REGIONS FUNDS, 485APOS, 2000-05-26

REGIONS FUNDS
485APOS, 2000-05-26

Previous: FIDELITY ABERDEEN STREET TRUST, NSAR-B, 2000-05-26

Next: DESTRON FEARING CORP /DE/, 425, 2000-05-26

1933 Act File No. 33-44737
1940 Act File No. 811-6511

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. 20 ................................... X
------- ------

REGIONS FUNDS

(formerly, First Priority Funds)

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010
(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b) _ on _________________
pursuant to paragraph (b) 60 days after filing pursuant to paragraph (a) (i) X
on June 30, 2000 pursuant to paragraph (a) (i). 75 days after filing pursuant to
paragraph (a)(ii) on _________________ pursuant to paragraph (a)(ii) of Rule
485.

If appropriate, check the following box:

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

Copies To:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037

[Graphic Representation Omitted]

Family of Funds

COMBINED PROSPECTUS

DATED JANUARY 31, 2000

(Revised June 30, 2000)

[Graphic Representation Omitted]

Class A Shares (formerly, Trust Shares)
Class B Shares (formerly, Investment Shares)

. Regions Treasury Money Market Fund . Regions Balanced Fund
. Regions Limited Maturity Government Fund . Regions Value Fund
. Regions Fixed Income Fund . Regions Growth Fund
. Regions Aggressive Growth Fund

Table of Contents

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

<S> <C>
Risk/Return Profile 2
Regions Funds 3
What Are the Fund's Fees and Expenses? 10
Main Risks of Investing in the Regions Funds 12
Principal Strategies 14
Securities Descriptions 16
How to Buy Shares 18
Distribution of Fund Shares 20
How to Exchange Shares 21
How to Redeem Shares 22
Account and Share Information 23
Regions Funds Information 25
Portfolio Managers 26
Financial Highlights 30
</TABLE>

Shares of the Regions Funds, like shares of all mutual funds, are not bank
deposits, federally insured, or guaranteed, and may lose value.

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

Prospectus

January 31, 2000
(Revised June 30, 2000)

Risk/Return Profile

The Regions Funds (Funds) offer investment opportunities to a wide
range of investors, from investors with short-term goals who wish to
take little investment risk to those investors with long-term goals
willing to bear the risks of the stock market for potentially greater
rewards. The Capital Management Group, a unit of the Trust Division of
Regions Bank (Adviser), is the investment adviser to the Regions Funds.

Main Risks of the Funds

- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>

Fixed
Income Mortgage-
Market Securities Backed Securities

Sector Money Market

Risks Risks Risks
Risks Risks

- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C> <C>
Regions Treasury Money Market Fund

X X
- ---------------------------------------------------------------------------------------------------------
Regions Limited Maturity

Government Fund X X X
- ---------------------------------------------------------------------------------------------------------
Regions Fixed Income Fund X X X
- ---------------------------------------------------------------------------------------------------------
Regions Balanced Fund X X X
- ---------------------------------------------------------------------------------------------------------
Regions Value Fund X X X
- ---------------------------------------------------------------------------------------------------------
Regions Growth Fund X X
- ---------------------------------------------------------------------------------------------------------
Regions Aggressive Growth Fund X X X
- ---------------------------------------------------------------------------------------------------------
</TABLE>

A completed description of these risks can be found in the "Main Risks of
Investing in the Regions Funds" section.

Market Risks. The value of equity securities in the Funds' portfolios will
fluctuate and, as a result, the Funds' share prices may decline suddenly or over
a sustained period of time. Further, because the smaller companies in which some
of the Funds may invest may have unproven track records, a limited product or
service base and limited access to capital, they may be more likely to fail than
larger companies.

Fixed Income Securities Risks. Prices of fixed income securities generally fall
when interest rates rise.

Mortgage-Backed Securities Risks. Mortgage-backed securities are subject to the
risks of prepayment. When homeowners prepay their mortgages in response to lower
interest rates, the Funds will be required to reinvest the proceeds at the lower
interest rates available. Also, when interest rates fall, the price of mortgage
backed securities may not rise to as great an extent as that of other fixed
income securities

Sector Risks. Because the Funds may allocate relatively more assets to certain
industry sectors than others, the Funds' performance may be more susceptible to
any developments which affect those sectors emphasized by the Funds.

Money Market Risks. All mutual funds take investment risks. Therefore, even
though the Fund is a money market fund that seeks to maintain a stable net asset
value, it is possible to lose money by investing in the Fund.

Regions Funds
Treasury Money Market Fund

- ----------------------------------------------------------------------------
[Graphic Representation Omitted]

Goal. To provide current income consistent with stability of principal and
liquidity.

Strategy. The Fund invests in U.S. Treasury obligations maturing in 397 days or
less. The Fund will comply with the requirements of Rule 2a-7 under the
Investment Company Act of 1940, which sets forth portfolio quality and
diversification restrictions for money market mutual funds. Although the Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.

Annual Total Return (calendar years 1993-1999)

[Graphic Representation Omitted--See Appendix 1]

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 A 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.

Within the period shown in the chart, the Fund's Class A Shares highest
quarterly return was 1.40% (quarter ended June 30, 1995). Its lowest quarter
return was 0.66% (quarter ended June 30, 1993).

Average Annual Total Return through 12/31/99

Class A Class B
Calendar Period Shares Shares
- ----------------------------------------------------------------------
<S> <C> <C>
1 Year 4.28% 4.02%
- ----------------------------------------------------------------------
5 Years 4.80% 4.42%
- ----------------------------------------------------------------------
Start of Performance* 4.25% 3.86%
- ----------------------------------------------------------------------
</TABLE>

*The start of performance date for the Class A Shares and Class B Shares was
April 13, 1992.

The Fund's Class A Shares and Class B Shares Seven-Day Net Yields as of 12/31/99
were 4.75% and 4.50%, respectively. Investors may call the Fund at 1-800-433-
2829 to acquire the current Seven-Day Net Yield.

Past performance does not necessarily predict the 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.

Limited Maturity Government Fund

- ----------------------------------------------------------------------
[Graphic Representation Omitted]

Goal. To achieve current income.

Strategy. The Fund invests primarily in securities that are guaranteed as to
payment of principal and interest by the U.S. government or U.S. government
agencies or instrumentalities. Under normal circumstances, at least 65% of the
Fund's total assets will be invested in such securities. The net asset value of
the Fund is expected to fluctuate with changes in interest rates and bond market
conditions. The Adviser will attempt to minimize principal fluctuation and
increase return through, among other things, diversification, careful credit
analysis and security selection, and adjustments of the Fund's average portfolio
maturity. The Fund intends to maintain an average dollar-weighted maturity
between one and one-half and three years, although the Fund may purchase
individual securities with longer maturities.

Annual Total Return (calendar years 1994-1999)

[Graphic Representation Omitted--See Appendix 2]

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

The total returns displayed for the Fund's Class B 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.

Within the period shown in the chart, the Fund's Class B Shares highest
quarterly return was 3.39% (quarter ended June 30, 1995). Its lowest quarter
return was (0.80%) (quarter ended March 31, 1994).

The following table represents the Fund's Class A Shares and Investment Shares
Average Annual Total Returns, reduced to reflect applicable sales charges, for
the calendar periods ended December 31, 1999. The table shows the Fund's total
returns averaged over a period of years relative to the Merrill Lynch 1-3 Year
Government/Corporate Index (ML1-3), a broad-based market index. The ML1-3 is
comprised of publicly placed, non-convertible, coupon-bearing domestic debt with
maturities between 1 and 2.99 years. Total returns for the index shown do not
reflect sales charges, expenses or other fees that the SEC requires to be
reflected in the Fund's performance. Indexes are unmanaged, and it is not
possible to invest directly in an index.

Average Annual Total Return through 12/31/99

Class A Class B
Calendar Period Shares Shares ML1-3
- -------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year 2.28% (0.90%) 3.25%
- -------------------------------------------------------------------------
5 Years NA 5.48% 6.59%
- -------------------------------------------------------------------------
Start of Performance* 3.87% 4.57% 5.60%
- -------------------------------------------------------------------------
</TABLE>

*The start of performance dates for the Class A Shares and Class B Shares were
May 20, 1998, and December 12, 1993, respectively.

Fixed Income Fund

- -------------------------------------------------------------------------
[Graphic Representation Omitted]

Goal. To achieve current income with a secondary goal of capital appreciation.

Strategy. The Fund invests only in high grade debt securities. Under normal
circumstances, at least 65% of the Fund's total assets will be invested in
fixed-rate bonds and debentures. The Fund also invests in U.S. government
securities. The Fund selects securities based upon fundamental macroeconomic,
credit and market analysis. Normally, the Fund's average maturity will be
between three and ten years.

Annual Total Return (calendar years 1993-1999)

[Graphic Representation Omitted--See Appendix 3]

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

Within the period shown in the chart, the Fund's Class B Shares highest
quarterly return was 6.26% (quarter ended June 30, 1995). Its lowest quarter
return was (3.36%) (quarter ended March 31, 1994).

Average Annual Total Return through 12/31/99

Class A Class B
Calendar Period Shares Shares ML1-10
- -------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year (0.31%) (3.39%) 0.47%
- -------------------------------------------------------------------------
5 Years NA 6.61% 7.13%
- -------------------------------------------------------------------------
Start of Performance* 2.86% 5.89% 6.48%
- -------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Class A Shares and Class B Shares were
May 20, 1998, and April 20, 1992, respectively.

Balanced Fund

[Graphic Representation Omitted]

Goal. To provide total return through capital appreciation, dividends and
interest.

Strategy. The Fund invests primarily in common and preferred stock, convertible
securities, and fixed income securities. Under normal market conditions, the
Fund will maintain at least 25% of its assets in fixed-income senior securities
and at least 25% of its assets in common stocks. The remaining 50% may be
invested in these securities, as well as American Depositary Receipts (ADRs),
collateralized mortgage obligations (CMOs), U.S. government securities, or other
investments as determined by the Adviser based on the Adviser's assessment of
the economy and the markets. The Adviser may shift between types of investments
to attempt to maximize returns or reduce risk to the Fund.

Annual Total Return (calendar years 1995-1999)

[Graphic Representation Omitted--See Appendix 4]

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

Within the period shown in the chart, the Fund's Class B Shares highest
quarterly return was 10.40% (quarter ended June 30, 1997). Its lowest quarter
return was (2.43%) (quarter ended September 30, 1998).

The following table represents the Fund's Class A Shares and Class B Shares
Average Annual Total Returns, reduced to reflect applicable sales charges, for
the calendar periods ended December 31, 1999. The table shows the Fund's total
returns averaged over a period of years relative to the Standard & Poor's 500
(S&P 500 ) and the Lehman Brothers Government/Corporate Index (LBGCI), two
separate broad-based market indexes, and to the Standard & Poor's 500/Lehman
Brothers Government/Corporate Index (S&P 500/LBGCI), a blended index comprised
of 50% S&P 500 and 50% LBGCI. The S&P 500 is a capitalization-weighted index of
500 stocks designed to measure performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all major
industries. The LBGCI 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 S&P 500/LBGCI combines
the components of a stock-oriented index and a bond-oriented index to obtain
results which can be compared to the performance of a managed fund. Total
returns for the indexes shown do not reflect sales charges, expenses or other
fees that the SEC requires to be reflected in the Fund's performance. Indexes
are unmanaged, and it is not possible to invest directly in an index.

Average Annual Total Return through 12/31/99

Class A Class B S&P S&P 500/
Calendar Period Shares Shares 500 LBGCI LBGCI
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year 8.82% 5.56% 21.05% (2.15%) 9.45%
- ---------------------------------------------------------------------------
5 Years NA 15.82% 28.56% 7.61% 18.09%
- ---------------------------------------------------------------------------
Start of

Performance* 11.90% 15.77% 28.45% 7.69% 18.07%
- ---------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Class A Shares and Class B Shares were
May 20, 1998, and December 19, 1994, respectively.

Value Fund

- -------------------------------------------------------------------------
[Graphic Representation Omitted]

Goal. To provide income and growth of capital.

Strategy. The Fund invests in income-producing equity securities such as common
and preferred stock, warrants, and securities (including debt securities)
convertible into common stocks. Generally, these stocks are issued by companies
with a market capitalization of $1 billion or more. The Fund's investment
approach is based on the conviction that over the long term the economy will
continue to expand and develop and that this economic growth will be reflected
in the growth of the revenues and earnings of major corporations.

Annual Total Return (calendar years 1995-1999)

[Graphic Representation Omitted--See Appendix 5]

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

Within the period shown in the chart, the Fund's Class B Shares class highest
quarterly return was 15.60% (quarter ended June 30, 1997). Its lowest quarter
return was (9.78%) (quarter ended September 30, 1999).

Average Annual Total Return through 12/31/99

Class A Class B S&P/
Calendar Period Shares Shares Barra Value
- -------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year 5.75% 2.69% 12.38%
- -------------------------------------------------------------------------
5 Years NA 17.59% 21.75%
- -------------------------------------------------------------------------
Start of Performance* 5.57% 17.53% 21.65%
- -------------------------------------------------------------------------
</TABLE>

*The start of performance dates for the Class A Shares and Class B Shares were
May 20, 1998, and December 19, 1994, respectively.

Growth Fund

- -------------------------------------------------------------------------
[Graphic Representation Omitted]

Goal. To provide growth of capital and income.

Strategy. The Fund invests in common stock of companies with market
capitalizations of $5 billion or more. The Fund's investment approach is based
on the conviction that over the long term the economy will continue to expand
and develop and that this economic growth will be reflected in the growth of the
revenues and earnings of major corporations.

Annual Total Return (calendar years 1993-1999)

[Graphic Representation Omitted--See Appendix 6]

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

Within the period shown in the chart, the Fund's Class B Shares class highest
quarterly return was 23.93% (quarter ended December 31, 1998). Its lowest
quarterly return was (7.68%) (quarter ended September 30, 1998).

Average Annual Total Return through 12/31/99

Class A Class B S&P
Calendar Period Shares Shares 500
- -------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year 28.57% 25.33% 21.05%
- -------------------------------------------------------------------------
5 Years NA 28.58% 28.56%
- -------------------------------------------------------------------------
Start of Performance* 31.10% 19.52% 20.68%
- -------------------------------------------------------------------------
</TABLE>

*The start of performance dates for the Class A Shares and Class B Shares were
May 20, 1998, and April 20, 1992, respectively.

Aggressive Growth Fund

- -------------------------------------------------------------------------
[Graphic Representation Omitted]

Goal. To provide long-term capital appreciation.

Strategy. The Fund invests primarily in equity securities of companies with
small to medium-sized market capitalizations of $5 billion or less. The Fund may
also invest in larger companies that, in the opinion of the Adviser, possess
attractive appreciation potential. Under normal market conditions, the Fund
intends to invest in equity securities of companies with prospects for above-
average growth in revenues and/or earnings.

Performance Information for
Predecessor Collective Trust Fund

The Fund is the successor to the portfolio of a collective trust fund managed by
the Adviser since June 30, 1993. The performance data includes the performance
of the collective trust fund for periods before the Fund's registration
statement became effective. The past performance data is not necessarily
indicative of the Fund's future performance. The collective trust fund was not
registered under the Investment Company Act of 1940 ("1940 Act") and therefore
was not subject to certain investment restrictions that are imposed by the 1940
Act. If the collective trust fund had been registered under the 1940 Act, the
performance may have been adversely effected.

Annual Total Return (calendar years 1994-1999)

[Graphic Representation Omitted--See Appendix 7]

The bar chart shows the variability of the Predecessor Collective Trust Fund's
total returns on a yearly basis. The total returns reflect projected Fund
expenses before waivers.

Within the period shown in the chart, the Predecessor Collective Trust Fund's
highest quarterly return was 31.24% (quarter ended December 31, 1999). Its
lowest quarterly return was (8.26%)(quarter ended June 30, 1994)..

The following table represents the Predecessor Collective Trust Fund's Average
Annual Total Returns for the calendar periods ended December 31, 1999. The table
shows the Predecessor Collective Trust Fund's total returns averaged over a
period of years relative to the Standard & Poor's 500 Index (S&P 500) the
Standard & Poor's Midcap 400/Barra Growth Index (S&P MC400/BG), both broad-based
market indexes and the Lipper Midcap Growth Funds Index (LMGF). The S&P 500 is a
capitalization weighted index of 500 stocks designed to measure performance of
the broad domestic economy through changes in the aggregate market value of 500
stocks representing all major industries. The S&P MC400/BG is a capitalization-
weighted index of common stocks representing all major industries in the mid-
range of the U.S. stock market having the highest price-to-book ratios. Lipper
indexes measure the performance of the 30 largest mutual funds in each
prospective fund category. Total returns for the indexes shown do not reflect
sales charges, expenses or other fees that the SEC requires to be reflected in
the Fund's performance. Indexes are unmanaged, and it is not possible to invest
directly in an index.

Average Annual Total Return through 12/31/99
<TABLE>
<CAPTION>

S&P MC
Calendar Period Fund S&P 500 400/BG LMGF
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Year 38.64% 21.05% 28.65% 73.20%
- -------------------------------------------------------------------------
5 Years 27.51% 28.56% NA 27.20%
- -------------------------------------------------------------------------
Start of performance* 19.51% 22.45% NA 21.57%
- -------------------------------------------------------------------------
</TABLE>

*The start of performance date for the Predecessor Collective Trust Fund was
June 30, 1993. The performance quoted is for Class B Shares. The Fund began
offering

Class A Shares on June 30, 2000.

[Graphic Representation Omitted]

What Are the Fund's Fees and Expenses?
- -------------------------------------------------------------------------
FEES AND EXPENSES

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

Treasury

Money Limited Maturity

Market

Fund Government Fund

Class A Class
B Class A Class B
Shares

Shares Shares Shares
<S> <C>
<C> <C> <C>
Shareholder
Fees
Fees Paid Directly From Your
Investment
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) None
None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase
price
or redemption proceeds, as applicable) None
None None 3.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends (and other
Distributions)
(as a percentage of offering price) None
None None None
Redemption Fee (as a percentage of
amount redeemed, if applicable) None
None None None
Exchange Fee 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 (2) 0.50%
0.50% 0.70% 0.70%
Distribution (12b-1) Services Fee (3) None
0.40% None 0.25%
Shareholder Services Fee (4) None
0.25% None 0.25%
Other Expenses 0.19%
0.19% 0.31% 0.31%
Total Annual Fund Operating Expenses 0.69%
1.34% 1.01% 1.51%
</TABLE>

Fixed

Income Balanced

Fund Fund
Class A Class
B Class A Class B
Shares

Shares Shares Shares
<S> <C>
<C> <C> <C>
Shareholder Fees

Fees Paid Directly From Your Investment

Maximum Sales Charge (Load) Imposed on None
None None None
Purchases (as a percentage of offering
price)
Maximum Deferred Sales Charge (Load) None

3.00% None 3.00%
(as a percentage of original purchase
price

or redemption proceeds, as
applicable)
Maximum Sales Charge (Load) Imposed on None
None None None
Reinvested Dividends (and other
Distributions)
(as a percentage of offering
price)
Redemption Fee (as a percentage of None
None None None
amount redeemed, if
applicable)
Exchange Fee 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 (2) 0.75%
0.75% 0.80% 0.80%
Distribution (12b-1) Services Fee (3) None
0.30% None 0.30%
Shareholder Services Fee (4) None
0.25% None 0.25%
Other Expenses 0.21%
0.21% 0.29% 0.29%
Total Annual Fund Operating Expenses 0.96%
1.51% 1.09% 1.64%
</TABLE>

(1) Although not contractually obligated to do so, the adviser and distributor
waived certain amounts during the fiscal year ended November 30, 1999. These
amounts are shown below along with the net expenses the Funds actually paid
for the fiscal year ended November 30, 1999. With respect to Treasury Money
Market Fund, the adviser, shareholder services provider, and distributor
expect to waive certain amounts during the fiscal year ending November 30,
2000. These are shown below along with the net expenses the Fund expects to
pay for the fiscal year ending November 30, 2000.

Treasury

Money Limited Maturity

Market

Fund Government Fund

Class A Class
B Class A Class B
Shares

Shares Shares Shares
<S> <C>
<C> <C> <C>
Total Waivers of Fund Expenses 0.25%
0.65% 0.19% 0.44%
Total Actual Annual Fund Operating Expenses (after 0.44%
0.69% 0.82% 1.07%
waivers)
</TABLE>

Fixed

Income Balanced

Fund Fund
Class A Class
B Class A Class B
Shares

Shares Shares Shares
<S> <C>
<C> <C> <C>
Total Waivers of Fund Expenses 0.23%
0.53% 0.05% 0.35%
Total Actual Annual Fund Operating Expenses
(after waivers) 0.73%
0.98% 1.04% 1.29%

</TABLE>

(2) The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fees paid by
the Treasury Money Market Fund, the Limited Maturity Government Fund, the
Fixed Income Fund and the Balanced Fund (after the voluntary waiver) were
0.25%, 0.51%, 0.52% and 0.75%, respectively, for the fiscal year ended
November 30,1999.

(3) The distributor expects to voluntarily waive a portion of the distribution
(12b-1) services fee. The distributor can terminate this anticipated
voluntary waiver at any time. The distribution (12b-1) services fee the
Treasury Money Market Fund's Class B Shares expect to pay (after the
anticipated voluntary waiver) is 0.15% during the fiscal year ending
November 30, 2000. The Limited Maturity Government Fund, the Fixed Income
Fund and the Balanced Fund did not pay or accrue the distribution (12b-1)
services fee during the year ended November 30, 1999. The Limited Maturity
Government Fund, the Fixed Income Fund and the Balanced Fund do not expect
to pay or accrue the distribution (12b-1) services fee during the fiscal
year ending November 30, 2000.

(4) The shareholder services provider expects to voluntarily waive a portion of
the shareholder services fee. The shareholder services provider can
terminate this anticipated voluntary waiver at any time. The shareholder
services fee the Treasury Money Market Fund's Class B Shares expect to pay
(after the anticipated voluntary waiver) is 0.10% during the fiscal year
ending November 30, 2000.

Example

This Example is intended to help you compare the cost of investing in the
Regions Funds with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Class A Shares and
Class B Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption for Class B Shares
are also shown. The Example also assumes that your investment has a 5% return
each year and that the Fund's Class A Shares and Class B Shares operating
expenses are before waivers as estimated in the table and remain the same.
Although your actual costs and returns may be higher or lower, based on these
assumptions your costs would be:

Share Class 1 Year 3 Years 5 Years 10
Years
Class A Shares
<S> <C> <C> <C> <C>
Treasury Money Market Fund $ 70 $221 $384
$ 859

Limited Maturity Government Fund 103 322 558
1,236

Fixed Income Fund 98 306 531
1,178

Balanced Fund 111 347 601
1,329
Share Class 1 Year 3 Years 5 Years 10
Years
Class B Shares
Treasury Money Market Fund $136 $425 $734
$1,613

Limited Maturity Government Fund:
Expenses assuming redemption 454 577 824
1,802

Expenses assuming no redemption 154 477 824
1,802
Fixed Income Fund:

Expenses assuming redemption 454 577 824
1,802

Expenses assuming no redemption 154 477 824
1,802
Balanced Fund:

Expenses assuming redemption 467 617 892
1,944

Expenses assuming no redemption 167 517 892
1,944
</TABLE>

Value Fund Growth
Fund Aggressive

Class A Class B Class A
Class B Growth Fund

Shares Shares

Shares Shares Shares Shares
<S> <C> <C> <C>
<C> <C> <C>
Shareholder
Fees
Fees Paid Directly From Your
Investment
Maximum Sales Charge (Load) Imposed
on
Purchases (as a percentage of offering price) None None
None None None None
Maximum Deferred Sales Charge
(Load)
(as a percentage of original purchase
price
or redemption proceeds, as applicable) None 3.00%
None 3.00% None 3.00%
Maximum Sales Charge (Load) Imposed
on
Reinvested Dividends (and other
Distributions)
(as a percentage of offering price) None None
None None None None
Redemption Fee (as a percentage
of
amount redeemed, if applicable) None None
None None None None
Exchange Fee None None
None None None None
Annual Fund Operating
Expenses
(Before Waivers)
(5)
Expenses That Are Deducted From Fund
Assets
(as a percentage of average net
assets)
Management Fee (6) 0.80% 0.80%
0.80% 0.80% 0.75% 0.75%
Distribution (12b-1) Services Fee (7) None 0.30%
None 0.30% None 0.30%
Shareholder Services Fee None 0.25%
None 0.25% None 0.25%
Other Expenses (8) 0.22% 0.22%
0.19% 0.19% 0.23% 0.23%
Total Annual Fund Operating Expenses 1.02% 1.57%
0.99% 1.54% 0.98% 1.53%
</TABLE>

(5) Although not contractually obligated to do so, the adviser and distributor
waived certain amounts during the fiscal year ending November 30, 1999.
These are shown below along with the net expenses each Fund actually paid
for the fiscal year ending November 30, 1999. With respect to the Aggressive
Growth Fund Class B Shares, the distributor expects to waive the entire
distribution (12b-1) services fee for the fiscal year ending November 30,
2000.

Value Fund Growth
Fund Aggressive

Class A Class B Class A
Class B Growth Fund

Shares Shares

Shares Shares Shares Shares
<S> <C> <C> <C>
<C> <C> <C>
Total Waivers of Fund Expenses 0.05% 0.35%
0.05% 0.35% 0.00% 0.30%
Total Actual Annual Fund Operating Expenses

(after waivers) 0.97% 1.22%
0.94% 1.19% 0.98% 1.23%
</TABLE>

(6) The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fees paid by
the Value Fund and the Growth Fund (after the voluntary waiver) were 0.75%
and 0.75%, respectively, for the fiscal year ended November 30, 1999.

(7) The Value Fund, the Growth Fund and the Aggressive Growth Fund did not pay
or accrue the distribution (12b-1) services fee during the year ended
November 30, 1999. The Value Fund, the Growth Fund and the Aggressive Growth
Fund do not expect to pay or accrue the distribution (12b-1) services fee
during the fiscal year ending November 30, 2000.

(8) Other expenses reflect fees which the Aggressive Growth Fund expects to pay
and accrue during the fiscal year ending November 30, 2000. Other expenses
for the Aggressive Growth Class B Shares were 0.44% for the fiscal year
ended November 30, 1999.

Example

This Example is intended to help you compare the cost of investing in the
Regions Funds with the cost of investing in other mutual funds.

Share Class 1 Year 3 Years 5 Years 10
Years
Class A Shares
<S> <C> <C> <C> <C>
Value Fund $104 $325 $563
$1,248

Growth Fund 101 315 547
1,213

Aggressive Growth Fund 100 312 542
1,201

Share Class 1 Year 3 Years 5 Years 10
Years
Class B Shares
Value Fund:
Expenses assuming redemption $460 $596 $855
$1,867

Expenses assuming no redemption 160 496 855
1,867
Growth Fund:

Expenses assuming redemption 457 586 839
1,834

Expenses assuming no redemption 157 486 839
1,834
Aggressive Growth Fund:
Expenses assuming redemption 456 583 834
1,824

Expenses assuming no redemption 156 483 834
1,824
</TABLE>

Main Risks of Investing in the Regions Funds

- ------------------------------------------------------------------------
General Risks. An investment in any of the Regions Funds is not a deposit of a
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Loss of money is a risk of
investing in any of the Regions Funds.

Market Risks. The Funds are subject to fluctuations in the stock markets, which
have periods of increasing and decreasing values. Stocks have greater
volatility than debt securities. While greater volatility increases risk,
it offers the potential for greater reward.

Equity risk is also related to the size of the company issuing stock.
Companies may be categorized as having a small, medium, or large
capitalization (market value). The potential risks are higher with small-
and medium-capitalization companies and generally lower with large-
capitalization companies. Therefore, you should expect that investments in
the GROWTH FUND, the BALANCED FUND and, particularly, AGGRESSIVE GROWTH
FUND will be more volatile than broad stock market indices such as the S&P
500 or funds that invest in large-capitalization companies.

FixedIncome Securities Risks. Risks of fixed income securities will impact the
FIXED INCOME FUND and LIMITED MATURITY FUND, but might also affect the
BALANCED FUND, VALUE FUND and AGGRESSIVE GROWTH FUND.

Prices of fixed-rate debt securities generally move in the opposite
direction of interest rates. The interest payments on fixed-rate debt
securities do not change when interest rates change. Therefore, since the
price of these securities can be expected to decrease when interest rates
increase, you can expect that value of investments in a Fund may go down.
Although the Adviser attempts to anticipate interest rate movements, there
is no guarantee that it will be able to do so.

In addition, longer term debt securities will experience greater price
volatility than debt securities with shorter maturities. You can expect the
net asset values of a Fund to fluctuate accordingly.

The credit quality of a debt security is based upon the issuer's ability to
repay the security. If payments on a debt security are not paid when due,
that may cause the net asset value of a Fund holding the security to go
down.

If interest rates decline, an issuer may repay a debt security held by a
Fund prior to its maturity. If this occurs, the Adviser may have to
reinvest the proceeds in debt securities paying lower interest rates. If
this happens, a Fund may have a lower yield.

Mortgage-Backed Securities Risks. Mortgage-backed securities are subject to
risks of prepayment. This is more likely to occur when interest rates fall
becausemany borrowers refinance mortgages to take advantage of more
favorable rates. Prepayments on mortgage-backed securities are also
affected by other factors, such as the volume of home sales. A Fund's yield
will be reduced if cash from prepaid securities are reinvested in
securities with lower interest rates. The risk of prepayment may also
decrease the value of mortgage-backed securities, as will mortgage
foreclosures or defaults on the underlying obligations.

Futures and Options Risks. On behalf of a Fund, the Adviser may trade in options
or futures in order to hedge the Fund's portfolio against market shifts as
well as to increase returns. However, if the Adviser does not correctly
anticipate market movements or is unable to close an option or futures
position due to conditions in the market, the Fund could lose money. Funds
that use options and futures contracts to protect their investments or
increase their income take a risk that the prices of securities subject to
the futures or options may not correlate with the prices of the securities
in a Fund's portfolio.

Sector Risks. When the Fund emphasizes its investments in securities of issuers
in a particular industry, the Fund's performance is closely tied to events
in that industry. For example, the VALUE FUND is expected to be
overweighted in the utility, energy, transportation, basic industry and
financial sectors. The GROWTH FUND is expected to be weighted in the
technology, consumer services, consumer non-durables and consumer staples
sectors. The AGGRESSIVE GROWTH FUND will emphasize technology and
biotechnology stocks.

MoneyMarket Risks. Prices of fixed income securities rise and fall in response
to interest rate changes for similar securities. Generally, when interest
rates rise, prices of fixed income securities fall. Interest rate changes
have a greater effect on the price of fixed income securities with longer
maturities. Money market funds try to minimize this risk by purchasing
short-term securities. A Fund can also be affected by the credit quality of
the securities in its portfolio. The credit quality of a security is based
upon the ability of the issuer to repay the security. Money market funds
attempt to minimize this risk by investing in securities with high credit
quality.

Any of these risks have an adverse affect on a Fund's total return or
yield.

[Graphic Representation Omitted]

Principal Strategies

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

Treasury Money Market Fund. The Fund invests primarily in short-term obligations
of the U.S. Treasury. The Fund may also invest in short-term AAA-rated
securities of other investment companies, and engage in when-issued and
delayed-delivery transactions. Consistent with the Fund's AAA rating by
Standard & Poor's, the Fund will maintain an average maturity of 60 days or
less.

The Fund's primary objective is the production of current income while
maintaining liquidity and stability of principal. To the extent that Fund
income is derived from investments in U.S. Treasury securities, interest
earned from the Fund may be exempt from state income taxation.

Limited Maturity Government Fund. The Fund invests in high-grade debt securities
and will, under normal market conditions, have at least 65% of its total
assets invested in U.S. government securities. The Fund manager employs a
"top down" strategy in selecting investment securities. Key factors include
economic trends, inflation expectations, interest rate momentum, and yield
spreads. The Fund generally will invest in debt securities of the U.S.
Treasury and government agencies, mortgage-backed securities, and
investment-grade corporate bonds. When investing in non-governmental
securities, the Fund manager will conduct a thorough credit analysis of the
issuer, and will compare current yield spreads to historical norms.

The average maturity of the Fund's debt securities generally will be in the
range of 1.5 to 3 years. When interest rates are at higher levels and lower
rates are forecasted for the future, the Fund manager may choose to
lengthen the Fund's effective duration. Likewise, when rising interest
rates are expected, the duration of the Fund's bond portfolio may be
shortened.

Consistent with the Fund's primary objective of producing current income,
the Fund will focus on investment-grade fixed-income securities with short-
to intermediate-term maturities.

FixedIncome Fund. The Fund invests in high-grade debt securities and will,
under normal market conditions, have at least 65% of its total assets
invested in fixed-rate bonds. The Fund manager employs a "top down"
strategy in selecting investment securities.

Key factors include economic trends, inflation expectations, interest rate
momentum, and yield spreads. The Fund generally will invest in debt
securities of the U.S. Treasury and government agencies, mortgage-backed
securities, and investment-grade corporate bonds. When investing in
nongovernmental securities, the Fund manager will conduct a thorough credit
analysis of the issuer, and will compare current yield spreads to
historical norms.

The average maturity of the Fund's debt securities generally will be in the
range of 3 to 10 years. When interest rates are at higher levels and lower
rates are forecasted for the future, the Fund manager may choose to
lengthen the Fund's effective duration. Likewise, when rising interest
rates are expected, the duration of the Fund's bond portfolio may be
shortened.

Consistent with the Fund's primary objective of producing current income,
the Fund will focus on investment-grade, intermediate-term, fixed-income
securities.

Balanced Fund. The Fund invests in both equity and fixed-income investments, and
will maintain a minimum of 25% of Fund assets in each asset class. The
remaining 50% of Fund assets may be allocated between stocks and bonds, at
the discretion of the Fund manager.

The Fund's equity allocation will focus on high-quality, large-
capitalization companies. Using a blend of growth and value styles, the
Fund manager seeks to identify companies which have clearly defined
business strategies, produce consistent revenue streams from an established
customer base, enjoy significant market share in their respective
industries, produce healthy cashflows, achieve consistent increases in
sales, operating margins, and corporate earnings, and have experienced
management teams with consistent records of delivering shareholder value.
The Fund manager periodically reviews market prices in relation to the
stock's intrinsic value, and adjusts the Fund's holdings accordingly.

The Fund's fixed income allocation focuses on intermediate-term debt
securities, with an emphasis on U.S. Treasury and governmental agency
issues. Corporate bond issues with a minimum credit rating of "A" (S & P/
Moody's) at the time of purchase may also be included as yield spreads
become attractive.

ValueFund. The Fund invests in common and preferred stocks according to a
sector-weighting strategy in which attractive market valuation levels are
assigned priority over prospects for future earnings growth. The Fund
manager attempts to identify those sectors of the economy which, given the
current phase of the business cycle, are likely to realize gains in share
prices as market valuation factors readjust over time. Selected sectors and
companies will tend to possess price-to-earnings (P/E) and price-to-book
ratios below broad market averages, while dividend yields generally will be
higher than market averages. Common and preferred stocks are expected to
produce dividends, and will generally possess market capitalizations of at
least $250 million. Convertible securities of smaller companies may also be
included in the Fund's portfolio.

The Fund manager seeks to identify companies which have clearly defined
business strategies, produce consistent revenue streams from an established
customer base, enjoy significant market share in their respective
industries, produce healthy cash-flows, achieve consistent increases in
sales, operating margins, and corporate earnings, and have experienced
management teams with consistent records of delivering shareholder value.
The Fund manager periodically reviews market prices in relation to the
stock's intrinsic value, and adjusts the Fund's holdings accordingly.

Growth Fund. The Fund invests in the common stocks of companies expecting to
achieve above-average growth in earnings. The Fund manager selects industry
sectors which expect favorable earnings growth, given the current phase of
the business cycle. Future growth prospects take precedence over current
valuation levels in the stock selection process. Selected companies are
expected to exhibit large market capitalizations and above-average
price/earnings (P/E), price-to-book, and return on assets ratios. Dividend
yields may be lower than market averages, owing to the growth emphasis of
the Fund.

In addition to seeking companies with above-average potential for growth,
the Fund manager will seek to identify companies which have clearly defined
business strategies, produce consistent revenue streams from an established
customer base, enjoy significant market share in their respective
industries, produce healthy cashflows, achieve consistent increases in
sales, operating margins, and corporate earnings, and have experienced
management teams with consistent records of delivering shareholder value.
The Fund manager periodically reviews market prices in relation to the
stock's target price, and adjusts the Fund's holdings accordingly.

Aggressive Growth Fund. The Fund invests primarily in equities of small- to
medium-sized companies whose market capitalization ranges from $300 million
to $5 billion. The Fund may, as market conditions warrant, invest a portion
of is assets in large-capitalization companies exhibiting above-average
potential. The Fund manager seeks to identify companies with superior
prospects for growth in revenues and earnings. Given recent market trends
and expectations, the Fund may invest a substantial portion of its assets
in the equities of technology and technology-related companies. These
sectors have achieved substantial market growth in recent years, but
exhibit greater volatility in earnings, dividends, and share prices than
major market indices such as the S & P 500.

[Graphic Representation Omitted]

Securities Descriptions

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

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

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.

Fixedincome securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. Generally, investors in fixed income securities are creditors
of the issuer. 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 is entitled to 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 higheryields.

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

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

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). Some
GSEs are supported by the full faith and credit of the United States. Other
GSEs receive support through federal subsidies, loans or other benefits. A
few GSEs have no explicit financial support, but are regarded as having
implied support because the federal government sponsors their activities.
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 interest rate and prepayment risks of these mortgage-backed
securities.

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most common types of
corporate debt securities. The Funds may also purchase interests in bank
loans to companies. The credit risks of corporate debt securities vary
widely amongissuers.

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 payments.

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) are complicated instruments that
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.

In addition, 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 prices tend to
increase when interest rates rise (and prepayments fall), making IOs a
useful hedge against interest rate risk.

Demand Master Notes. Demand master notes are short-term borrowing arrangements
between a corporation or government agency and an investor. These notes are
payable (in full or in part) on demand by either party, usually with one to
seven days notice. They generally pay a floating or variable interest rate,
and the principal amount may be periodically increased or decreased at the
investor's option.

Portfolio Turnover. Although the Funds do not intend to invest for the purpose
of seeking short-term profits, securities will be sold without regard to
the length of time they have been held when the Funds' Adviser believes it
is appropriate to do so in light of a Fund's investment goal. A higher
portfolio turnover rate involves greater transaction expenses which must be
borne directly by a Fund (and thus, indirectly by its shareholders), and
impact Fund performance. In addition, a high rate of portfolio turnover may
result in the realization of larger amounts of capital gains which, when
distributed to that Fund's shareholders, are taxable to them.

Temporary Defensive Investments. To minimize potential losses and maintain
liquidity to meet shareholder redemptions during adverse market conditions,
the Funds may temporarily depart from its principal investment strategy by
investing up to 100% of Fund assets in cash or short-term, high quality
money market instruments (e.g., commercial paper, repurchase agreements,
etc.). This may cause a Fund to temporarily forego greater investment
returns for the safety of principal.

[Graphic Representation Omitted]

How to Buy Shares

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

What Do Shares Cost? You can buy shares of a Fund at net asset value (NAV),
without a sales charge, on the New York Stock Exchange (NYSE), Monday
through Friday, except on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving Day and Christmas Day. When the Fund receives
your transaction request in proper form, it is processed at the next
determined public offering price. NAV is determined for the Funds (other
than TREASURY MONEY MARKET FUND) at the end of regular trading (normally
3:00 p.m. Central Time) each day the NYSE is open. The NAV for the TREASURY
MONEY MARKET FUND is determined twice daily at 11:00 a.m. (Central Time)
and 3:00 p.m. (Central Time).

To open an account with the Regions Funds, your first investment must be at
least $25,000 for Class A Shares and $1,000 for Class B Shares. If you are
an officer, director, employee or retired employee of Regions Bank, or if
you establish a $50 monthly minimum addition to your account through the
Funds' Systematic Investment Program, or if you open an IRA account, the
minimum initial investment is $500 for Class B Shares. However, you can add
to your existing Regions Funds account directly for as little as $100 or
through the Funds' Systematic Investment Program for as little as $50. In
special circumstances, these minimums may be waived or lowered at the
Funds' discretion. Keep in mind that investment professionals may charge
you fees for their services in connection with your share transaction.

Sales Charge When You Redeem Class B Shares Only.

Your redemption proceeds may be reduced by a sales charge, commonly
referred to as a contingent deferred sales charge (CDSC). A CDSC applies to
the Funds that offer Class B Shares, with the exception of the TREASURY
MONEY MARKET FUND, is as follows:

Shares Held Up To: CDSC
- ---------------------------------------
<S> <C>
1 year 3.00%
- ---------------------------------------
2 years 2.00%
- ---------------------------------------
3 years 1.00%
- ---------------------------------------
4 years 0.00%
- ---------------------------------------
</TABLE>

You will not be charged a CDSC when redeeming Shares:

. if you are an officer, director, employee or retired employee of Regions Bank,
or its affiliates, and your spouse and dependent children; or

. if you are a trust customer redeeming through the Trust departments of Regions
Bank, or its affiliates. The Trust departments may charge fees for services
provided.

In addition, you will not be charged a CDSC:

. on the portion of redemption proceeds attributable to increases in the value
of your account due to increases in the NAV;

. on shares acquired through reinvestment of dividends and capital gains;

. on shares held more than 3 years after the end of the calendar month of
acquisition;

. if your redemption is a required distribution and you are over the age of
701/2 from an individual retirement account or other retirement plan;

. upon the death or disability of the last surviving shareholder(s) of the
account;

. on shares purchased prior to June 1, 1997; or

. if the Fund redeems your Shares and closes your account for not meeting the
minimum balance requirement.

If your redemption qualifies the Distributor must be notified at the time of
redemption to eliminate the CDSC.

To keep the sales charge as low as possible, the Funds will sell your shares in
the following order: . Shares that are not subject to a CDSC;

. Shares held the longest; and

. then, the CDSC is based on the NAV at the time you purchased or redeemed those
Shares, whichever is lower.

Dealer Concessions: For Class B Shares redeemed, with the exception of the
TREASURY MONEY MARKET FUND, a dealer may receive up to 100% of the CDSC.
The dealer may be advanced a portion of the CDSC at the time of purchase or
upon payment arrangements made between the dealer and the Distributor. Such
payments may be in the form of cash or promotional incentives.

How Do I Purchase Shares? Trust customers may purchase shares of any Fund by
contacting their local Trust Administrator or by telephoning Regions Bank
at 1-800-433-2829.

You may purchase Class BShares by contacting your local Regions Investment
Company, Inc. (RICI) office or telephone RICI at 1-800-456-3244. Texas
residents must purchase shares through Federated Securities Corp. at 1-800-
356-2805.

You may purchase shares through a broker-dealer, investment professional,
or financial institution (Authorized Dealers). Some Authorized Dealers may
charge a transaction fee for this service. If you purchase shares of a Fund
through a program of services offered or administered by a Authorized
Dealer or other service provider, you should read the program materials,
including information relating to fees, in conjunction with the Funds'
prospectus. Certain features of a Fund may not be available or may be
modified in connection with the program of services provided.

Your purchase order must be received by the Fund by 11:00 a.m. (Central
Time) for the TREASURY MONEY MARKET FUND or 3:00 p.m. (Central Time) for
all other Funds to get that day's NAV. Payment for the purchase of TREASURY
MONEY MARKET FUND shares is normally required the same business day. For
settlement of an order for the other Funds, payment must be received within
three business days of receipt of the order. Each Fund reserves the right
to reject any purchase request. It is the responsibility of the Trust
Administrator, RICI, any Authorized Dealer or other service provider that
has entered into an agreement with the Funds, its distributor, or
administrative or shareholder services agent, to promptly submit purchase
orders to the Funds. Orders placed through one of these entities are
considered received when the Funds are notified of the purchase or
redemption order. However, you are not the owner of Fund shares (and
therefore will not receive dividends) until payment for the shares is
received.

Distribution of Fund Shares

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

Federated Securities Corp., a subsidiary of Federated Investors, Inc., is
the principal distributor for shares of the Funds and a number of other
investment companies. The Distributor may offer certain items of nominal
value from time to time to any shareholder or investor in connection with
the sale of Fund shares. The Distributor may select brokers, dealers and
administrators (including depository or other institutions such as
commercial banks and savings associations) to provide distribution and/or
administrative services for which they will receive fees from the
distributor based upon shares owned by their clients or customers. These
services include general marketing services distributing prospectuses and
other information, providing account assistance, and communicating or
facilitating purchases and redemptions of the Funds' shares.

Rule 12b-1 Plan (Class BShares only). The Regions Funds has adopted a Rule
12b-1 Plan on behalf of the Class BShares of the Funds. The 12b-1 fee paid
by the Class BShares is as follows:

Fund 12b-1 Fee Paid as a Percentage
Class B Shares Assets

- --------------------------------------------------------------------
<S> <C>
Limited Maturity

Government Fund 0.25%
- --------------------------------------------------------------------
Fixed Income Fund 0.30%
- --------------------------------------------------------------------
Balanced Fund 0.30%
- --------------------------------------------------------------------
Value Fund 0.30%
- --------------------------------------------------------------------
Growth Fund 0.30%
- --------------------------------------------------------------------
Aggressive Growth Fund 0.30%
- --------------------------------------------------------------------
Treasury Money

Market Fund 0.40%
- --------------------------------------------------------------------
</TABLE>

The Distributor and financial intermediaries are paid a 12b-1 fee for the
sale, distribution and customer servicing of the Class B Shares of the
Funds. Because these shares pay marketing fees on an ongoing basis, your
investment cost may be higher over time than shares with different sales
charges and marketing fees.

How to Exchange Shares

Exchange Privilege. You may exchange Shares of a Fund into Shares of the same
class of another Fund at NAV by calling or writing to Regions Bank or
RICI, as appropriate. Texas residents must telephone Federated Securities
Corp. at 1-800-356-2805 to exchange shares. To do this, you must:

. meet any minimum initial investment requirements; and

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

Signatures must be guaranteed if you request an exchange into another Fund
with a different shareholder registration.

Class B Shares of any Fund may be exchanged-for Class B Shares of another
Fund without the imposition of a contingent deferred sales charge. However,
if the shareholder redeems the exchange-for shares within three years of
the original purchase of exchanged shares, a contingent deferred sales
charge will be imposed.

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

Shareholders contemplating exchanges into the Regions Funds should consult
their tax advisers since the tax advantages of each Fund may vary. An
exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction.

By Telephone: Telephone exchange instructions must be received before 3:00 p.m.
(Central Time) for Shares to be exchanged that day. Orders for exchange received
after 3:00 p.m. (Central Time) on any business day will be executed at the close
of the next business day.

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

[Graphic Representation Omitted]

How to Redeem Shares

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

You may redeem your Fund shares by several methods. You should note that
redemptions will be made only on days when the Fund computes its NAV. When
your redemption request is received in proper form, it is processed at the
next determined NAV.

Systematic Withdrawal Program (SWP) On Class B Shares

You will not be charged a CDSC on SWP redemptions if:

. you redeem 12%or less of your account value in a single year;

. you reinvest all dividends and capital gains distributions; and

. your account has a least a $10,000 balance when you establish the SWP,
(You cannot aggregate multiple Class B Share accounts to meet this
minimum balance.)

A CDSC will not be imposed on Class B Shares of the Treasury Money Market
Fund.

Additional Conditions for Redemptions

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

Signature Guarantees. In the following instances, you must have a signature
guarantee on written redemption requests:

- when you want a redemption to be sent to an address other than the
one you have on record with the Fund; -when you want the redemption
payable to someone other than the shareholder of record; or -when
your redemption is to be sent to an address of record that was
changed within the last 90 days.

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.

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

. to allow your purchase payment to clear;

. during periods of market volatility; or

. when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.

To redeem Class A Shares, trust customers of Regions Bank should telephone
their Trust Administrator. Class B Shares may be redeemed by telephoning
their local RICI office. Shareholders who purchased shares through an
Authorized Dealer should contact their Authorized Dealer for specific
instructions on how to redeem by telephone.

To redeem Shares by mail, written requests must be received in proper form
and can be made through the trust Department, RICI or any Authorized
Dealer. The redemption request should include the shareholder's name, Fund
name and class of shares, account number and the share or dollar amount to
be redeemed. It is the responsibility of the service provider to promptly
submit redemption requests to the Fund. Shareholders are encouraged to
telephone the Trust Department, or RICI for assistance in redeeming by
mail.

Redemption requests for the Funds must be received by 11:00 a.m. (Central
Time) for the TREASURY MONEY MARKET FUND or 3:00 p.m. (Central Time) for
all other Funds in order for shares to be redeemed at that day's NAV.
Redemption proceeds will normally be mailed, or wired to the shareholder's
account at Regions Bank within five business days, but in no event more
than seven days, after the request is made.

Account and Share Information

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

[Graphic Representation Omitted]

Will I be Charged a Fee for Redemption? Class A Shares of any of the Funds and
Class B Shares of the TREASURY MONEY MARKET FUND are not subject to a
redemption fee. Depending on when you redeem your Class B Shares of the
other Funds, you may be charged a fee by the Fund for redeeming your
shares. See "How to Buy Shares" - "Sales Charge When You Redeem Class B
Shares Only." You may also be charged a transaction fee if you redeem Fund
shares through an Authorized Dealer or service provider (other than RICI or
the Regions Banks). Consult your Authorized Dealer or service provider for
more information, including applicable fees.

Confirmation and Account Statements. You will receive confirmation of purchases,
redemptions and exchanges (except for systematic program transactions). The
TREASURY MONEY MARKET FUND sends you monthly confirmations to report all
transactions including dividends paid during the month. In addition, you
will receive periodic statements reporting all account activity, including
systematic program transactions, dividends and capital gains paid.

You may request photocopies of historical confirmations from prior years.
The Funds may charge a fee for this service.

Dividends and Capital Gains

Fund Dividends Declared and Paid

- -----------------------------------------------------
<S> <C>
Balanced Fund
Value Fund

Growth Fund quarterly
Aggressive Growth

Fund

- -----------------------------------------------------
Treasury Money
Market Fund

Fixed Income Fund monthly
Limited Maturity

Government Fund

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

Dividends are declared and paid to shareholders invested in a Fund on the
record date.

In addition, each Fund pays any capital gains at least annually. Your
dividends and capital gains distributions will be automatically reinvested
in additional Shares, 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 distribution, whether
or not you reinvest the distribution in shares. Therefore, you should
consider the tax implications of purchasing shares shortly before the Fund
declares a dividend or capital gain. Contact your investment professional
or the Fund for information concerning when dividends and capital gains
will be paid.

Accounts with Low Balances. Due to the high cost of maintaining accounts with
low balances, a Fund may redeem shares in your account and pay you the
proceeds if your account balance falls below the required minimum initial
investment amount. Before shares are redeemed to close an account, you will
be notified in writing and allowed 30 days to purchase additional shares to
meet the minimum.

Share Certificates. The Funds will not issue share certificates.

Tax Information

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

Federal Income Tax. The Funds send you a timely statement of your account
activity to assist you in completing your federal, state and local tax
returns. Fund distributions of dividends and capital gains are taxable to
you whether paid in cash or reinvested in the Fund. Capital gains
distributions are taxable at different rates depending upon the length of
time a Fund holds its assets.

Fund distributions are expected to be primarily dividends for the TREASURY
MONEY MARKET FUND and LIMITED MATURITY GOVERNMENT FUND and both dividends
and capital gains for all other Funds. Redemptions and exchanges are
taxable sales.

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

Regions Fund Information

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

[Graphic Representation Omitted]

Management of the Regions Funds. The Board of Trustees governs the Trust. The
Board selects and oversees the Adviser, The Capital Management Group, a
unit of the Trust Division of Regions Bank. The Adviser manages each Fund's
assets, including buying and selling portfolio securities. The Adviser's
address is 417 North 20th Street, 12th Floor, Birmingham, Alabama, 35203.

Adviser Fees. The Adviser is entitled to receive an annual investment advisory
fee equal to a percentage of each Fund's average daily net assets as
follows:

FUND ADVISER FEE
- ------------------------------------------------------------------
<S> <C>
TREASURY MONEY MARKET FUND 0.50%
- ------------------------------------------------------------------
LIMITED MATURITY GOVERNMENT FUND 0.70%
- ------------------------------------------------------------------
FIXED INCOME FUND 0.75%
- ------------------------------------------------------------------
AGGRESSIVE GROWTH FUND 0.75%
- ------------------------------------------------------------------
GROWTH FUND 0.80%
- ------------------------------------------------------------------
BALANCED FUND 0.80%
- ------------------------------------------------------------------
VALUE FUND 0.80%
- ------------------------------------------------------------------
</TABLE>

The Adviser has the discretion to voluntarily waive a portion of its fee.
However, any waivers by the Adviser are voluntary and may be terminated at any
time in its sole discretion.

Adviser's Background. The Capital Management Group is a unit of the Trust
Division of Regions Bank, which is a wholly owned subsidiary of Regions
Financial Corp., a bank holding company organized under the laws of the
State of Delaware. Regions Financial Corporation has achieved Thomson Bank
Watch's highest rating of "A," a distinction earned by less than 1% of U.S.
financial institutions. Regions Bank was selected for inclusion in the S&P
500-Standard & Poor's widely followed index of the 500 most prominent
companies in the nation. As of December 31, 1999, Regions Financial Corp.
was one of the 25 largest bank holding companies in the United States with
total assets of approximately $42.7 billion. Regions Bank and Retirement
Plan Services of America, a subsidiary of Federated Investors, each receive
a sub-transfer agent fee for sub-accounting services they provide to
certain retirement plan accounts. This fee ($10.00 per account, per year)
is, depending on which Regions Fund is charged, either equal to or less
than the fees the Funds would pay their transfer agent for these accounts
if sub-accounting hadn't been performed.

Performance Information for Predecessor Collective Trust Fund

The AGGRESSIVE GROWTH FUND is the successor to the portfolio of a collective
trust fund managed by the Adviser since June 30, 1993. The Adviser has
represented that the Fund's investment objective, policies and limitations are
all in material respects equivalent to those of the collective trust fund.

The Fund's average annual compounded total returns for the one-, three-, five-
and since inception periods ended December 31, 1999, reflecting the contingent
deferred sales charge (See the section entitled "How to Buy Shares--What Do
Shares Cost" in this prospectus) were 38.64%, 31.97%, 27.52% and 19.51%,
respectively. The Fund's average annual compounded total returns for the one-,
three-, five-, and since inception periods ended December 31, 1999, without
reflecting the contingent deferred sales charge were 41.89%, 32.19%, 27.52% and
19.49%, respectively. The quoted performance data includes the performance of
the collective trust fund for periods before the Fund's registration statement
became effective and reflects projected Fund expenses absent waivers. The past
performance data shown above is not necessarily indicative of the Fund's future
performance. The collective trust fund was not registered under the Investment
Company Act of 1940 ("1940 Act") and therefore was not subject to certain
investment restrictions that are imposed by the 1940 Act. If the collective
trust fund had been registered under the 1940 Act, the performance may have been
adversely effected.

Regions Funds Personnel
J. Kenneth Alderman, CFA

[Graphic Representation Omitted]

Director, Regions Funds

Senior Vice President. Director, Capital Management Group. Responsible for the
comprehensive investment policy of the group and the Regions Family of Mutual
Funds (1992-present). Experience: 16 years investment experience, including ten
years of investment experience with the Trust Division of Regions Bank; two
years commercial bank experience. Education: B.S., Accounting, Auburn
University, 1973; M.B.A., Florida State University, 1976; Certified Public
Accountant, 1975; National Graduate Trust School, 1985; Chartered Financial
Analyst, 1989. Affiliations: Member, Institute of Chartered Financial Analysts,
Association for Investment Management and Research, and American Institute of
Certified Public Accountants.

James L. Savage, CFA

[Graphic Representation Omitted]

Manager, Regions Funds and Portfolio Manager, Value Fund

Vice President and Senior Equity Analyst. Responsible for the day-to-day
management of the Regions Value Fund (January, 1996). Also serves as an active
member of the Capital Management Group as Director of Research, portfolio
manager and analyst. Also responsible for measuring the quarterly performance
and style specificity of Regions Funds, for supervising fund administration and
for product development. Experience: nine years investment analysis and
portfolio management. Joined Regions Bank (November, 1995) to bring further
expertise to investment team.

Previously had been a trust portfolio manager for a large regional bank in the
Southeast which utilized a value style of equity management (March, 1992 -
October, 1995). Education: B.S., Finance, Auburn University, 1987; M.S.,
Finance, Georgia State University, 1991; Chartered Financial Analyst, 1995.
Affiliations: Member, Chartered Financial Analysts, Member & Board of Directors,
Alabama Society of Financial Analysts and Association for Investment Management
and Research.

Mary Lynn Bronner, CFA

[Graphic Representation Omitted]

Portfolio Manager, Fixed Income Fund
Balanced Fund (co-manager)

Vice President, Chief Investment Strategist and Senior Fixed Income Portfolio
Manager. Responsible for the day-today management of the Regions Fixed Income
Fund (July, 1997) and co-manager of the Regions Balanced Fund. Ms. Bronner
served as portfolio manager for the Regions Limited Maturity Government Fund
from January, 1997 until taking over the Fixed Income Fund in July, 1997. She
also serves as a member of the Capital Management Group and assists other
portfolio and Fund managers in the management of institutional portfolios.
Experience: 19 years investment experience, specifically seven years as
Portfolio Manager for Regions Financial Corporation under its predecessor, First
Alabama Bank (April 1996 to the present and 1981 - 1986); seven years as a
Registered Investment Advisor with The Bronner Group (September 1989 - March
1996). Education: B.S., Finance, University of Tennessee, 1977; M.B.A., Auburn
University at Montgomery, 1980; Jurisdoctor Law, Jones Law Institute, 1984; and
Chartered Financial Analyst, 1982. Affiliations: Member, Alabama State Bar,
Institute of Chartered Financial Analysts, and Association for Investment
Management and Research.

John M. Haigler

[Graphic Representation Omitted]

Portfolio Manager, Limited Maturity Government Fund

Vice President and Portfolio Manager. Responsible for the day-to-day management
of the Regions Limited Maturity Government Fund (July, 1997). Mr. Haigler
previously served as portfolio manager of the Regions Treasury Money Market Fund
(April, 1992-December, 1993) and as portfolio manager of the Regions Limited
Maturity Government Fund (December, 1993-January, 1997). He is responsible for
management of the Trust Division's short-term income funds and for commercial
paper and certificates of deposit investments. Mr. Haigler also serves as an
active member of the Capital Management Group and as a portfolio manager and
analyst. Experience: 24 years investment experience, 33 years with Regions Bank.
Education: B.A., Huntington College, 1963. Affiliations: Member, Alabama Society
of Financial Analysts and Association for Investment Management and Research.

John E. Steiner, CFA

[Graphic Representation Omitted]

Portfolio Manager, Growth Fund
Balanced Fund (co-manager)

Vice President and Senior Equity Portfolio Manager. Responsible for the day-to-
day management of the Regions Growth Fund and co-manager of the Regions Balanced
Fund. Served as portfolio manager of the Regions Treasury Money Market Fund from
December, 1993 until taking over the Balanced Fund on June 1, 1996. He actively
manages employee benefit and personal trust accounts as well as contributes to
the formulation of equity and fixed income strategies. Experience: 15 years
investment experience, specifically Employee Benefits, Personal Trust, and
Endowments; 17 years with Regions Bank. Education: B.S., Business
Administration/Industrial Management, Auburn University, 1981; Chartered
Financial Analysts 1996. Affiliations: Member, Chartered Financial Analysts and
the Association for Investment Management and Research.

Charles A. Murray, CFA

[Graphic Representation Omitted]

Portfolio Manager, Aggressive Growth Fund

Vice President and Portfolio Manager. Responsible for the day-to-day management
of the Regions Aggressive Growth Fund (March, 1999). Served as Portfolio
Aggressive Growth Fund Manager and Analyst in the Capital Management Group
managing equity portfolios and balanced accounts since 1974. Joined Regions Bank
in June, 1972. Served as a Portfolio Manager for small/mid-cap common trust
funds, a convertible income fund and a fixed income fund from 1978 through 1992.
Portfolio Manager of the Regions Growth Fund (formerly, First Priority Equity
Fund) from 1992 through 1995. Employee Benefits account portfolio manager from
1996 through present. Education: B.S., University of Alabama, 1970; Chartered
Financial Analyst, 1993. Affiliations: Member, Alabama Society of Financial
Analysts and Association for Investment Management and Research.

David B. Rees, Jr.

[Graphic Representation Omitted]

Portfolio Manager,
Treasury Money Market Fund

Portfolio Manager. Responsible for the day-to-day management of the Regions
Treasury Money Market Fund (April, 1999). Also serves as an active member of the
Capital Management Group as a portfolio manager. Experience: Five years
investment analysis and portfolio management. Previously financial adviser with
a publicly-held national brokerage firm (January, 1995 - March, 1998). Analyst
for Capital Management Group from March 1998 through April 1999. Education:
B.S., Finance, Auburn University, 1992; M.B.A., Auburn University, 1994.

Lee S. Cox

[Graphic Representation Omitted]

Sales Manager, Regions Funds

Vice President. Responsible for sales and marketing of the Regions Funds. Works
closely with executives and brokers of Regions Investment Company on issues such
as compliance, product awareness, and product development. Provides feedback to
Regions Funds management regarding marketplace viability and reception of the
funds. Experience: two years as vice president and trust investment officer with
Regions Bank; eight years as regional vice president and investment
representative with Citigroup's Primerica; four years as legislative aide to
U.S. Senator Howell Heflin. Education: B.A., Christian Ministries, Asbury
College, 1984; M.A., Public Policy, Regent University, 1986.

Financial Highlights

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

The Financial Highlights will help you understand a Fund's financial performance
for its 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 a Fund, assuming reinvestment of any dividends and capital gains.
The following table has been audited by Deloitte &Touche LLP, the Funds'
independent auditors. Their report dated January 21, 2000 is included in the
Annual Report for the Funds, which is incorporated by reference. This table
should be read in conjunction with the Funds' financial statements and notes
thereto, which may be obtained free of charge from the Funds. Further
information about the performance of the Funds is contained in the Funds' Annual
Report dated November 30, 1999, which may be obtained free of charge.

For a share outstanding throughout each period.

Net

realized Distributions
Net Asset and

Distributions from net realized
Value, Net unrealized Total
from from net gain on
beginning investment gain(loss) on investment
investment investment
Year Ended November 30, of period income investments
operations income transactions
<S> <C> <C> <C> <C>
<C> <C>
Treasury Money Market Fund - Trust
Shares

1995 $ 1.00 0.05 -
0.05 (0.05) -
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) -
Treasury Money Market Fund - Investment
Shares

1995 $ 1.00 0.04 -
0.04 (0.04) -
1996 $ 1.00 0.04 -
0.04 (0.04) -
1997 $ 1.00 0.04 -
0.04 (0.04) -
1998 $ 1.00 0.04 -
0.04 (0.04) -
1999 $ 1.00 0.04 -
0.04 (0.04) -
Limited Maturity Government Fund - Trust
Shares

1998(a) $ 9.96 0.25 0.11
0.36 (0.25) -
1999 $10.07 0.46 (0.20)
0.26 (0.46) (0.01)
Limited Maturity Government Fund - Investment
Shares

1995 $ 9.60 0.51 0.44
0.95 (0.51) -
1996 $10.04 0.50 (0.08)
0.42 (0.50) -
1997 $ 9.96 0.49 (0.02)
0.47 (0.49) -
1998 $ 9.94 0.46 0.13
0.59 (0.46) -
1999 $10.07 0.45 (0.21)
0.24 (0.44) (0.01)
Fixed Income Fund - Trust
Shares

1992(b) $ 9.90 0.38 0.37
0.75 (0.38) -
1993 $10.27 0.51 0.50
1.01 (0.51) (0.10)
1994 $10.67 0.54 (1.01)
(0.47) (0.53) (0.20)
1995(c) $ 9.46 0.09 0.11
0.20 (0.09) -
1998(a) $10.39 0.28 0.22
0.50 (0.28) -
1999 $10.61 0.53 (0.51)
0.02 (0.53) -
Fixed Income Fund - Investment
Shares

1995 $ 9.46 0.52 0.90
1.42 (0.54) -
1996 $10.34 0.54 0.02
0.56 (0.54) -
1997 $10.36 0.58 0.02
0.60 (0.59) -
1998 $10.37 0.53 0.24
0.77 (0.53) -
1999 $10.61 0.51 (0.51)
0.00 (0.51) -
</TABLE>

Net

Ratios to assets,
Distributions in
Average Net Assets end of

excess of net Net
Asset Net Expense period
investment Total Value, end Total
Investment waiver/ (000 Portfolio
Year Ended November 30, income distributions of period return(g)
Expenses Income reimbursement(h) omitted) turnover
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Treasury Money Market Fund - Trust Shares

1995 - (0.05) $ 1.00 5.48%
0.33% 5.35% 0.50% $109,368 -
1996 - (0.05) $ 1.00 4.83%
0.52% 4.71% 0.29% $101,786 -
1997 - (0.05) $ 1.00 4.81%
0.52% 4.71% 0.25% $166,035 -
1998 - (0.05) $ 1.00 4.71%
0.47% 4.57% 0.25% $524,592 -
1999 - (0.04) $ 1.00 4.21%
0.44% 4.12% 0.25% $493,350 -
Treasury Money Market Fund - Investment Shares

1995 - (0.04) $ 1.00 5.06%
0.73% 4.98% 0.50% $ 28,930 -
1996 - (0.04) $ 1.00 4.41%
0.92% 4.31% 0.29% $ 40,619 -
1997 - (0.04) $ 1.00 4.39%
0.92% 4.31% 0.25% $ 45,960 -
1998 - (0.04) $ 1.00 4.30%
0.87% 4.17% 0.25% $ 89,673 -
1999 - (0.04) $ 1.00 3.94%
0.70% 3.89% 0.39% $119,898 -
Limited Maturity Government Fund - Trust Shares

1998(a) - (0.25) $10.07 3.59%
1.04%(i) 4.73%(i) - $ 55,627 69%
1999 - (0.47) $ 9.86 2.64%
0.82% 4.66% 0.19% $ 66,678 22%
Limited Maturity Government Fund - Investment Shares

1995 - (0.51) $10.04 10.12%
0.61% 5.26% 0.49% $ 63,078 26%
1996 - (0.50) $ 9.96 4.37%
1.01% 5.09% 0.08% $ 63,732 48%
1997 - (0.49) $ 9.94 4.81%
0.99% 4.91% - $ 79,621 40%
1998 - (0.46) $10.07 6.05%
1.12% 4.65% - $ 33,456 69%
1999 - (0.45) $ 9.86 2.39%
1.07% 4.41% 0.19% $ 46,679 22%
Fixed Income Fund - Trust
Shares

1992(b) - (0.38) $10.27 7.66%
0.77%(i) 6.02%(i) 0.29%(i) $ 96,354 44%
1993 - (0.61) $10.67 10.14%
0.84% 4.80% 0.25% $169,881 83%
1994 (0.01)(f) (0.74) $ 9.46 (4.55%)
0.79% 5.44% 0.25% $153,289 24%
1995(c) - (0.09) $ 9.57 2.11%
0.82%(i) 5.79%(i) 0.25%(i) - -
1998(a) - (0.28) $10.61 4.87%
0.97%(i) 5.19%(i) - $193,351 64%
1999 - (0.53) $10.10 0.24%
0.73% 5.18% 0.23% $215,281 18%
Fixed Income Fund - Investment
Shares

1995 - (0.54) $10.34 15.37%
1.02% 5.25% - $160,286 45%
1996 - (0.54) $10.36 5.66%
1.02% 5.38% - $152,940 52%
1997 - (0.59) $10.37 5.99%
0.97% 5.73% - $184,064 37%
1998 - (0.53) $10.61 7.60%
0.99% 5.17% - $ 23,992 64%
1999 - (0.51) $10.10 (0.01%)
0.98% 4.95% 0.23% $ 48,641 18%
</TABLE>

Effective June 30, 2000, Trust Shares will become Class A Shares and Investment
Shares will become Class B Shares.

Net Net
investment

realized Distributions

Net Asset income

and Distributions from net realized
Value, (net unrealized Total
from from net gain on
beginning operating gain(loss) on
investment investment investment
Year Ended November 30, of period loss) investments
operations income transactions
Balanced Fund - Trust Shares

<S> <C> <C> <C>
<C> <C> <C>
1998(a) $14.52 0.19 0.80
0.99 (0.19) -
1999 $15.32 0.38 1.12
1.50 (0.36) (0.49)
Balanced Fund - Investment
Shares

1995(d) $10.00 0.44 1.38
1.82 (0.36) -
1996 $11.46 0.41 1.27
1.68 (0.42) (0.21)
1997 $12.51 0.36 1.60
1.96 (0.37) (0.31)
1998 $13.79 0.35 1.96
2.31 (0.37) (0.41)
1999 $15.32 0.33 1.12
1.45 (0.32) (0.49)
Value Fund - Trust
Shares

1998(a) $17.31 0.10 (0.02)
0.08 (0.11) -
1999 $17.28 0.18 0.73
0.91 (0.17) (2.09)
Value Fund - Investment
Shares

1995(d) $10.00 0.40 1.98
2.38 (0.34) -
1996 $12.04 0.27 2.22
2.49 (0.29) (0.35)
1997 $13.89 0.22 2.94
3.16 (0.21) (0.66)
1998 $16.18 0.22 1.50
1.72 (0.21) (0.42)
1999 $17.27 0.09 0.78
0.87 (0.13) (2.09)
Growth Fund - Trust
Shares

1992(b) $ 9.86 0.14 0.77
0.91 (0.11) -
1993 $10.66 0.18 (0.03)
0.15 (0.18) (0.12)
1994 $10.51 0.25 (0.10)
0.15 (0.23) (0.07)
1995(c) $10.36 0.08 0.02
0.10 (0.08) (0.33)
1998(a) $17.81 0.02 2.27
2.29 (0.02) -
1999 $20.08 0.03 5.18
5.21 (0.01) (1.73)
Growth Fund - Investment Shares

1995 $10.36 0.18 2.10
2.28 (0.21) (0.33)
1996 $12.10 0.12 3.12
3.24 (0.15) (0.55)
1997 $14.64 0.07 3.01
3.08 (0.07) (0.76)
1998 $16.89 0.02 5.00
5.02 (0.03) (1.80)
1999 $20.08 (0.03) 5.17
5.14 - (1.73)
Aggressive Growth
Fund

1999(e) $10.00 - 3.20
3.20 - (0.62)
</TABLE>

Net

Ratios to assets,
Distributions in
Average Net Assets end of

1998(a) - (0.19) $15.32 6.89%
1.11%(i) 2.56%(i) - $ 10,409 31%
1999 - (0.85) $15.97 10.14%
1.04% 2.42% 0.05% $ 15,868 23%
Balanced Fund - Investment
Shares

1995(d) - (0.36) $11.46 18.50%
0.61%(i) 4.34%(i) 0.56%(i) $ 51,197 49%
1996 - (0.63) $12.51 15.35%
1.13% 3.60% 0.09% $ 59,321 41%
1997 - (0.68) $13.79 16.34%
1.11% 2.73% - $ 83,073 34%
1998 - (0.78) $15.32 17.49%
1.25% 2.42% - $112,260 31%
1999 - (0.81) $15.96 9.82%
1.29% 2.17% 0.05% $167,037 23%
Value Fund - Trust Shares

1998(a) - (0.11) $17.28 0.50%
1.06%(i) 1.29%(i) - $157,990 63%
1999 - (2.26) $15.93 5.76%
0.97% 1.02% 0.05% $205,198 69%
Value Fund - Investment
Shares

1995(d) - (0.34) $12.04 24.14%
0.69%(i) 3.93%(i) 0.55%(i) $ 45,424 76%
1996 - (0.64) $13.89 21.72%
1.11% 2.29% 0.06% $ 83,572 58%
1997 - (0.87) $16.18 24.08%
1.04% 1.50% - $152,531 31%
1998 - (0.63) $17.27 11.00%
1.11% 1.24% - $ 47,815 63%
1999 - (2.22) $15.92 5.51%
1.22% 0.77% 0.05% $ 77,325 69%
Growth Fund - Trust
Shares

1992(b) - (0.11) $10.66 9.28%
0.76%(i) 2.28%(i) 0.35%(i) $102,822 30%
1993 - (0.30) $10.51 1.43%
0.84% 1.85% 0.30% $154,185 74%
1994 - (0.30) $10.36 1.42%
0.79% 2.32% 0.30% $143,876 66%
1995(c) - (0.41) $10.05 1.00%
0.83%(i) 2.76%(i) 0.30%(i) - -
1998(a) - (0.02) $20.08 12.85%
1.00%(i) 0.22%(i) - $246,613 41%
1999 - (1.74) $23.55 27.42%
0.94% 0.05% 0.05% $376,940 20%
Growth Fund - Investment Share

1995 - (0.54) $12.10 23.01%
1.03% 1.61% 0.05% $154,297 110%
1996 - (0.70) $14.64 28.22%
1.05% 0.98% 0.01% $175,521 56%
1997 - (0.83) $16.89 22.37%
1.01% 0.45% - $275,006 40%
1998 - (1.83) $20.08 33.81%
1.08% 0.12% - $140,922 41%
1999 - (1.73) $23.49 27.07%
1.19% (0.20%) 0.05% $320,921 20%
Aggressive Growth
Fund

1999(e) - (0.62) $12.58 33.17%
1.19%(i) (0.11%)(i) - $ 95,992 64%
</TABLE>

Effective June 30, 2000, Trust Shares will become Class A Shares and Investment
Shares will become Class B Shares.

(a) Reflects operations for the period from May 20, 1998 (date of initial public
investment) to November 30, 1998. (b) Reflects operations for the period from
April 20, 1992 (date of initial public investment) to November 30, 1992.

(c) Reflects operations for the two month period ended January 31, 1995. Prior
to February 1, 1995, the Fund offered two classes of shares: Investment Shares
and Trust Shares. On February 1, 1995, the Fund exchanged all outstanding Trust
Shares for Investment Shares and no longer offered Trust Shares. The Fund
resumed offering Trust Shares as of May 20, 1998.

(d) Reflects operations for the period from December 19, 1994 (date of initial
public investment) to November 30, 1995. (e) Reflects operations for the period
from March 15, 1999 (date of initial public investment) to November 30, 1999.

(f) Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These distributions
did not represent a return of capital for federal income tax purposes.

(g) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

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

(i) Computed on an annualized basis.

Regions Funds

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

A Statement of Additional Information (SAI) dated January 31, 2000 (Revised June
30, 2000) is incorporated by reference into this prospectus. Additional
information about the Fund's investments is available in the Funds' annual
report to shareholders. The annual report discusses market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, the annual report and other information
without charge write to or call Regions Funds at 1-800-433-2829.

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

Regions Funds
417 North 20th Street
12th Floor

P.O. Box 10247 (Zip code: 35202)
Birmingham, Alabama 35203
1-800-433-2829

Federated Securities Corp.
Distributor

007576(6/00)

SEC File No. 811-6511

<S>

<C> <C>
Regions Aggressive Growth Fund Class A Shares
Regions Aggressive Growth Fund Class B Shares

RAGRX 75913Q845 Regions Balanced Fund Class A Shares FPALX 75913Q209 Regions
Balanced Fund Class B Shares FPBLX 75913Q100 Regions Fixed Income Fund Class A
Shares RFIFX 75913Q803 Regions Fixed Income Fund Class B Shares FPFTX 75913Q704
Regions Growth Fund Class A Shares RGRAX 75913Q407 Regions Growth Fund Class B
Shares FPETX 75913Q308

Regions Limited Maturity Gov't Fund Class A Shares

RLMGX 75913Q852
Regions Limited Maturity Gov't Fund Class B Shares

FPLGX 75913Q860
Regions Treasury Money Market Fund Class A Shares

FITXX 75913Q878
Regions Treasury Money Market Fund Class B Shares

FPIXX 75913Q886
Regions Value Fund Class A Shares

RVLAX 75913Q605
Regions Value Fund Class B Shares
FPEIX 75913Q506
</TABLE>

Federated Securities Corp., Distributor

007576 (6/00)

[Graphic Representation Omitted]
TRU160

REGIONS FUNDS

CLASS A SHARES

CLASS B SHARES

STATEMENT OF ADDITIONAL INFORMATION

January 31, 2000

(Revised June 30, 2000)

O REGIONS TREASURY MONEY MARKET FUND OREGIONS BALANCED FUND
O REGIONS LIMITED MATURITY GOVERNMENT FUND OREGIONS VALUE FUND
O REGIONS FIXED INCOME FUND OREGIONS GROWTH FUND

O REGIONS AGGRESSIVE GROWTH FUND

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for the Regions Funds, dated
January 31, 2000 (Revised June 30, 2000). This SAI incorporates by reference
the Funds' Annual Report. Obtain the prospectus or Annual Report, without
charge by calling the Trust at 1-800-433-2829.

5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7010

CUSIP

75913Q886 75913Q878
75913Q860 75913Q852
75913Q704 75913Q803
75913Q100 75913Q209
75913Q506 75913Q605
75913Q308 75913Q407
75913Q845

007580 (6/00)

FEDERATED SECURITIES CORP.
Distributor

A subsidiary of FEDERATED INVESTORS, INC.

TABLE OF CONTENTS

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

HOW ARE THE FUNDS ORGANIZED 1

SECURITIES IN WHICH THE FUNDS INVEST 1

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS 2

INVESTMENT LIMITATIONS 10

DETERMINING MARKET VALUE OF SECURITIES 12

WHAT DO SHARES COST? 13

HOW IS THE FUND SOLD? 14

HOW TO BUY SHARES 15

MASSACHUSETTS PARTNERSHIP LAW 16

ACCOUNT AND SHARE INFORMATION 15

WHAT ARE THE TAX CONSEQUENCES 15

WHO MANAGES THE FUNDS 15

HOW DOES THE FUND MEASURE PERFORMANCE 23

PERFORMANCE COMPARISONS 24

ECONOMIC AND MARKET INFORMATION 28

FINANCIAL STATEMENTS 28

APPENDIX 29

ADDRESSES 31

HOW ARE THE FUNDS ORGANIZED

The Regions Funds (Trust) was established as a Massachusetts business trust
under a Declaration of Trust dated October 15, 1991. Effective May 15, 1998, the
Trust changed its name from "First Priority Funds" to "Regions Funds." As of the
date of this Statement, the Trust consists of seven separate portfolios of
securities (Funds) which are as follows: Regions Treasury Money Market Fund
(Treasury Money Market Fund); Regions Limited Maturity Government Fund (Limited
Maturity Government Fund); Regions Fixed Income Fund (Fixed Income Fund);
Regions Balanced Fund (Balanced Fund); Regions Value Fund, (Value Fund); Regions
Growth Fund, (Growth Fund); and Regions Aggressive Growth Fund (Aggressive
Growth Fund). Shares of the Funds are offered in two classes of shares, Class A
Shares and Class B Shares (individually and collectively referred to as "Shares"
as the context may require). This SAI relates to both classes of the
above-mentioned Shares of the Funds.

SECURITIES IN WHICH THE FUNDS INVEST

Following is a table that indicates which types of securities are a: o P =
PRINCIPAL investment of a Fund; (shaded in chart) o A = ACCEPTABLE (but not
principal) investment of a Fund; or o N = NOT AN ACCEPTABLE investment of a
Fund.

- -------------------------------------------------------------------------------------------
SECURITIES TREASURY LIMITED FIXED BALANCED VALUE GROWTH AGGRESSIVE
MONEY MATURITY INCOME FUND FUND FUND GROWTH
MARKET GOVERNMENTFUND FUND
FUND FUND

- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
AMERICAN DEPOSITARY RECEIPTS N N N A A A A
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES N A A A N N N
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
BANK INSTRUMENTS N A A A A A A
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
BORROWING A A A A A A A
- -------------------------------------------------------------------------------------------
COMMERCIAL PAPER N A A A A A A
- ---------------------------------------------------- ------------------------
- -------------------------------------------------------------------------------------------
COMMON STOCK1 N N N P P P P
- ---------------------------------------------------- -----------------
- -------------------------------------------------------------------------------------------
CONVERTIBLE SECURITIES2 N N N A A A A
- -------------------------------------------------------------------------------------------
- ----------------------------------------------------------- ------------------------
DERIVATIVE CONTRACTS AND N A A A A A A
SECURITIES

- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
ILLIQUID SECURITIES4 A A A A A A A
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
LENDING OF PORTFOLIO SECURITIES A A A A A A A
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES N A A A N N N
- -------------------------------- -------------------------------------------------
- -------------------------------------------------------------------------------------------
MUNICIPAL DEBT OBLIGATIONS N A A A N N N
- -------------------------------- -------------------------------------------------
- -------------------------------------------------------------------------------------------
OTHER MONEY MARKET INSTRUMENTS N A A A A A A
- -------------------------------- ----------------- -----------------
- -------------------------------------------------------------------------------------------
PREFERRED STOCKS N N N A A A A
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS N A A A A A A
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
SECURITIES OF OTHER INVESTMENT A A A A A A A
COMPANIES

- ---------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
SECURITIES TREASURY LIMITED FIXED BALANCEDVALUE GROWTH AGGRESSIVE
MONEY MATURITY INCOME FUND FUND FUND GROWTH
MARKET GOVERNMENTFUND FUND
FUND FUND

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

1. The VALUE FUND will invest in common stocks of companies with market
capitalizations of $1 billion or more, the GROWTH FUND will invest in common
stocks of companies with market capitalizations of $5 billion or more and the
AGGRESSIVE GROWTH FUND will invest will invest in common stocks of companies
with market capitalizations of $5 billion or less.

2. The BALANCED FUND and VALUE FUND may invest up to 25% of their respective
total assets in below investment grade convertible securities (rated BB and
below by a nationally recognized statistical rating organization (NRSRO)). An
NRSRO is Moody's, S&P and Fitch

3. The Corporate Debt Obligations that the Funds invest will be rated in one of
the three highest rating categories by an NRSRO.

4. ALL FUNDS, except the TREASURY MONEY MARKET FUND, may invest up to 15% of
their respective assets in illiquid securities. The TREASURY MONEY MARKET
FUND may invest up to 10% of its assets in illiquid securities.

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS

EQUITY SECURITIES

Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The Fund 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 Fund may invest.

COMMON STOCKS

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. The Fund [may also/will] treat such redeemable preferred stock as a
fixed income security. INTERESTS IN OTHER LIMITED LIABILITY COMPANIES
Entities such as limited partnerships, limited liability companies, business
trusts and companies organized outside the United States may issue securities
comparable to common or preferred stock.

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 the 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). The 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

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 types of fixed income securities in
which the 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 Fund treats mortgage backed securities guaranteed
by GSEs as agency securities. Although a GSE guarantee protects against
credit risks, it does not reduce the interest rate 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. The 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 Fund treats 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 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.

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 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 interest rate 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

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.

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.

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.

FOREIGN SECURITIES

Foreign securities are securities of issuers based outside the United States.
The 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.

Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject currency risks and risks of foreign investing. Trading in
certain foreign markets is also subject to liquidity risks.

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 not 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.

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, the 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 the Fund from closing out a position. If this happens, the
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 the Fund by preventing it from disposing of
or trading any assets it has been using to secure its obligations under the
contract.

The 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 the 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 the Fund's exposure to interest
rate and currency risks, and may also expose the Fund to liquidity and leverage
risks. OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.

The 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 Fund may:
Buy call options on securities, securities indices and futures contracts in
anticipation of an increase in the value of the underlying asset. Buy put
options on securities, securities indices and futures contracts in
anticipation of a decrease in the value of the underlying asset. Write call
options on securities, securities indices and futures contracts 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 the 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. Write put options on securities, securities indices and futures
contracts (to generate income from premiums, and in anticipation of an
increase or only limited decrease in the value of the underlying asset). In
writing puts, there is a risk that the Fund may be required to take delivery
of the underlying asset when its current market price is lower than the
exercise price.

When the Fund writes options on futures contracts, it will be subject to
margin requirements similar to those applied to futures contracts. Buy or
write options to close out existing options positions.

TEMPORARY DEFENSIVE INVESTMENTS

For temporary defensive purposes and to maintain liquidity, the Funds may invest
in cash and cash items, including short-term money market instruments;
securities issued and/or guaranteed as to payment of principal and interest by
the U.S. government, its agencies or instrumentalities; and repurchase
agreements.

SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which the 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. The Fund will enter into repurchase
agreements only with banks and other recognized financial institutions, such
as securities dealers, deemed creditworthy by the Adviser.

The 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.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which the 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 the Fund. Reverse
repurchase agreements are subject to credit risks. In addition, reverse
repurchase agreements create leverage risks because the 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 When
issued transactions are arrangements in which the 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 the Fund. The 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,
when issued transactions create market risks for the Fund. When issued
transactions also involve credit risks in the event of a counterparty
default. Some Funds may have leverage risks.

TO BE ANNOUNCED SECURITIES (TBAS)

As with other when issued transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the
particular securities to be delivered. Instead, the Fund agrees to accept
any security that meets specified terms. For example, in a TBA mortgage
backed transaction, the Fund and the seller would agree upon the issuer,
interest rate and terms of the underlying mortgages. However, the seller
would not identify the specific underlying mortgages until it issues the
security. TBA mortgage backed securities increase market risks because the
underlying mortgages may be less favorable than anticipated by the Fund.

SECURITIES LENDING

The 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. The 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 it 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.
Some Funds may have leverage risks.

ASSET COVERAGE

In order to secure its obligations in connection with derivatives contracts or
special transactions, the 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 the Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations entering into an offsetting derivative contract or terminating
a special transaction. This may cause the Fund to miss favorable trading
opportunities or to realize losses on derivative contracts or special
transactions.

STOCK MARKET RISKS

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

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

LIQUIDITY RISKS

o 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, 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 or close out a derivative contract 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.

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

RISKS RELATED TO INVESTING FOR GROWTH

o 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

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.

CREDIT RISKS

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

BOND MARKET RISKS

o Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

O 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.

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, the
Fund will lose money.

o Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. 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, the 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.

CALL RISKS

o 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.

o 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.

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. As a result, 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. This relationship between interest rates and mortgage
prepayments makes the price of mortgage backed securities more volatile than
most other types of fixed income securities with comparable credit risks.

o Fixed income securities generally compensate for greater prepayment 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.

RISKS ASSOCIATED WITH COMPLICATED CMOS

o CMOs with complicated terms, such as companion classes, IOs, POs, Inverse
Floaters and residuals, generally entail greater market, prepayment and
liquidity risks than other mortgage backed securities. For example, their
prices are more volatile and their trading market may be more limited.

INVESTMENT LIMITATIONS

FUNDAMENTAL LIMITATIONS

The following investment limitations are fundamental and cannot be changed
without shareholder approval.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

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

LENDING CASH OR SECURITIES

The Funds may not make loans, provided that this restriction does not prevent
the Funds from purchasing debt obligations, entering into repurchase agreements,
lending their 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. As a
non-fundamental policy, for purposes of this restriction, investments in
transactions involving futures contracts and options, forward currency
contracts, swap transactions and other financial contracts that settle by
payment of cash are not deemed to be investments in commodities.

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 OF INVESTMENTS

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 OF INVESTMENTS

The Funds will not make investments that will result in the concentration of
their investments in the securities of issuers primarily engaged in the same
industry. Government securities, municipal securities and bank instruments will
not be deemed to constitute an industry. To conform to the current view of the
SEC staff that only domestic bank instruments may be excluded from industry
concentration limitations, as a matter of non-fundamental policy, the Funds will
not exclude foreign bank instruments from industry concentration tests so long
as the policy of the SEC remains in effect. As a non-fundamental operating
policy, the Funds will consider concentration to be the investment of more than
25% of the value of their total assets in any one 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 underwriters under the Securities Act of 1933.

NON-FUNDAMENTAL LIMITATIONS

The following investment limitations are non-fundamental and, therefore, may be
changed by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these limitations becomes effective.

BUYING ON MARGIN

The TREASURY MONEY MARKET FUND and the LIMITED MATURITY GOVERNMENT FUND will not
purchase securities on margin, provided that these Funds may obtain short-term
credits necessary for the clearance of purchases and sales of securities. The
FIXED INCOME FUND, BALANCED FUND, VALUE FUND and GROWTH FUND will not purchase
securities on margin, provided that these Funds may obtain short-term credits
necessary for the clearance of purchases and sales of securities, and further
provided that these 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. 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.

INVESTING IN ILLIQUID SECURITIES

The TREASURY MONEY MARKET FUND will not purchase securities for which there is
no readily available market, or enter in to 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, 10% of the
Fund's net assets.

The LIMITED MATURITY GOVERNMENT FUND, FIXED INCOME FUND, BALANCED FUND, VALUE
FUND, GROWTH FUND and AGGRESSIVE GROWTH FUND will not purchase securities for
which there is no readily available market, or enter in to 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 Funds' net assets.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Funds may invest their assets in securities of other investment companies.

REVERSE REPURCHASE AGREEMENTS

The Funds may engage in reverse repurchase agreements. Reverse repurchase
agreements are repurchase agreements in which the 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 the Fund. Reverse repurchase agreements are subject to credit
risks. In addition, reverse repurchase agreements create leverage risks because
the Fund must repurchase the underlying security at a higher price, regardless
of the market value of the security at the time of repurchase.

CONCENTRATION OF INVESTMENTS

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

ARBITRAGE TRANSACTIONS

The Funds will not enter into transactions for the purpose of engaging in
arbitrage. Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction. For purposes of their policies and limitations, the Funds
consider instruments (such as certificates of deposit and demand and time
deposits) issued by a U.S. branch of a domestic bank or savings and loan having
capital, surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be cash items.

REGULATORY COMPLIANCE. The TREASURY MONEY MARKET FUND may follow non-fundamental
operational policies that are more restrictive than its fundamental investment
limitations, as set forth in the prospectus and this statement of additional
information, in order to comply with applicable laws and regulations. In
particular, the TREASURY MONEY MARKET FUND will comply with the various
requirements of Rule 2a-7 under the Act, which regulates money market mutual
funds. For example, Rule 2a-7 generally prohibits the investment of more than 5%
of the TREASURY MONEY MARKET FUND'S total assets in the securities of any one
issuer, although the TREASURY MONEY MARKET FUND'S fundamental investment
limitation only requires such 5% diversification with respect to 75% of its
assets. The TREASURY MONEY MARKET FUND will also determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The TREASURY MONEY MARKET FUND may change these operational policies to
reflect changes in the laws and regulations without shareholder approval.
PORTFOLIO TURNOVER. For the fiscal years ended November 30, 1999 and 1998, the
portfolio turnover rates were 22% and 69%, respectively, for LIMITED MATURITY
GOVERNMENT FUND; 18% and 64%, respectively, for the FIXED INCOME FUND; 20% and
41%, respectively, for the GROWTH FUND; 69% and 63%, respectively, for the VALUE
FUND; and 23% and 31%, respectively, for the BALANCED FUND. For the period ended
November 30, 1999, the portfolio turnover rate was 64% for the AGGRESSIVE GROWTH
FUND.

DETERMINING MARKET VALUE OF SECURITIES

USE OF THE AMORTIZED COST METHOD (TREASURY MONEY MARKET FUND ONLY)

The Trustees have decided that the best method for determining the value of
portfolio instruments for the TREASURY MONEY MARKET FUND 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.

The TREASURY MONEY MARKET FUND's use of the amortized cost method of valuing
portfolio instruments depends on its compliance with the provisions of Rule 2a-7
(the Rule) promulgated by the Securities and Exchange Commission under the Act.
Under the Rule, the Trustees must establish procedures reasonably designed to
stabilize the net asset value per share, as computed for purposes of
distribution and redemption, at $1.00 per share, taking into account current
market conditions and the Fund's investment objective.

Under the Rule, the TREASURY MONEY MARKET FUND is permitted to purchase
instruments which are subject to demand features or standby commitments. As
defined by the Rule, a demand feature entitles the Fund to receive the principal
amount of the instrument from the issuer or a third party on (1) no more than 30
days' notice or (2) at specified intervals not exceeding 397 days on no more
than 30 days' notice. A standby commitment entitles the Fund to achieve same-day
settlement and to receive an exercise price equal to the amortized cost of the
underlying instrument plus accrued interest at the time of exercise.

The TREASURY MONEY MARKET FUND acquires instruments subject to demand features
and standby commitments to enhance the instrument's liquidity. The Fund treats
demand features and standby commitments as part of the underlying instruments,
because the Fund does not acquire them for speculative purposes and cannot
transfer them separately from the underlying instruments. Therefore, although
the Fund defines demand features and standby commitments as puts, the Fund does
not consider them to be corporate investments for purposes of its investment
policies.

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

INVESTMENT RESTRICTIONS. The Rule requires that the TREASURY MONEY MARKET FUND
limit its investments to instruments that, in the opinion of the Trustees,
present minimal credit risks and have received the requisite rating from one or
more NRSROs. If the instruments are not rated, the Trustees must determine that
they are of comparable quality. The Rule also requires the Fund to maintain a
dollar-weighted average portfolio maturity (not more than 90 days) appropriate
to the objective of maintaining a stable net asset value of $1.00 per share. In
addition, no instrument with a remaining maturity of more than 397 days can be
purchased by the Fund.

Should the disposition of a portfolio security result in a dollar-weighted
average portfolio maturity of more than 90 days, the TREASURY MONEY MARKET FUND
will invest its available cash to reduce the average maturity to 90 days or less
as soon as possible. Shares of investment companies purchased by the Fund will
meet these same criteria and will have investment policies consistent with Rule
2a-7.

Under the amortized cost method of valuation, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates, the
indicated daily yield on shares of the TREASURY MONEY MARKET FUND, computed
based upon amortized cost valuation, may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the indicated daily yield on
shares of the Fund computed the same way may tend to be lower than a similar
computation made by using a method of calculation based upon market prices and
estimates.

MARKET VALUES (ALL OTHER FUNDS)

Market values of portfolio securities are determined as follows:

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

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

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

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

o 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.

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

WHAT DO SHARES COST?

The TREASURY MONEY MARKET FUND attempts to stabilize the net asset value (NAV)
of Shares at $1.00 by valuing its portfolio securities using the amortized cost
method. Shares of the other Funds are sold at their NAV and redeemed at NAV less
any applicable Contingent Deferred Sales Charge (CDSC) (applies to Class B
Shares only) on days on which the New York Stock Exchange is open for business.
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

These reductions or eliminations are offered because: no sales commissions have
been advanced to the investment professional selling Share; the shareholder has
already paid a CDSC; or nominal sales efforts are associated with the original
purchase of Shares.

Upon notification to the Distributor or the Funds' transfer agent, no CDSC will
be imposed on redemptions:

o if you are an officer, director, employee or retired employee of Regions
Bank, or its affiliates, and your spouse and dependent children;

o if you are a trust customer redeeming through the Trust departments of
Regions Bank, or its affiliates. The Trust departments may charge fees for
services provided;

o on the portion of redemption proceeds attributable to increases in the
value of your account due to increases in the NAV;

o on shares acquired through reinvestment of dividends and capital gains;

o on shares held more than 3 years after the end of the calendar month of
acquisition;

o upon the death or disability of the last surviving shareholder(s) of the
account;

o if your redemption is a required distribution and you are over the age of
70-1/2 from an individual retirement account or other retirement plan;

o on shares purchased prior to June 1, 1997; or
o when the Fund redeems your Shares and closes your account for failing to meet
the minimum balance requirement.

HOW IS THE FUND SOLD?

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

RULE 12B-1 PLAN (CLASS B SHARES ONLY)

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

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

SHAREHOLDER SERVICES (CLASS B SHARES ONLY)

The Funds may pay Federated Shareholder Services, a subsidiary of Federated
Investors, Inc., for providing shareholder services and maintaining shareholder
accounts. Federated Shareholder Services may select others, including Regions
Bank and RICI, 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 (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services may be reimbursed by the
Adviser or its affiliates.

Investment professional 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 Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.

HOW TO BUY SHARES

EXCHANGING SECURITIES FOR FUND SHARES

You may contact the Distributor to request a purchase of Shares in an exchange
for securities you own. The Fund reserves the right to determine whether to
accept your securities and the minimum market value to accept. The Fund will
value your securities in the same manner as it values its assets. This exchange
is treated as a sale of your securities for federal tax purposes.

EXCHANGE PRIVILEGE

Before the exchange, the shareholder must receive a copy of the Prospectus.
Please refer to the "How to Exchange Shares" section in the Prospectus.

REDEMPTION IN KIND

Although the Funds intend to pay share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Because the Trust has elected to be governed by Rule 18f-1 under the Investment
Company Act or 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 a Fund's 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' Trustees determine that payment should be in kind. In such a case, a Fund
will pay all or a portion of the remainder of the redemption in portfolio
securities, valued in the same way as the Fund determines its net asset value.
The portfolio securities will be selected in a manner that the Funds' Trustees
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 their portfolio securities
and selling them before their maturity could receive less than the redemption
value of their securities and could incur transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

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

In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required 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 cannot meet its obligations to indemnify shareholders and pay
judgments against them.

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

Each Share of a Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All classes of each Fund in a
Trust have equal voting rights, except that in matters affecting only a
particular Fund or class, only Shares of that Fund or class are entitled to
vote. Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of shareholders will be called by the Trustees upon
the written request of shareholders who own at least 10% of each Trust's
outstanding shares of all series entitled to vote.

As of January 4, 2000, the following list indicates the shareholders who owned
of record, beneficially or both 5% or more of the outstanding shares of the
following portfolios: HUBCO, c/o Regions Financial Corp., Birmingham, AL owned
approximately 7,426,191 Shares (91.91%) of the AGGRESSIVE GROWTH FUND;
approximately 509,704,470 Trust Shares (99.14%) and 30,594,551 Investment Shares
(26.62%) of the TREASURY MONEY MARKET FUND; approximately 6,749,821 Trust Shares
(99.89%) and 4,054,692 Investment Shares (8.43%) of LIMITED MATURITY GOVERNMENT
FUND; approximately 21,242,619 Trust Shares (100%) and 3,484,255 Investment
Shares (73.67%) of FIXED INCOME FUND; approximately 981,963 Trust Shares (100%)
and 6,542,231 Investment Shares (59.40%) of the BALANCED FUND; approximately
13,031,5596 Trust Shares (100%) and 3,608,833 Investment Shares (72.03%) of
VALUE FUND; and approximately 16,066,715 Trust Shares (100%) and 7,834,832
Investment Shares (55.79%) of GROWTH FUND. (Effective June 30, 2000, Trust
Shares were renamed Class A Shares and Investment Shares were renamed Class B
Shares.)

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

WHAT ARE THE TAX CONSEQUENCES?

FEDERAL INCOME TAX

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

Each Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by each Fund. Each
Fund is entitled to a loss carry-forward, which may reduce the taxable income or
gain that each Fund would realize, and to which the shareholder would be
subject, in the future.

The dividends received deduction for corporations will apply to ordinary income
distributions to the extent the distribution represents amounts that would
qualify for the dividends received deduction to the Funds if the Funds were a
regular corporation, and to the extent designated by the Funds as so qualifying.
Otherwise, these dividends and any short-term capital gains are taxable as
ordinary income. No portion of any income dividends paid by the other Funds is
eligible for the dividends received deduction available to corporations. These
dividends, and any short-term capital gains, are taxable as ordinary income.

CAPITAL GAINS

Capital gains, when experienced by the Funds, could result in an increase in
dividends. Capital losses could result in a decrease in dividends. When a Fund
realizes net long-term capital gains, it will distribute them at least once
every 12 months.

WHO MANAGES THE FUNDS?

OFFICERS AND 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, birthdate, present position(s) held with the Trust,
principal occupations for the past five years, total compensation received as a
Trustee from the Trust for its most recent fiscal year. The Trust is comprised
of seven funds. As of January 4, 2000, the Funds' Board and Officers as a group
owned less than 1% of the Fund's outstanding Shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.

NAME AGGREGATE
BIRTHDATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS FROM
POSITION WITH TRUST FOR PAST 5 YEARS TRUST
JOHN F. DONAHUE*+# Chief Executive Officer and Director $0
Birthdate: July 28, or Trustee of the Federated Fund
1924 Complex; Chairman and Director,
Federated Investors Federated Investors, Inc.; Chairman
Tower and Trustee, Federated Investment
1001 Liberty Avenue Management Company; Chairman and
Pittsburgh, PA Director, Federated Investment
TRUSTEE AND CHAIRMAN Counseling and Federated Global
Investment Management Corp.;
Chairman, Passport Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of the Federated $2082.52
Birthdate: February Fund Complex; Director, Member of
3, 1934 Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director,
Pittsburgh, PA Robroy Industries, Inc. (coated steel
TRUSTEE conduits/computer storage equipment);
formerly: Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group,

Inc. (physician practice management);
Director, Member of Executive

Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the Federated $2291.08
Birthdate: June 23, Fund Complex; President, Investment
1937 Properties Corporation; Senior Vice
Wood/IPC Commercial President, John R. Wood and
Dept. Associates, Inc., Realtors; Partner
John R. Wood or Trustee in private real estate
Associates, Inc. ventures in Southwest Florida;
Realtors formerly: President, Naples Property
3255 Tamiami Trial Management, Inc. and Northgate
North Naples, FL Village Development Corporation.
TRUSTEE

NICHOLAS Director or Trustee of the Federated $2082.52
CONSTANTAKIS Fund Complex; Director, Michael Baker
Birthdate: Corporation (engineering,
September 3, 1939 construction, operations and
175 Woodshire Drive technical services); formerly:
Pittsburgh, PA Partner, Andersen Worldwide SC.
TRUSTEE

Director or Trustee of some of the $1135.94
JOHN F. CUNNINGHAM Federated Fund Complex; Chairman,
Birth Date: March President and Chief Executive
5, 1943 Officer, Cunningham & Co., Inc.
353 El Brillo Way (strategic business consulting);
Palm Beach, FL Trustee Associate, Boston College;
TRUSTEE Director, Iperia Corp.
(communications/software); formerly:
Director, Redgate Communications and EMC Corporation
(computer storage systems).

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

LAWRENCE D. ELLIS, Director or Trustee of the Federated $2082.52
M.D.* Fund Complex; Professor of Medicine,
Birthdate: October University of Pittsburgh; Medical
11, 1932 Director, University of Pittsburgh
3471 Fifth Avenue Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh
TRUSTEE Medical Center; Member, National

Board of Trustees, Leukemia Society
of America.

PETER E. MADDEN Director or Trustee of the Federated $1966.08
Birthdate: March Fund Complex; formerly:
16, 1942 Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court;
100 Royal Palm Way President, State Street Bank and
Palm Beach, FL Trust Company and State Street

TRUSTEE Corporation.

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. Director or Trustee of some of the $1249.69
MANSFIELD, JR. Federated Fund Complex; Executive
Birth Date: April Vice President, Legal and External
10, 1945 Affairs, Dugan Valva Contess, Inc.
80 South Road (marketing, communications,
Westhampton Beach, technology and consulting).; formerly
NY TRUSTEE Management Consultant.

Previous Positions: Chief Executive Officer, PBTC
International Bank; Partner, Arthur Young & Company (now
Ernst & Young LLP); Chief Financial Officer of Retail
Banking Sector, Chase Manhattan Bank; Senior Vice
President, Marine Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance, Frank G. Zarb
School of Business, Hofstra University.

JOHN E. MURRAY, Director or Trustee of the Federated $2291.08
JR., J.D., S.J.D.# Fund Complex; President, Law
Birthdate: December Professor, Duquesne University;
20, 1932 Consulting Partner, Mollica & Murray;
President, Duquesne Director, Michael Baker Corp.
University (engineering, construction,
Pittsburgh, PA operations and technical services).
TRUSTEE

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

MARJORIE P. SMUTS Director or Trustee of the Federated $2082.52
Birthdate: June 21, Fund Complex; Public
1935 Relations/Marketing/Conference
4905 Bayard Street Planning.

Pittsburgh, PA

TRUSTEE Previous Positions: National
Spokesperson, Aluminum Company of
America; television producer;
business owner.
JOHN S. WALSH Director or Trustee of some of the $2082.52
Birthdate: November Federated Fund Complex; President and
28, 1957 Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction
Valparaiso, IN temporary heaters); President and
TRUSTEE Director, Manufacturers Products,
Inc. (distributor of portable
construction heaters); President,
Portable Heater Parts, a division of
Manufacturers Products, Inc.;
Director, Walsh & Kelly, Inc. (heavy
highway contractor); formerly: Vice
President, Walsh & Kelly, Inc.

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

Services Company; Director, Federated
Services Company.

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

EDWARD C. GONZALES Trustee or Director of some of the $0
Birthdate: October Funds in the Federated Fund Complex;
22, 1930 President, Executive Vice President
Federated Investors and Treasurer of some of the Funds in
Tower the Federated Fund Complex; Vice
1001 Liberty Avenue Chairman, Federated Investors, Inc.;
Pittsburgh, PA Vice President, Federated Investment
President and Management Company and Federated
treasurer Investment Counseling, Federated
Global Investment Management Corp.
and Passport Research, Ltd.;
Executive Vice President and
Director, Federated Securities Corp.;
Trustee, Federated Shareholder
Services Company.

RICHARD B. FISHER President or Vice President of some $0
Birthdate: May 17, of the Funds in the Federated Fund
1923 Complex; Director or Trustee of some
Federated Investors of the Funds in the Federated Fund
Tower Complex; Executive Vice President,
1001 Liberty Avenue Federated Investors, Inc.; Chairman
Pittsburgh, PA and Director, Federated Securities
VICE PRESIDENT Corp.

CHARLES L. DAVIS, Vice President and Assistant $0
Jr. Treasurer of some of the Funds.
Birthdate: March
23, 1960 Federated Investors Tower 1001 Liberty Avenue Pittsburgh, PA VICE
PRESIDENT AND ASSISTANT TREASURER

+ Mr. Donahue is the father of J. Christopher Donahue, Executive Vice President
of the Trust.

ADVISER TO THE FUNDS

The Funds' investment adviser is the Capital Management Group, a unit of the
Trust Division of Regions Bank (Adviser), which is a wholly-owned subsidiary of
Regions Financial Corp. Because of internal controls maintained by Regions Bank
to restrict the flow of non-public information, Fund investments are typically
made without any knowledge of Regions Bank or its affiliates' lending
relationships with an issuer.

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

BANKING LAWS

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

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

BROKERAGE TRANSACTIONS

The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to a Fund or the Adviser, and
may include: advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of quotations
for portfolio evaluations; and similar services.

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

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

For the fiscal year ended November 30, 1999, the Funds' Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $934,811,377 for which the
Funds paid $1,412,522 in brokerage commissions.

ADMINISTRATOR

Federated Administrative Services, a subsidiary of Federated Investors, Inc.,
provides administrative personnel and services to the Funds for a fee at an
annual rate as specified below:

MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE TRUST

.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million

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

The functions performed by FAS, as administrator include, but are not limited to
the following:

o preparation, filing and maintenance of the Trust's governing documents,
minutes of Trustees' meetings and shareholder meetings;

o preparation and filing with the SEC and state regulatory authorities the
Trust's registration statement and all amendments, and any other documents
required for the Funds to make a continuous offering of their shares;

o prepare, negotiate and administer contracts on behalf of the Fund;

o supervision of the preparation of financial reports;

o preparation and filing of federal and state tax returns;

o assistance with the design, development and operation of a Fund; and

o providing advice to the Funds and Trustees.

TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO ACCOUNTING SERVICES

Federated Services Company, Pittsburgh, Pennsylvania, through its registered
transfer agent, Federated Shareholder Services Company, maintains all necessary
shareholder records. For its services, the transfer agent receives a fee based
on the size, type and number of accounts and transactions made by shareholders.
The fee is based on the level of the Funds' average net assets for the period
plus out-of-pocket expenses.

CUSTODIAN

Regions Bank, Birmingham, Alabama, is custodian for the securities and cash of
the Funds. Under the custodian agreement, Regions Bank holds the each Fund's
portfolio securities and keeps all necessary records and documents relating to
its duties. Regions Bank's fees for custody services are based upon the market
value of Fund securities held in custody plus certain securities transaction
charges.

INDEPENDENT AUDITORS

Deloitte & Touche LLP, Pittsburgh, Pennsylvania, is the independent auditor for
the Funds.

<TABLE>

FEES PAID BY THE FUNDS FOR SERVICES
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

- -------------------------------------------------------------------------------------------
FUND ADVISORY FEE PAID/ BROKERAGE COMMISSIONS ADMINISTRATIVE FEE
ADVISORY FEE WAIVED PAID PAID

-----------------------------------------------
--------------------------------------------------------------------------
FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR FOR THE FISCAL
YEAR NOVEMBER 30, 1999 ENDED NOVEMBER 30, 1999 ENDED
NOVEMBER 30,

1999

--------------------------------------------------------------------------
-----------------------------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ----------------- --------
--------------------------- ---------------------------------------
TREASURY MONEY $3,017,94$1,530,43$923,323 N/A N/A N/A $568,72$322,494$218,861
MARKET FUND $1,508,97$765,219 $461,662

- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
LIMITED $729,204 $613,188 $554,567 N/A N/A N/A $97,987$93,041 $94,304
MATURITY $193,164 $0 $0
GOVERNMENT FUND

- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
FIXED INCOME $1,911,79$1,631,73$1,272,86N/A N/A N/A $239,79$230,969$201,589
FUND $590,903 $0 $0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
BALANCED FUND $1,248,06$813,891 $576,963 $53,790 $30,423 $45,727 $146,62$107,768$85,552
$72,753 $0 $0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
VALUE FUND $2,028,18$1,464,46$875,092 $639,095$394,549$178,390$238,28$194,105$129,340
$118,069 $0 $0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
GROWTH FUND $4,391,12$2,552,57$1,925,57$425,140$337,246$382,723$515,44$338,064$285,419
$257,614 $0 $0
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
AGGRESSIVE $357,738 N/A N/A $109,228N/A N/A $44,514N/A N/A
GROWTH FUND* $0
- -------------------------------------------------------------------------------------------
*Reflects operations for the period from March 15, 1999 (date of the initial
public investment) to November 30, 1999. N/A - Not Applicable.
</TABLE>

------------------------------------
FOR THE FISCAL YEAR ENDED NOVEMBER

30, 1999

- ----------------------------------------------------------------
- ----------------------------------------------------------------
FUND 12B-1 FEE SHAREHOLDER SERVICES FEE

- ----------------------------------------------------------------
- ----------------------------------------------------------------
INVESTMENT TRUST SHARES INVESTMENT

SHARES SHARES

- ----------------------------------------------------------------
- ----------------------------------------------------------------
TREASURY MONEY MARKET FUND $289,359 N/A N/A
- ----------------------------------------------------------------
- ----------------------------------------------------------------
LIMITED MATURITY N/A N/A $102,346
GOVERNMENT FUND

- ----------------------------------------------------------------
- ----------------------------------------------------------------
FIXED INCOME FUND N/A N/A $104,903
- ----------------------------------------------------------------
- ----------------------------------------------------------------
BALANCED FUND N/A N/A $358,276
- ----------------------------------------------------------------
- ----------------------------------------------------------------
VALUE FUND N/A N/A $163,865
- ----------------------------------------------------------------
- ----------------------------------------------------------------
GROWTH FUND N/A N/A $598,370
- ----------------------------------------------------------------
- ----------------------------------------------------------------
AGGRESSIVE GROWTH FUND* N/A N/A N/A
- ----------------------------------------------------------------

(Effective June 30, 2000, Trust Shares were renamed Class A Shares and
Investment Shares were renamed Class B Shares.)

*Reflects operations for the period from March 15, 1999 (date of the initial
public investment) to November 30, 1999. N/A - Not Applicable.

HOW DO THE FUNDS MEASURE PERFORMANCE?

The Funds may advertise each Fund's 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.

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

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

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 a Fund 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 net asset value per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, less any contingent deferred sales charge,
adjusted over the period by any additional shares, assuming the quarterly
reinvestment of any dividends and distributions.

YIELD

The TREASURY MONEY MARKET FUND calculates the yield for both classes of shares
daily, based upon the seven days ending on the day of the calculation, called
the base period. This yield is computed by:

o 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;

o 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

o multiplying the base period return by 365/7.

The yield for the other Funds shares is calculated by dividing: (i)the net
investment income per share earned by a Fund's shares over a thirty-day period;
by (ii) the maximum offering price per share of the Fund on the last day of the
period. This number is then annualized using semi-annual compounding. This means
that the amount of income generated during the thirty-day period is assumed to
be generated each month over a 12-month period and is reinvested every six
months. To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment in a
Fund's shares, the Fund's shares performance is lower for shareholders paying
those fees.

EFFECTIVE YIELD (TREASURY MONEY MARKET FUND ONLY)

The TREASURY MONEY MARKET FUND's effective yield for both classes of shares is
computed by compounding the unannualized base period return by: adding 1 to the
base period return; raising the sum to the 365/7th power; and subtracting 1 from
the result. The TREASURY MONEY MARKET FUND's effective yield for Trust Shares
for the seven-day period ended November 30, 1999, was 4.65%. The TREASURY MONEY
MARKET FUND's effective yield for Investment Shares was 4.39% for the same
period. (Effective June 30, 2000, Trust Shares were renamed Class A Shares and
Investment Shares were renamed Class B Shares.)

- --------------------------------------------------------------------------------
FUND AVERAGE ANNUAL TOTAL RETURN YIELD
for the following periods for the 30-day period
ended November 30, 1999 ended November 30, 1999
-------------------------------------------------------------
-------------------------------------------------------------
TRUST SHARES INVESTMENT TRUST SHARES INVESTMENT

One Year SHARES SHARES
Five Year One Year
Start of Five Year

Performance Start of

Performance

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TREASURY MONEY 4.21% 3.94% 4.50% 4.25%
MARKET FUND 4.81% 4.42%
4.25%(a) 3.85%(a)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIMITED MATURITY 2.64% (0.55%) 5.40% 4.57%
GOVERNMENT FUND N/A 5.52%
4.08%(b) 4.64%(c)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIXED INCOME FUND 0.24% (2.87%) 6.09% 5.83%
N/A 6.81%
3.31%(b) 6.02%(d)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BALANCED FUND 10.14% 6.82% 2.84% 2.59%
N/A NA
11.22%(b) 15.62%(e)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VALUE FUND 5.76% 2.74% 0.92% 0.67%
N/A NA
4.06%(b) 17.22%(e)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH FUND 27.42% 24.07% 0.00% 0.00%
N/A 26.83%
26.71%(b) 18.58%(d)
- --------------------------------------------------------------------------------

(Effective June 30, 2000, Trust Shares were renamed Class A Shares and
Investment Shares were renamed Class B Shares.)

(a) April 14, 1992 (b) May 20, 1998 (c) December 12, 1993 (d) April 20, 1992 (e)
December 19, 1994

Start of Performance

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

(Effective June 30, 2000, the Aggressive Growth Fund offers two classes of
shares: Class A Shares and Class B Shares. The existing class of shares was
renamed Class B Shares.) (f) The start of performance date for the
Predecessor Collective Trust Fund was June 30, 1993.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or performance
comparisons of the Funds' 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.

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

The 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:

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, a Fund will quote its Lipper ranking in the appropriate category
in advertising and sales literature.

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.

TREASURY MONEY MARKET FUND:

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 LEHMAN BROTHERS TREASURY BOND INDEX comprised entirely of U.S. Treasury
obligations. Flower bonds and foreign issues are excluded.

o IBC/DONOHUE'S MONEY FUND REPORT publishes annualized yields of hundreds
of money market funds on a weekly basis and through its Money Market
Insight publication reports monthly reinvestment of dividends over a
specified period of time.

LIMITED MATURITY GOVERNMENT FUND:

o MERRILL LYNCH 1-3 YEAR TREASURY INDEX is an unmanaged index tracking
short-term U.S. government securities with maturities between 1 and 2.99
years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith,
Inc.

o MERRILL LYNCH CORPORATE AND GOVERNMENT INDEX includes issues which must
be in the form of publicly placed, nonconvertible, coupon-bearing
domestic debt with maturities between 1 and 4.99 years. 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 1-10 YEAR GOVERNMENT INDEX is an unmanaged index comprised
of U.S. government securities with maturities between 1 and 10 years.
Index returns are calculated as total returns for periods of one, six
and twelve months, as well as year-to-date. The index is produced by
Merrill Lynch, Pierce, Fenner & Smith, Inc.

o LEHMAN BROTHERS INTERMEDIATE GOVERNMENT INDEX is an unmanaged index
comprised of all publicly issued, non-convertible domestic debt of the
U.S. government. Only notes and bonds with minimum outstanding principal
of $1 million and minimum maturity of one year and maximum maturity of
ten years are included.

o MERRILL LYNCH 2-YEAR TREASURY CURVE INDEX is comprised of the most
recently issued 2-year U.S. Treasury notes. Index returns are calculated
as total returns for periods of one, three, six, and twelve months as
well as year-to-date.

i 2-YEAR TREASURY NOTE-Source: Wall Street Journal, Bloomberg Financial
Markets,
and Telerate.

Investors may use such a reporting service or indices in addition to the
Fund's prospectus to obtain a more complete view of the Fund's
performance before investing.

FIXED INCOME FUND:

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 maturity
of nine years. It calculates total return for one month, three month,
twelve month, and ten year periods, and year-to-date.

o MERRILL LYNCH GOVERNMENT/CORPORATE INDEX is comprised of approximately
4,800 issues which include publicly placed, nonconvertible
coupon-bearing domestic debt carrying a term to maturity of at least one
year, with par amounts outstanding at no less than $10 million at the
start and close of the performance measurement period, and which must be
rated by S&P or Moody's as investment grade issues (i.e., BBB/Baa or
better).

o MERRILL LYNCH 1-10 YEAR GOVERNMENT INDEX is an unmanaged index comprised
of U.S. Government securities with maturities between 1 and 10 years.
Index returns are calculated as total returns for periods of one, three,
six and twelve months as well as year-to-date. The index is produced by
Merrill Lynch, Pierce, Fenner & Smith, Inc.

o LEHMAN BROTHERS GOVERNMENT (LT) INDEX, for example, is an index composed
of bonds issued by the U.S. government or its agencies which have at
least $1 million outstanding in principal and which have maturities of
ten years or longer. Index figures are total return figures calculated
monthly.

BALANCED FUND:

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, can be used to compare to the
total returns of funds whose portfolios are invested primarily in common
stocks. In addition, the Standard & Poor's Index 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 Standard & Poor's figures.

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, nonconvertible domestic bonds of companies
in industry, public utilities, and finance. Tracked by Lehman Brothers,
the index has an average maturity of nine years. It calculates total
return for one-month, three-month, twelve-month, and ten-year periods,
and year-to-date.

o S&P 500/LEHMAN BROTHERS GOVERNMENT/CORPORATE (WEIGHTED INDEX) AND THE
S&P 500/LEHMAN GOVERNMENT (WEIGHTED INDEX) combine the components of a
stock-oriented index and a bond-oriented index to obtain results which
can be compared to the performance of a managed fund. The indices' total
returns will be assigned various weights depending upon the Fund's
current asset allocation.

VALUE FUND:

o S&P/BARRA VALUE INDEX is a sub-index of the S&P 500 composite index of
common stocks. The index represents approximately fifty percent of the
S&P 500 market capitalization and is comprised of those companies with
lower price-to-book ratios. The index is maintained by Standard & Poor's
in conjunction with Barra, an investment technology firm.

GROWTH FUND:

o DOW JONES INDUSTRIAL AVERAGE ("DJIA") is an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by the Dow Jones & Company, it is
cited as a principal indicator of market conditions.

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, compares total returns of funds
whose portfolios are invested primarily in common stocks. In addition,
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.

O S&P/BARRA GROWTH INDEX is a sub-index of the S&P 500 composite index of
common stocks. The index represents approximately fifty percent of the
S&P 500 market capitalization and is comprised of those companies with
higher price-to-book ratio (one distinction associated with "growth
stocks"). The index is maintained by Standard and Poor's in conjunction
with BARRA, an investment technology firm.

AGGRESSIVE GROWTH FUND:

o STANDARD & POOR'S 500 INDEX is a capitalization-weighted index of 500
stocks designed to measure the performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries.

o STANDARD & POOR'S MIDCAP 400/BARRA GROWTH INDEX is a
capitalization-weighted index of common stocks representing all major
industries in the mid-range of the U.S. stock market having the highest
price-to-book ratios.

o LIPPER MIDCAP GROWTH FUNDS INDEX Lipper indexes measure the performance
of the 30 largest mutual funds in each prospective fund category.

Advertisements and other sales literature for a Fund may quote total returns
which are calculated on non-standardized base periods. These total returns also
represent the historic change in the value of an investment in either class of
shares based on quarterly reinvestment of dividends over a specified period of
time. Advertisements for CLASS B SHARES may quote performance information which
does not reflect the effect of the contingent deferred sales charge.

Advertising and other promotional literature may include charts, graphs and
other illustrations using the Funds' returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Funds can
compare their performance, or performance for the types of securities in which
they invest, to a variety of other investments, such as bank savings accounts,
certificates of deposit, and Treasury bills.

ECONOMIC AND MARKET INFORMATION

Advertising and sales literature for a Fund may include discussions of economic,
financial and political developments and their effect on the securities market.
Such discussions may take the form of commentary on these developments by Fund
portfolio managers and their views and analysis on how such developments could
affect a Fund. In addition, advertising and sales literature may quote
statistics and give general information about mutual fund industry, including
the growth of the industry, from sources such as the Investment Company
Institute (ICI). For example, according to the ICI, thirty-seven percent of
American households are pursuing their financial goals through mutual funds.
These investors, as well as businesses and institutions, have entrusted over $5
trillion to the more than 7,300 mutual funds available.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended November 30, 1999, are
incorporated herein by reference from the Funds' Annual Report dated November
30, 1999 (File Nos. 33-44737 and 811-6511). A copy of the Annual Report for a
Fund may be obtained without charge by contacting Regions Funds at the address
located on the back cover of the SAI or by calling the Regions Funds at
1-800-433-2829.

APPENDIX

STANDARD AND POOR'S BOND RATINGS

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.

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

PLUS (+) OR MINUS (-):--The ratings from AA to BBB may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATINGS
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
edge. 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.

NR--Not rated by Moody's.
FITCH IBCA, INC. LONG-TERM DEBT RATINGS

AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated 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.

NR--NR indicates that Fitch does not rate the specific issue.

STANDARD AND POOR'S COMMERCIAL PAPER RATINGS

A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. The issues determined to possess
overwhelming safety characteristics are denoted with a plus (+) sign
designation. A-2--Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.

MOODY'S INVESTORS SERVICES, INC. COMMERCIAL PAPER RATINGS
P-1--Issuers rated PRIME-1 (for 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:
conservative capitalization structures 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.

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

FITCH IBCA, INC. SHORT-TERM RATINGS

F-1+--(Exceptionally Strong Credit Quality). Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--(Very Strong Credit Quality). Issues assigned to this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
F-2--(Good Credit Quality). Issues carrying this rating have a satisfactory
degree of assurance for timely payment but the margin of safety is not as great
as the F-1+ and F-1 categories.

ADDRESSES

REGIONS TREASURY MONEY MARKET FUND
REGIONS LIMITED MATURITY GOVERNMENT FUND
REGIONS FIXED INCOME FUND
REGIONS BALANCED FUND
REGIONS VALUE FUND
REGIONS GROWTH FUND
REGIONS AGGRESSIVE GROWTH FUND 5800 Corporate Drive
Pittsburgh, PA 15237-7010

Distributor

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

Adviser to all Funds

Regions Bank P.O. Box 10247
Capital Management Group Birmingham, AL 35202

Custodian

Regions Bank 417 North 20th Street
Birmingham, AL 35203

Transfer Agent, Dividend Disbursing Agent and Portfolio Accounting Services
Federated Shareholder Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779

Independent Auditors

Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, PA 15222-5401

APPENDIX

1. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of the Class A Shares of the Regions Treasury Money
Market Fund (Fund) as of the calendar year-end for each of seven years. The `y'
axis reflects the "% Total Return" beginning with "0.00%" and increasing in
increments of 1.00% up to 6.00%. The `x' axis represents calculation periods
from the earliest calendar yearend of the Fund's start of business through the
calendar year ended December 31,1999. The light gray shaded chart features seven
distinct vertical bars, each shaded in charcoal, and each visually representing
by height the total return percentages for the calendar year stated directly at
its base. The calculated total return percentage for the Fund which appear
directly above each respective bar, for the calendar years 1993 through 1999,
are 2.76%, 3.77%, 5.51%, 4.78%,4.81%, 4.64%, and 4.28%.

2. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of the Class B Shares of the Regions Limited Maturity
Government Fund (Fund) as of the calendar year-end for each of six years. The
`y' axis reflects the "% Total Return" beginning with "0.00%" and increasing in
increments of 2.00% up to 12.00%. The `x' axis represents calculation periods
from the earliest calendar year end of the Fund's start of business through the
calendar year ended December 31, 1999. 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 which appear
directly above each respective bar, for the calendar years 1994 through 1999,
are 0.30%, 10.83%, 3.29%, 5.55%, 5.86%, and 2.28%.

3. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of the Class B Shares of the Regions Fixed Income Fund
(Fund) as of the calendar year-end for each of seven years. The `y' axis
reflects the "% Total Return" beginning with "-5.00%" and increasing in
increments of 5.00% up to 20.00%. The `x' axis represents calculation periods
from the earliest calendar yearend of the Fund's start of business through the
calendar year ended December 31, 1999. The light gray shaded chart features
seven distinct vertical bars, each shaded in charcoal, and each visually
representing by height the total return percentages for the calendar year stated
directly at its base. The calculated total return percentage for the Fund which
appear directly above each respective bar, for the calendar years 1993 through
1999, are 8.40%, -4.74%, 15.99%, 3.58%, 7.96%, 6.79%, and -0.55%.

4. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of the Class B Shares of the Regions Balanced Fund
(Fund) as of the calendar year-end for each of five years. The `y' axis reflects
the "% Total Return" beginning with "0.00%" and increasing in increments of
5.00% up to 20.00%. The `x' axis represents calculation periods from the
earliest calendar yearend of the Fund's start of business through the calendar
year ended December 31, 1999. The light gray shaded chart features five 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 which appear directly above
each respective bar, for the calendar years 1995 through 1999, are 19.64%,
11.93%, 19.69%, 19.75%, and 8.56%.

5. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of the Class B Shares of the Regions Value Fund (Fund)
as of the calendar year-end for each of five years. The `y' axis reflects the "%
Total Return" beginning with "0.00%" and increasing in increments of 5.00% up to
30.00%. The `x' axis represents calculation periods from the earliest calendar
yearend of the Fund's start of business through the calendar year ended December
31,1999. The light gray shaded chart features five 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 which appear directly above each respective
bar, for the calendar years 1995 through 1999, are 25.04%, 18.69%, 27.24%,
12.79%, and 4.57%.

6. The graphic presentation displayed here consists of a bar char representing
the annual total returns of the Class B Shares of the Regions Growth Fund (Fund)
as of the calendar year-end for each of seven years. The `y' axis reflects the
"% Total Return" beginning with "0.00%" and increasing in increments of 10.00%
up to 50.00%. The `x' axis represents calculation periods from the earliest
calendar yearend of the Fund's start of business through the calendar year ended
December 31,1999. The light gray shaded chart features seven distinct vertical
bars, each shaded in charcoal, and each visually representing by height the
total return percentages for the calendar year stated directly at its base. The
calculated total return percentage for the Fund which appear directly above each
respective bar, for the calendar years 1993 through 1999, are 2.14%, 0.50%,
23.65%, 23.03%,27.22%, 41.50%, and 28.33%.

7. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of the Predecessor Collective Trust of the Regions
Aggressive Growth Fund (Fund) as of the calendar year-end for each of six years.
The `y' axis reflects the "% Total Return" beginning with "-10.00%" and
increasing in increments of 10.00% up to 50.00%. The `x' axis represents
calculation periods from the earliest calendar year end of the Fund's start of
business through the calendar year ended December 31, 1999. 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 which appear directly above each respective bar, for the
calendar years 1994 through 1999, are -7.38%, 19.75%, 21.92%, 34.87%, 20.71%,
and 41.59%.

PART C. OTHER INFORMATION.
-----------------
Item 23. Exhibits

(a) (i) Conformed copy of Declaration of Trust of the
Registrant, including conformed copy of Amendment No.
1;(7)

(ii) Conformed copy of Amendment No. 2 to Declaration of
Trust (4);
(iii) Conformed Copy of Amendment No. 3 through 5 to the
Declaration of Trust; (12)

(iv) Form of Amendment No. 6 to the Declaration of Trust;
(12)

(b) Copy of By-Laws of the Registrant (1);
(i) Copy of Amendment Nos. 1 through 4 to the By-Laws
of the Registrant; (13)
(c) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant (4);
(d) (i) Conformed copy of Investment Advisory
Contract of the Registrant, through and including
conformed copies of Exhibits A, B, C, and D;(7)

(ii) Conformed copy of Exhibits E and F to the Investment
Advisory Contract of the Registrant to add First
Priority Equity Income Fund and First Priority
Balanced Fund, respectively, to the Investment
Advisory Contract; (11)
(e) (i) Conformed copy of Distributor's Contract of the
Registrant, including conformed copies of Exhibits A,
B, and C;(7)
(ii) Conformed Copy of Exhibit D to the Distributor's
Contract to add First Priority Equity Income Fund and
First Priority Balanced Fund, respectively, to the
Distributor's Contract; (11)
(iii) Conformed copy of Exhibits E and F to the Distributor's Contract; (13)
(iv) Conformed copy of Exhibits G to the Distributor's Contract; (15)

(f) Not applicable;

+ All exhibits have been filed electronically.

(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed December 23, 1991 (File Nos. 33-44737 and
811-6511).

(4) Response is incorporated by reference to Post-Effective Amendment No. 5 on
Form N-1A filed January 24, 1994 (File Nos. 33-44737 and 811-6511).

(7) Response is incorporated by reference to Post-Effective Amendment No.7 on
Form N-1A filed October 7, 1994 (File Nos. 33-44737 and 811-6511).

(11) Response is incorporated by reference to Post-Effective Amendment No. 11 on
Form N-1A filed January 22, 1997 (File Nos. 33-44737 and 811-6511).

(12) Response is incorporated by reference to Post-Effective Amendment No. 12 on
Form N-1A filed January 20, 1998 (File Nos. 33-44737 and 811-6511).

(13) Response is incorporated by reference to Post-Effective Amendment No. 13 on
Form N-1A filed September 18, 1998 (File Nos. 33-44737 and 811-6511).

(15) Response is incorporated by reference to Post-Effective Amendment No. 16 on
Form N-1A filed January 29, 1999 (File Nos. 33-44737 and 811-6511).

(g) Conformed copy of Custodian Contract of the Registrant
between First Priority Funds and Regions Bank; (4)
(h) (i) Conformed copy of Fund Accounting and Shareholder
Recordkeeping Agreement (5);

(ii) Form of Shareholder Services Plan of the Registrant;
(7)

(iii) Conformed copy of Shareholder Services Agreement
with conformed copy of Exhibit A attached
thereto; (13)

(iv) Conformed copy of Administrative Services
Agreement;(10)
(a) Amendment No. 1 to Administrative Services
Agreement; (13)
(i) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered; (11)
(j) Conformed Copy of Independent Auditors Consent;(16)
(k) Not applicable;
(l) Conformed Copy of Initial Capital Understanding; (5)

(m) (i) Conformed copy of Distribution Plan of the
Registrant, through and including conformed copies of
Exhibits A and B;(7)

(ii) Conformed Copy of Exhibit C to the Distribution Plan of
the Registrant; (11)

(iii)Copy of Rule 12b-1 Agreement through and including
Exhibit A (1);

(iv) Copy of Amendment No. 1 to Exhibit A of the Rule 12b-1 Agreement; (12)

+ All exhibits have been filed electronically.

(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed December 23, 1991 (File Nos. 33-44737 and
811-6511).

(4) Response is incorporated by reference to Post-Effective Amendment No. 5 on
Form N-1A filed January 24, 1994 (File Nos. 33-44737 and 811-6511).

(5) Response is incorporated by reference to Post-Effective Amendment No. 6 on
Form N-1A filed June 29, 1994 (File Nos. 33-44737 and 811-6511).

(7) Response is incorporated by reference to Post-Effective Amendment No.7 on
Form
N-1A filed October 7, 1994 (File Nos. 33-44737 and 811-6511).

(9) Response is incorporated by reference to Post-Effective Amendment No. 9 on
Form N-1A filed June 29, 1995 (File Nos. 33-44737 and 811-6511).

(10) Response is incorporated by reference to Post-Effective Amendment No. 10 on
Form N-1A filed January 26, 1996 (File Nos. 33-44737 and 811-6511).

(11) Response is incorporated by reference to Post-Effective Amendment No. 10 on
Form N-1A filed January 22, 1997 (File Nos. 33-44737 and 811-6511).

(12) Response is incorporated by reference to Post-Effective Amendment No. 12 on
Form N-1A filed January 20, 1998 (File Nos. 33-44737 and 811-6511).

(13) Response is incorporated by reference to Post-Effective Amendment No. 13 on
Form N-1A filed September 18, 1998 (File Nos. 33-44737 and 811-6511).

(15) Response is incorporated by reference to Post-Effective Amendment No. 16 on
Form N-1A filed January 29, 1999 (File Nos. 33-44737 and 811-6511).

(16) Response is incorporated by reference to Post-Effective Amendment No. 18 on
Form N-1A filed January 26, 2000 (File Nos. 33-44737 and 811-6511).

(v) Copy of Amendment No. 1 to Exhibit A of the Rule 12b-1
Agreement; (15)
(vi) Conformed copy of Exhibit D to the Distribution Plan
of the Registrant; (15)
(n) (i) Conformed Copy of Multiple Class Plan; (9)
(ii) Conformed copy of Exhibits A & B to
Multiple Class Plan; (13)
(o) Copies of Financial Data Schedules; (not included per
footnote 60 of Release No. 33-7684)

(p) (i) Conformed copy of Power of Attorney; (16)
(ii) Conformed copies of Powers of Attorney for:
(a) John S. Walsh (16)
(b) John F. Cunningham (16)
(c) Charles F. Mansfield, Jr. (16)
(d) Nicholas P. Constantakis (16)
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
-------------------------------------------------------------
None

Item 25. INDEMNIFICATION: (1)
---------------

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

(a) The Adviser is a wholly-owned subsidiary of Regions
Financial Corp., a bank holding company organized during 1971
under the laws of the State of Delaware, and is a member of the
Regions Bank organization. Operating out of more than 700
offices, Regions provides wide range of banking and fiduciary
services to its customers. As of December 31, 1998, Regions
Financial Corp. was one of the 25 largest bank holding
companies in the United States with total assets of
approximately $35 billion. Regions Financial Corporation has
achieved Thomson BankWatch's highest rating of "A", a
distinction earned by less than 1% of U.S. financial
institutions. In addition, Veribanc, Inc. has designated
Regions' flagship bank, Regions Bank, as a Blue Ribbon Bank.
The Blue Ribbon rating symbol symbolizes excellence in asset
quality, capital strength, liquidity, and profitability, as
well as other key financial thresholds. No Blue Ribbon Bank has
ever failed. Regions Bank was selected for inclusion in the S&P
500 - Standard & Poor's widely followed index of the 500 most
prominent companies in the nation.

(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed December 23, 1991 (File Nos. 33-44737 and
811-6511).

(9) Response is incorporated by reference to Post-Effective Amendment No. 9 on
Form N-1A filed June 29, 1995 (File Nos. 33-44737 and 811-6511).

(13) Response is incorporated by reference to Post-Effective Amendment No. 13 on
Form N-1A filed September 18, 1998 (File Nos. 33-44737 and 811-6511).

(15) Response is incorporated by reference to Post-Effective Amendment No. 16 on
Form N-1A filed January 29, 1999 (File Nos. 33-44737 and 811-6511).

(16) Response is incorporated by reference to Post-Effective Amendment No. 18 on
Form N-1A filed January 26, 2000 (File Nos. 33-44737 and 811-6511).

As fiduciary, Regions Bank managed over $8 billion in
discretionary assets as of December 31, 1998. It manages ten
common trust funds and collective investment funds having a
market value in excess of $633 million as of December 31, 1998.
Regions Bank has been adviser to the Regions Funds (formerly,
First Priority Funds) since inception with a market value of
approximately $1.682 billion as of December 31, 1998.

Other Substantial

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

J. Stanley Mackin Chairman of the Board

Carl E. Jones, Jr. President and Chief
Executive Officer

Richard D. Horsley Vice Chairman of the
Board and Executive
Financial Officer

Sam P. Faucett President/Region Southwest

Joe M. Hinds President/Regions North

Wilbur B. Hufham President/Regions South

William E. Jordan President/Regions Central

Carl E. Jones, Jr. Chief Executive Officer

Peter D. Miller President/Regions Northeast

William E. Askew Executive Vice President/
Retail Banking

Samuel E. Upchurch, Jr. Executive Vice President/
General Counsel and Secretary

Robert P. Houston Executive Vice President
and Comptroller

E.C. Stone Executive Vice President/
Corporate Banking

Richard E. Wambsganss Executive Vice President/
Trust Group

Sheila S. Blair Director Civic Leader

James B. Boone, Jr. Director Chairman of the Board
Boone Newspapers, Inc.

Albert P. Brewer Director Professor of Law &
Government
Samford University

James S.M. French Director Chairman and President
Dunn Investment Company

Barnett Grace Director President/Regions West

Frank D. Hickingbotham Director Chairman of the Board TCBY
Enterprises, Inc.

Richard D. Horsley Director Vice Chairman of the Board
and Executive Financial
Officer Regions Financial
Corp.

Carl E. Jones, Jr. Director President & Chief
Executive Officer/ Regions Financial
Corporation

Olin B. King Director Chairman of the Board and
Chief Executive Officer
SCI Systems, Inc.

J. Stanley Mackin Director Chairman of the Board/
Regions Financial Corp.

Michael W. Murphy Director President/ Marmik Oil
Company

Henry E. Simpson Director Attorney
Lange, Simpson, Robinson &
Somerville

Robert E. Steiner, III Director Attorney
Steiner, Crum & Baker

Lee J. Styslinger, Jr. Director Chairman
ALTEC Industries, Inc.

Robert J. Williams Director Chairman and Chief
Executive Officer
Terminix Services, Inc.

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; and 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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kirk A. Montgomery Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Victor R. Siclari Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

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:

Regions Funds 5800 Corporate Drive
("Registrant") Pittsburgh, PA 15237-7010

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

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

Pittsburgh, PA 15222-3779

Regions Bank

Mutual Funds Group P.O. Box 10247
("Advisor and Custodian") Birmingham, Alabama 35202

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.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, REGIONS FUNDS, has duly caused
this Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, all in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the 26th day of June, 2000.

REGIONS FUNDS

(formerly, First Priority Funds)

BY: /s/ Gail Cagney
Gail Cagney, Assistant Secretary
Attorney in Fact for John F. Donahue

June 26, 2000

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/Gail Cagney

GAIL CAGNEY____ Attorney In Fact June 26, 2000
---------------
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* 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