
subsidiaries of Riggs National Corporation, a bank holding company.

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

SUB-ADVISER

The Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond
Fund, Intermediate Tax Free Bond Fund, Long Term Tax Free Bond Fund, Prime Money
Market Fund and the U.S. Treasury Money Market Fund is sub-advised by RIMCO.
Pursuant to the terms of an investment sub-advisory agreement between the
Advisor and RIMCO (Sub-Advisor), the Sub-Advisor manages the Funds' assets,
including buying and selling portfolios securities.

The Large Cap Growth Fund is sub-advised by J. Bush & Co. Pursuant to the
terms of an investment sub-advisory agreement between the Adviser and J. Bush &
Co. (Sub-Adviser), the Sub -Adviser manages the Funds' assets, including buying
and selling portfolio securities.

OTHER RELATED SERVICES

Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.

BROKERAGE TRANSACTIONS

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

RESEARCH SERVICES

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

For the fiscal years ended April 30, 1999, 1998 and 1997, the Stock Fund paid
total brokerage commissions of $187,811, $245,522 and $175,381, respectively,
and the Small Company Stock Fund paid total brokerage commissions of $125,313,
$107,288, and $72,366, respectively.

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

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Funds. Federated Services Company provides
these at an annual rate of 0.16% of the average aggregate daily net assets of
the Trust.

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

CUSTODIAN

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

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

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

INDEPENDENT AUDITORS

The independent auditor for the Fund, Arthur Andersen LLP, plans and performs
its audit so it may provide an opinion as to whether each Fund's financial
statements and financial highlights are free of material misstatement.

FEES PAID BY THE FUNDS FOR SERVICES

- -------------- ------------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C>
FUND ADVISORY FEE PAID/ SHAREHOLDER SERVICES FEE ADMINISTRATIVE FEE PAID
ADVISORY FEE WAIVED PAID

---------------------------- ---------------------------
------------------------------- ---------------------------- ---------------------------
FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR ENDED
APRIL 30, APRIL 30, APRIL 30,

$0 $78,554 $99,633 $211(B)
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
SMALL $333,762/ $338,723/ $184,690/ $85,927(R) $53,392 $71,963 $58,587 $58,191 $49,978
COMPANY

STOCK FUND $0 $36,697 $105,949 $228(B)
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
U.S. $277,475/ $246,668/ $255,588/ $82,762 $59,058 $88,771 $51,778 $48,888 $51,473
GOVERNMENT

SECURITIES $147,987 $131,556 $136,314
FUND

- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
PRIME MONEY $1,652,495/$1,803,267$1,954,745/$824,862 $130,369 $148,946 $462,021 $478,888 $497,453
MARKET FUND

$0 $409,724 $676,608
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
U.S. $635,522/ $704,027/ $672,065/ $312,575 $56,082 $68,994 $177,826 $186,366 $171,345
TREASURY

MONEY MARKET $0 $119,268 $173,436
FUND

- -------------------------------------------------------------------------------------------------------
(R) Class R Shares (B) Class B Shares

</TABLE>

<PAGE>

- ---------------------------- -----------------------------
FUNDS FOR THE FISCAL YEAR ENDED

APRIL 30, 1999

-----------------------------
-----------------------------
12B-1 FEE

-----------------------------
-------------- --------------
CLASS R CLASS B
SHARES SHARES

- ---------------------------- -------------- --------------
- ---------------------------- -------------- --------------
STOCK FUND $241,118 $653
- ---------------------------- -------------- --------------
- ---------------------------- -------------- --------------
SMALL COMPANY STOCK FUND $95,808 $709

- ---------------------------- -------------- --------------
- ---------------------------- -------------- --------------
U.S. GOVERNMENT SECURITIES $92,719 ---
FUND

- ---------------------------- -------------- --------------
- ---------------------------- -------------- --------------
PRIME MONEY MARKET FUND $17,064 ---
- ---------------------------- -------------- --------------
- ---------------------------- -------------- --------------
U.S. TREASURY MONEY MARKET $14,901 ---
FUND

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

Fees are allocated among classes based on their pro rata Share of Fund assets,
except for marketing (Rule 12b-1) fees and Shareholder services fees, which are
borne only by the applicable class of Shares.

HOW DO THE FUNDS MEASURE PERFORMANCE?

The Funds may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.

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

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

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS AND YIELD AND EFFECTIVE YIELD

<PAGE>

<S> <C> <C> <C>
- ---------------- ------------------------------- ------------------------- -------------------------
FUND AVERAGE ANNUAL TOTAL RETURN YIELD EFFECTIVE YIELD
for the following periods for the 7-day period for the 7-day period

ended April 30, 1999 ended ended
April 30, 1999/ April 30, 1999
for the 30-day period

ended
April 30, 1999

One Year One Year One Year SHARES SHARES SHARES SHARES SHARES
Five Year Five Five
Since Year Years
Inception Since Since

Inception Inception

STOCK FUND N/A
13.80%

- ---------------- ----------- --------- --------- -------- -------- ------- ------- --------- -------
</TABLE>

TOTAL RETURN

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

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

YIELD

With respect to the Stock Fund, Small Company Stock Fund, Large Cap Growth Fund,
U.S. Government Securities Fund, Bond Fund, Intermediate Tax Free Bond Fund and
the Long Term Tax Free Bond Fund, the yield of Shares is calculated by dividing:
(i) the net investment income per Share earned by the Shares over a 30-day
period; by (ii) the maximum offering price per Share on the last day of the
period. This number is then annualized using semi-annual compounding. This means
that the amount of income generated during the 30-day period is assumed to be
generated each month over a 12-month period and is reinvested every six months.
The effective yield is calculated by compounding the unannualized base-period
return by: adding one to the base-period return, raising the sum to the 365/7th
power; and subtracting one from the result. The yield and effective yield do not
necessarily reflect income actually earned by Shares because of certain
adjustments required by the SEC and, therefore, may not correlate to the
dividends or other distributions paid to Shareholders.

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

<PAGE>

With respect to the Prime Money Market Fund and the U.S. Treasury Money Market
Fund, the yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated 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 effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

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

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

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

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

Advertising and sales literature for the Funds may also include statements
describing the history of Riggs Bank. For example, reference may be made to
Riggs Bank's heritage of serving historical and political figures and financing
projects that have been important to the growth of the United States.

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

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

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

CONSUMER PRICE INDEX (CPI) is the measure of change in consumer prices, as
determined by a monthly survey of the U.S. Bureau of Labor Statistics. Many
pension and employment contracts are tied to changes in consumer prices, as
protection against inflation and reduced purchasing power. Among the CPI
components are housing costs, food, transportation, and electricity. The CPI is
also known as the cost-of-living index.

STOCK FUND:

o 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.

o 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.

o 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.

SMALL COMPANY STOCK FUND:

o 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 offering price over a specific period of time. From time to time,
the Fund will quote its Lipper ranking in the "index funds" category
in advertising and sales literature.

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

o RUSSELL 2000 INDEX is a broadly diversified index consisting of
approximately 2,000 small capitalization common stocks that can be
used to compare to the total returns of funds whose portfolios are
invested primarily in small capitalization stocks.

o STANDARD & POOR'S SMALL STOCK INDEX is a broadly diversified,
unmanaged, index consisting of approximately 600 small capitalization
common stocks that can be used to compare to the total returns of
funds whose portfolios are invested primarily in small capitalization
common stocks.

LARGE CAP GROWTH FUND:

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

U.S. GOVERNMENT SECURITIES FUND:

o 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.

o 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.

o 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.

o 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.

o 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).

o MERRILL LYNCH CORPORATE & GOVERNMENT MASTER INDEX is an unmanaged
index comprised of approximately 4,821 issues which include corporate
debt obligations rated BBB or better and publicly issued,
non-convertible domestic debt of the U.S. government or any agency
thereof. These quality parameters are based on composites of ratings
assigned by Standard and Poor's Ratings Group and Moody's Investors
Service, Inc. Only notes and bonds with a minimum maturity of one year
are included.

o 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).

BOND FUND:

o LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX is composed of all
bonds that are investment grade rated Baa or higher by Moody's or BBB
or higher by S&P, if unrated by Moody's. Issues must have at least one
year to maturity. Total return comprises price
appreciation/depreciation and income as a percentage of the original
investment.

INTERMEDIATE TAX FREE BOND FUND:

o LEHMAN MUNICIPAL INDEX/3 YEAR is an unmanaged index of municipal bonds
issued after January 1, 1991 with a minimum credit rating of at least
Baa, been issued as part of a deal of at least $50 million, have a
maturity value of at least $3 million and a maturity range of 1-5
years. As of January 1996 the index also includes zero coupon bonds
and bonds subject to the Alternative Minimum Tax.

o 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.

o 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.

o 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.

LONG TERM TAX FREE BOND FUND:

o LEHMAN BROTHERS MUNICIPAL INDEX are broad market performance
benchmarks for the tax-exempt bond market. As of December 1995,
approximately 29,300 bonds were included in the Municipal Bond Index
with a market value of $443 billion. To be included in the Lehman
Brothers Municipal Bond Index, bonds must have a minimum credit rating
of at least Baa. They must have an outstanding par value of at least
$3 million and be issued as part of a transaction of at least $50
million.

The index includes both zero coupon bonds and bonds subject to the
Alternative Minimum tax.

o 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.

PRIME MONEY MARKET FUND:

o 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.

o 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:

o 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.

o 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.

o 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.

FINANCIAL INFORMATION

The Financial Statements for the Stock Fund, Small Company Stock Fund, U.S.
Government Securities Fund, Prime Money Market Fund and the U.S. Treasury Money
Market Fund for the fiscal year ended April 30, 1999, are incorporated herein by
reference to the Annual Report to Shareholders of the Riggs Funds dated April
30, 1999.

<PAGE>

APPENDIX

STANDARD AND POOR'S LONG-TERM DEBT 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

CC--The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC debt rating.

C--The rating C typically is applied to debt subordinated to senior debt which
is assigned an actual or implied CCC debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

MOODY'S INVESTORS SERVICE, INC. LONG-TERM 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.

BA--Bonds which are BA are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

CAA--Bonds which are rated CAA are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

CA--Bonds which are rated CA represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C--Bonds which are rated C are the lowest-rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

FITCH IBCA, INC. LONG-TERM DEBT 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.

<PAGE>

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 F-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.

BB--Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.

B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC--Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C--Bonds are imminent default in payment of interest or principal.

MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATINGS

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 earning coverage of fixed financial charges and high
internal cash generation; and

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

PRIME-2--Issuers rated Prime-1 (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.

STANDARD AND POOR'S COMMERCIAL PAPER RATINGS

A-1--This designation 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 sign (+) 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. 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.

BB--Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB rating.

<PAGE>

B--Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.

CCC--Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.

FITCH IBCA, INC. COMMERCIAL PAPER RATING DEFINITIONS

FITCH-1--(Highest Grade) Commercial paper assigned this rating is regarded as
having the strongest degree of assurance for timely payment.

FITCH-2--(Very Good Grade) Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than the strongest issues.

<PAGE>

ADDRESSES

RIGGS FUNDS

CLASS R SHARES, CLASS Y SHARES, CLASS B SHARES

5800 Corporate Drive
Pittsburgh, PA 15237-7010

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

INVESTMENT ADVISER
Riggs Bank, N.A.
800 17th Street N.W.

Washington, D.C. 20006-3950

SUB-ADVISER

Riggs Investment Management Corp.
800 17th Street N.W.
Washington, D.C. 20006-3950

(Sub-Adviser to the Stock Fund, Small Company Stock Fund, U.S. Government
Securities Fund, Bond Fund, Intermediate Tax Free Bond Fund, Long Term Tax Free
Bond Fund, Prime Money Market Fund and the U.S. Treasury Money Market Fund)

J. Bush & Co.
55 Whitney Avenue
New Haven, CT 06510

(Sub-Adviser to the Large Cap Growth Fund)

CUSTODIAN
Riggs Bank N.A.
Riggs Funds

5700 RiverTech Court
Riverdale, MD 20737-1250

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company
P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812

CUSIP 76656A 401 CUSIP 76656A 807
CUSIP 76656A 302 CUSIP 76656A 799
CUSIP 76656A 203 CUSIP 76656A 880
CUSIP 76656A 104 CUSIP 76656A 500
CUSIP 76656A 849 CUSIP 76656A 773
CUSIP 76656A 815 CUSIP 76656A 872
CUSIP 76656A 708 CUSIP 76656A 864
CUSIP 76656A 781 CUSIP 76656A 856
CUSIP 76656A 609

PART C. OTHER INFORMATION.

Item 23. EXHIBITS:

(a) (i) Conformed Copy of Declaration of Trust of the Registrant; (1)
(ii) Conformed copy of Amendment No. 3 to the Declaration of Trust of
the Registrant; (8)
(iii) Conformed copy of Amendment No. 4 to the Declaration of Trust of
the Registrant; (8)
(iv) Conformed copy of Amendment No. 5 to the Declaration of Trust of
the Registrant;(8)
(v) Conformed copy of Amendment No. 6 to the Declaration of Trust of
the Registrant; (15)
(vi) Conformed copy of Amendment No. 7 to the Declaration of Trust of
the Registrant; (15)

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

(c) (i) Copy of Specimen Certificate for Shares of Beneficial Interest
of RIMCO Monument U.S. Treasury Money Market Fund, RIMCO Monument
Bond Fund and RIMCO Monument Stock Fund;(2)

(ii) Copy of Specimen Certificate for Shares of Beneficial Interest
of RIMCO Monument Small Capitalization Equity Fund;(6)

(iii) Copy of Specimen Certificate for Shares of Beneficial Interest
of RIMCO Monument Prime Money Market Fund - Class A Shares and
Class B Shares; (8)

(d) Conformed copy of Investment Advisory Contract of the Registrant
and Exhibits A through E of the Investment Advisory Contract; (7)

(e) (i) Conformed copy of Distributor's Contract of the Registrant and
Exhibits A and B thereto;(7)

(ii) Conformed copy of Exhibit C to Registrant's Distributor's
Contract;(10)

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed May 9, 1991. (File Nos. 33-40428 and
811-6309).

2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed July 19, 1991. (File Nos. 33-40428 and
811-6309).

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed June 28, 1994. (File Nos. 33-40428 and
811-6309).

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed June 27, 1995. (File Nos. 33-40428 and
811-6309).

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed October 10, 1995. (File Nos. 33-40428
and 811-6309).

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed June 26, 1997. (File Nos. 33-40428 and
811-6309).

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed September 10, 1999. (File Nos. 33-40428
and 811-6309).

<PAGE>

(iii) Conformed copy of Exhibits D & E to Registrant's
Distributor's Contract; (13) (iv) Conformed copy of
Exhibits F & G to Registrant's Distributor's Contract;
(15)

(f) Not applicable;

(g) (i) Conformed copy of Custodian Agreement of the Registrant;(1)
(ii) Copy of Custodial Compensation;(11)
(iii) Conformed copy of Custody Agreement between
Riggs Bank N.A and The Bank of New York dated June 8, 1998; (13)
(h)(i) Conformed copy of Transfer Agency and Service Agreement;(5)
(ii) Conformed copy of Administrative Services
Agreement; (5)

(iii) Conformed copy of Shareholder Services Agreement;(12)
(iv) Conformed Copy of Shareholder Services Plan;(12)

(i) Conformed copy of Opinion and Consent of Counsel as to legality
of shares being registered; (9)
(j) Conformed copy of Consent of Independent Auditor; (14)
(k) Not applicable;
(l) Conformed copy of Initial Capital Understanding; (9)
(m) (i) Conformed copy of Distribution Plan of the Registrant; (8)
(ii) Conformed copy of Exhibits B & C to the Distribution Plan of the
Registrant;(13)
(iii) Copy of Registrant's Rule 12b-1 Agreement; (8)

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed May 9, 1991. (File Nos. 33-40428 and
811-6309).

5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed June 28, 1994. (File Nos. 33-40428 and
811-6309).

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed October 10, 1995. (File Nos. 33-40428
and 811-6309).

9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed June 27, 1996. (File Nos. 33-40428 and
811-6309).

11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed April 24, 1998. (File Nos. 33-40428 and
811-6309).

12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed June 29, 1998. (File Nos. 33-40428 and
811-6309).

13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed June 18, 1999. (File Nos. 33-40428 and
811-6309).

14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed August 26, 1999. (File Nos. 33-40428
and 811-6309).

15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed September 10, 1999. (File Nos. 33-40428
and 811-6309).

<PAGE>

(n) (i) Conformed copy of Registrant's Multiple Class Plan;(10)

(ii) Conformed copy of Registrant's Multiple Class Plan, as
Amended, Effective May 16, 1996;(10)

(iii)Conformed copy of Registrant's Multiple Class Plan, as
amended, effective July 1, 1998;(13)

(iv) Conformed copy of Multiple Class Plan, as amended, effective
September 1, 1998; (13)

(o) (i) Conformed copy of Power of Attorney of the Registrant; (15)
(ii) Conformed copy of Power of Attorney of John S. Walsh,
Trustee; (13)
(iii) Conformed copy of Power of Attorney of Charles F. Mansfield,
Trustee; (15)
(iv) Conformed copy of Power of Attorney of John F. Cunningham,
Trustee; (15)

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

None

Item 25. INDEMNIFICATION: (2)

2. Response is incorporated by reference to Registrant's Pre-Effective Amendment
No. 1 on Form N-1A filed July 19, 1991. (File Nos. 33-40428 and 811-6309).
10.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed June 26, 1997. (File Nos. 33-40428 and
811-6309). 13.Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 13 on Form N-1A filed June 18, 1999. (File Nos.
33-40428 and 811-6309). 15.Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 17 on Form N-1A filed September 10, 1999. (File
Nos. 33-40428 and 811-6309).

<PAGE>

Item 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER:

(a) The Board of Trustees governs the Funds. The Board selects and oversees the
Adviser, Riggs Bank, N.A. The Adviser manages the Funds' assets, including
buying and selling portfolio securities. The Adviser's address is 800 17th
Street N.W., Washington, D.C. 20006. The Adviser has delegated daily
management of the Funds to the following Sub-Adviser: Riggs Investment
Management Corp. ("RIMCO") Riggs Bank, N.A. is a subsidiary of Riggs
National Corporation, a bank holding company. Riggs Bank, N.A., or its
subsidiary RIMCO, has advised the Riggs Funds since September 1991, and as
of April 30, 1999, provides investment advice for assets approximating $2.7
billion. Riggs Bank, N.A. has a varied client base of approximately 100
other relationships including corporate, union and public pension plans,
foundations, endowments and associations. This Sub-Adviser is paid by the
Adviser and not by the Funds. The business address of the Sub-adviser is:
Riggs Investment Management Corp. 800 17th Street N.W. Washington, D.C.
20006-3950.
<TABLE>
<CAPTION>

(b)

Other Substantial Business, Profession,
Name Position with the Adviser Vocation or Employment

- ---------------------------- ----------------------------- --------------------------------------
<S> <C> <C>
Timothy C. Coughlin Director - Board President, Riggs National
Corporation; Vice Chairman,
Riggs Bank N.A.

Henry A. Dudley, Jr. Director - Board Senior Executive Vice President,
Riggs & Co., a division of Riggs
Bank N.A.

Lawrence I. Hebert Director - Board Director, Riggs National
Corporation, Riggs Bank N.A., Riggs
AP Bank Limited, Allied Capital II
Corp.; President and Vice Chairman
of Allbritton Communications and
Perpetual Corporation and Westfield
News Advertiser, Inc.

Philip D. Tasho Chairman of the Board Executive Director, Riggs &
Directors, Chief Co., a division of Riggs Bank
Executive N.A.
Officer and Chief
Investment Officer

Other Substantial
Business, Profession,

Name Position with Adviser Vocation or Employment

- ---------------------------- ----------------------------- --------------------------------------
Ronald A. Marsilia President and Chief Managing Director, Riggs &
Operating Officer and Co., a division of Riggs
Director - Board Bank N.A.

Nathan Reischer Director - Fixed Income, Managing Director, Riggs & Co., a
Chief Fixed Income division of Riggs Bank N.A.
Strategist and
Director-Board

Timothy M. Williams Treasurer and Director Managing Director, Riggs &
of Compliance Co., a division of Riggs Bank N.A.

Owen B. Burman Director - Director, Riggs & Co., a
Equity Research division of Riggs Bank N.A.

Sean C. Fallon Director - Director, Riggs & Co., a
Performance & Fixed division of Riggs Bank N.A.
Income Research

Rainier D. Flores Director - Assistant Director, Riggs & Co., a
Operations division of Riggs Bank N.A.

Weijiang Ga Assistant Director - Assistant Director, Riggs &
Performance Measurement Co., a division of Riggs Bank N.A.

Philip S. Brown Director - Client Director, Riggs & Co., a
Services division of Riggs Bank N.A.

Danna Maller Director - Marketing Assistant Director, Riggs &
Co., a division of Riggs Bank N.A.

Joseph E. Konrad Director-Technology Director, Riggs & Co., a division of
Riggs Bank, N.A.

Christine J. Kyle Director - Equity Trading Director, Riggs & Co, a division of
Riggs Bank N.A.

Micheal C. Sahakian Assistant Director-Client Assistant Director, Riggs & Co., a
Services division of Riggs Bank N.A.

Spencer C. Smith Assistant Director-Marketing Assistant Director, Riggs & Co., a
division of Riggs Bank N.A.

Elizabeth Shephard Farrar Assistant Director-Client Assistant Director, Riggs & Co., a
Services division of Riggs Bank N.A.

Colleen H. Doremus Fixed Income Management Director, Riggs & Co., a division of
Officer and Director Riggs Bank N.A.

Jeoffrey Strobel Director, Marketing Assistant Director, Riggs & Co., a
division of Riggs Bank N.A.

</TABLE>

<PAGE>

Item 27. PRINCIPAL UNDERWRITERS:

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

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

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

(b)

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

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

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

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

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

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

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

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

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

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

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

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

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

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

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

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

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

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

</TABLE>

<PAGE>

Item 28. LOCATION OF ACCOUNTS AND RECORDS:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

5800 Corporate Drive
Pittsburgh, PA 15237-7010

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

Recordkeeper")

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

Pittsburgh, PA 15222-3779

Riggs Bank NA and RIMCO 800 17th Street, N.W.
("Adviser") ("Sub-Adviser") Washington, D.C. 20006-3950

Riggs Bank N.A. RIMCO Funds
("Custodian") 1120 Vermont Avenue, N.W.

Washington, D.C. 20005-3598

Item 29. MANAGEMENT SERVICES: Not applicable.

Item 30. UNDERTAKINGS:

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

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, RIGGS FUNDS, certifies that it
meets all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 1st day of December, 1999.

RIGGS FUNDS

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

December 1, 1999

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

NAME TITLE DATE

By: /s/C. Grant Anderson
C. Grant Anderson Attorney In Fact December 1, 1999
ASSISTANT SECRETARY For the Persons

Listed Below

NAME TITLE

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

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

Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
Nicholas P. Constantakis Trustee
John F. Cunningham* Trustee

J. Christopher Donahue* Executive Vice President and Trustee
Lawrence D. Ellis, M.D.* Trustee
Peter E. Madden* Trustee
Charles F. Mansfield, Jr.* Trustee
John E. Murray, Jr.* Trustee
Marjorie P. Smuts* Trustee
John S. Walsh* Trustee
* By Power of Attorney