IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore U.S.Treasury Money
Market Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 3 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................................. None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)...................... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
as applicable)............................................................................................ None
Redemption Fees (as a percentage of amount redeemed, if applicable)......................................... None
Exchange Fee................................................................................................ None
</TABLE>
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)............................................................................ 0.05%
12b-1 Fees (after waiver)(2)................................................................................ 0.30%
Other Expenses (after waiver & reimbursement)(3)............................................................ 0.32%
Total Investment Shares Operating Expenses (after waiver & reimbursement)(4)............................ 0.67%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.50%.
(2) The Fund can pay up to 0.40% of average daily net assets of Investment
Shares as a 12b-1 fee. For the foreseeable future, the Fund plans to incur
12b-1 payments of 0.30% of average daily net assets.
(3) Other Expenses are 0.41% absent the voluntary waiver by the administrator
and the voluntary reimbursement by the investment adviser. The administrator
and adviser may terminate the voluntary waiver and reimbursement,
respectively, at any time at their sole discretion.
(4) The Annual Investment Shares Operating Expenses were 0.65% for the fiscal
year ended November 30, 1993. The Annual Investment Shares Operating
Expenses in the table above reflect a reduction in the voluntary waivers of
the administrative fee and the custodian fee for the fiscal year ending
November 30, 1994. The Annual Investment Shares Operating Expenses are
expected to be 1.31% absent the voluntary waivers described above in notes
1, 2 and 3.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INVESTMENT SHARES OF THE
U.S. TREASURY FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE
COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "THE BILTMORE
FUNDS INFORMATION" AND "INVESTING IN INVESTMENT SHARES."
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. However, in order for a Fund investor to
exceed the NASD's maximum front-end sales charge of 6.25%, a continuous
investment in the Fund for 125 years would be required.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- -------------------------------------------------------------------------------------------------- ------ --------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period. The Fund charges no redemption fees for Investment
Shares............................................................................................ $7 $ 21
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Investment Shares of the U.S. Treasury Fund. The Fund also offers another class
of shares called Institutional Shares. Investment Shares and Institutional
Shares are subject to certain of the same expenses, however, Institutional
Shares are not subject to a 12b-1 fee. See "Other Classes of Shares."
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020308A-R (2/94)
IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore U.S. Treasury
Money Market Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 1 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................................. None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)....................................................................... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
as applicable)............................................................................................ None
Redemption Fees (as a percentage of amount redeemed, if applicable)......................................... None
Exchange Fee................................................................................................ None
</TABLE>
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)............................................................................ 0.05%
12b-1 Fees.................................................................................................. None
Other Expenses (after waiver & reimbursement)(2)............................................................ 0.32%
Total Institutional Shares Operating Expenses (after waiver & reimbursement)(3)......................... 0.37%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver by the
investment adviser. The investment adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.50%.
(2) Other Expenses are 0.41% absent the voluntary waiver by the administrator
and the voluntary reimbursement by the investment adviser. The administrator
and adviser may terminate the voluntary waiver and reimbursement,
respectively, at any time at their sole discretion.
(3) The Annual Institutional Shares Operating Expenses were 0.28% for the fiscal
year ended November 30, 1993. The Annual Institutional Shares Operating
Expenses in the table above reflect a reduction in voluntary waivers of the
administrative fee and custodian fee for the fiscal year ended November 30,
1994. The Annual Institutional Shares Operating Expenses are expected to be
0.91% absent the voluntary waivers and reimbursement described above in
notes 1 and 2.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SHARES OF THE
FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF
THE VARIOUS COSTS AND EXPENSES, SEE "THE BILTMORE FUNDS INFORMATION" AND
"INVESTING IN INSTITUTIONAL SHARES."
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period............................................... $4 $ 12 $ 21 $47
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Institutional Shares of the Fund. The Fund also offers another class of shares
called Investment Shares. Investment Shares are subject to certain of the same
expenses with the addition of a maximum 12b-1 fee of 0.40% of the Investment
Shares' average net assets. See "Other Classes of Shares."
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020308A-IS (2/94)
IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore Money Market Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 1 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................................................... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
as applicable)............................................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable)............................ None
Exchange Fee................................................................................... None
</TABLE>
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)............................................................... 0.11%
12b-1 Fees..................................................................................... None
Other Expenses (after waiver & reimbursement)(2)............................................... 0.14%
Total Institutional Shares Operating Expenses (after waiver & reimbursement)(3)............ 0.25%
</TABLE>
(1) The management fee was reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.50%.
(2) Other Expenses would have been 0.31% absent the voluntary waivers by the
administrator and custodian, and the reimbursement by the administrator. The
administrator and custodian may terminate the voluntary waivers at any time
at their sole discretion.
(3) The Annual Institutional Shares Operating Expenses would have been 0.81%
absent the voluntary waivers and reimbursement described above in notes 1
and 2.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SHARES OF THE
FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF
THE VARIOUS COSTS AND EXPENSES, SEE "THE BILTMORE FUNDS INFORMATION" AND
"INVESTING IN INSTITUTIONAL SHARES."
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period. The Fund charges no redemption fees for
Institutional Shares............................................. $3 $8 $ 14 $32
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Institutional Shares of the Fund. The Fund also offers another class of shares
called Investment Shares. Investment Shares are subject to certain of the same
expenses with the addition of a maximum 12b-1 fee of 0.40% of the Investment
Shares' average net assets. See "Other Classes of Shares."
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020307A-IS (2/94)
IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore Money Market Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 1 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).......................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)............... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
as applicable)..................................................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable).................................. None
Exchange Fee......................................................................................... None
</TABLE>
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)..................................................................... 0.11%
12b-1 Fees (after waiver)(2)......................................................................... 0.30%
Other Expenses (after waiver & reimbursement)(3)..................................................... 0.14%
Total Investment Shares Operating Expenses (after waiver & reimbursement)(4)..................... 0.55%
</TABLE>
(1) The management fee was reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.50%.
(2) The Fund can pay up to 0.40% of average daily net assets of Investment
Shares as a 12b-1 fee. For the foreseeable future, the Fund plans to incur
12b-1 payments of 0.30% of average daily net assets.
(3) Other Expenses would have been 0.31% absent the voluntary waivers by the
administrator and custodian, and the reimbursement by the administrator. The
administrator and custodian may terminate the voluntary waivers at any time
at their sole discretion.
(4) The Annual Investment Shares Operating Expenses would have been 1.21% absent
the voluntary waivers and reimbursement described above in notes 1, 2 and 3.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INVESTMENT SHARES OF THE MONEY
MARKET FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "THE BILTMORE FUNDS
INFORMATION" AND "INVESTING IN INVESTMENT SHARES."
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. However, in order for a Fund investor to
exceed the NASD's maximum front-end sales charge of 6.25%, a continuous
investment in the Fund for 125 years would be required.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time
period. The Fund charges no redemption fees for Investment Shares... $6 $ 18 $ 31 $69
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Investment Shares of the Money Market Fund. The Fund also offers another class
of shares called Institutional Shares. Investment Shares and Institutional
Shares are subject to certain of the same expenses, however, Institutional
Shares are not subject to a 12b-1 fee. See "Other Classes of Shares."
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020307A-R (2/94)
IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore Tax-Free Money
Market Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 1 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................................................... None
Deferred Sales Load (as a percentage of original purchase price or redemption
proceeds, as applicable)..................................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable)............................ None
Exchange Fee................................................................................... None
</TABLE>
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)............................................................... 0.11%
12b-1 Fees..................................................................................... None
Other Expenses (after waiver & reimbursement)(2)............................................... 0.18%
Total Institutional Shares Operating Expenses (after waiver & reimbursement)(3)............ 0.29%
</TABLE>
(1) The management fee was reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.50%.
(2) Other Expenses would have been 0.39% absent the voluntary waivers by the
administrator and custodian, and the reimbursement by the administrator. The
administrator and custodian may terminate the voluntary waivers at any time
at their sole discretion.
(3) The Annual Institutional Shares Operating Expenses would have been 0.89%
absent the voluntary waivers and reimbursement described above in notes 1
and 2.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE INSTITUTIONAL SHARES WILL
BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "THE BILTMORE FUNDS INFORMATION" AND "INVESTING
IN INSTITUTIONAL SHARES."
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period. The Fund charges no redemption fees for
institutional shares............................................. $3 $9 $ 16 $37
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Institutional Shares of the Fund. The Fund also offers another class of shares
called Investment Shares. Investment Shares are subject to certain of the same
expenses with the addition of a maximum 12b-1 fee of 0.40% of the Investment
Shares' average net assets. See "Other Classes of Shares."
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020309A-IS (2/94)
IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore Tax-Free Money
Market Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 2 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INVESTMENT SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).......................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)............... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
as applicable)..................................................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable).................................. None
Exchange Fee......................................................................................... None
</TABLE>
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)..................................................................... 0.11%
12b-1 Fees (after waiver)(2)......................................................................... 0.30%
Other Expenses (after waiver & reimbursement)(3)..................................................... 0.18%
Total Investment Shares Operating Expenses (after waiver & reimbursement)(4)..................... 0.59%
</TABLE>
(1) The management fee was reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.50%.
(2) The Fund can pay up to 0.40% of average daily net assets of Investment
Shares as a 12b-1 fee. For the foreseeable future, the Fund plans to incur
12b-1 payments of 0.30% of average daily net assets.
(3) Other Expenses would have been 0.39% absent the voluntary waivers by the
administrator and custodian, and the reimbursement by the administrator. The
administrator and custodian may terminate the voluntary waivers at any time
at their sole discretion.
(4) The Annual Investment Shares Operating Expenses would have been 1.29% absent
the voluntary waivers and reimbursement described above in notes 1, 2 and 3.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE INVESTMENT SHARES OF THE
TAX-FREE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "THE BILTMORE FUNDS
INFORMATION" AND "INVESTING IN INVESTMENT SHARES."
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. However, in order for a Fund investor to
exceed the NASD's maximum front-end sales charge of 6.25%, a continuous
investment in the Fund for 125 years would be required.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time
period. The Fund charges no redemption fees for Investment Shares... $6 $ 19 $ 33 $74
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Investment Shares of the Tax-Free Fund. The Fund also offers another class of
shares called Institutional Shares. Investment Shares and Institutional Shares
are subject to certain of the same expenses, however, Institutional Shares are
not subject to a 12b-1 fee. See "Other Classes of Shares."
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020309A-R (2/94)
IMPORTANT NOTICE
Dear Shareholder:
The following is a supplement to your prospectus for Biltmore Special Values
Fund.
We suggest that you keep this supplement for your records.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- --
RETAIN THIS PORTION AND ATTACH TO YOUR CURRENT PROSPECTUS
BILTMORE SPECIAL VALUES FUND
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1994
1. Please replace the Summary of Fund Expenses on page 1 in your prospectus with
the following:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................. 4.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)...... None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds, as
applicable)............................................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable)......................... None
Exchange Fee................................................................................ None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)............................................................ 0.40%
12b-1 Fees.................................................................................. None
Other Expenses (after waiver) (2)........................................................... 0.94%
Shareholder Servicing Agent Fee (3)............................................... 0.00%
Total Fund Operating Expenses (after waiver) (4)................................... 1.34%
</TABLE>
(1) The management fee was reduced to reflect the voluntary waiver by the
investment adviser. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.80%.
(2) Other expenses are 1.54% absent the voluntary waiver by the administrator.
The administrator may terminate this voluntary waiver at any time at its
sole discretion.
(3) As of the date of this prospectus, the Fund is not paying or accruing
shareholder servicing agent fees. The Fund will not pay or accrue
shareholder servicing agent fees until a separate class of shares has been
created for certain trust and institutional investors, including qualified
employee benefit plans. At that point, the Fund will be able to pay up to
0.25 of 1% of the Fund's average daily net assets for shareholder servicing
agent fees. See "The Biltmore Funds Information".
(4) The Annual Fund Operating Expenses were 1.25% for the fiscal year ended
November 30, 1993. The Annual Fund Operating Expenses in the table above are
based on expenses expected during the fiscal year ending November 30, 1994.
The Annual Fund Operating Expenses are expected to be 2.34% absent the
voluntary waivers described above in notes 1 and 2.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "THE BILTMORE FUNDS INFORMATION" AND "INVESTING IN THE FUND."
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- --------------------------------------------------------------------------------- ------ --------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. As noted in
the table above, the Fund charges no redemption fees............................. $ 58 $ 86
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
February 10, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------------------------------------------------
Distributor
4020306A (2/94)
